Long-Range Capital Financial Plan Report
The Office of the Chief Financial Officer has released its 2018 Long-Range Capital Financial Plan Report. The study looks at current assets, their condition, future capital needs, and funding availability, to develop a long-range plan to address all identified capital needs of the District in the shortest possible time period.
The District’s asset management system, also known as the Capital Asset Replacement Scheduling System (or CARSS), contains a detailed inventory of all District-owned assets, including all land, buildings, roads and streets, vehicles and equipment. The system contains full condition assessments on all city-owned vehicles, and similar condition assessments are being performed on all other District assets, which are expected to be completed within the next 12 to 18 months. This system forms the basis to develop the District’s capital improvement plan as part of the budget process and to determine the cost of deferred maintenance for current assets.
It has generally been recognized that the District has the most complete capital asset management system of any city or state in the country! This system has been noted by the bond-rating agencies as a key factor in the recent upgrade of the District’s bond ratings, including the Aaa rating from Moody’s.
- The District has addressed its share of additional capital funds needed for WMATA (approx. $2.3 billion), through legislation passed in 2018 that dedicated a portion of its sales tax base to Metro for its critical capital needs.
- This new dedicated funding, along with continuing existing capital funding (growing at 3 percent annually), should allow WMATA to achieve a state of good repair on all its critical infrastructure within a decade.
- $5.7 billion of unfunded capital needs ($4.2 billion of District needs, plus $1.5 billion of potential public-private partnerships) reduced to $3.3 billion overall. Approximately $1.2 billion of this amount is deferred maintenance, which is also fully addressed.
- Significantly increased capital budget, especially for roads and streets, allows all the District’s capital needs to be addressed by FY 2028.
- Significant borrowing capacity will start to become available by FY 2028, as bonds are paid off and the District continues to grow, that can be used to fund new capital projects needed to support continued growth in the city.
- The lower cost of borrowing afforded the District by its recent bond ratings upgrades to Aaa/AA+/AA+ (Moody’s, S&P and Fitch, respectively) allows for greater amount of borrowing to address capital needs.
- 100 percent of District assets are inventoried in CARSS, and condition assessments on all assets are projected to be completed in 12 to 18 months. Arguably, CARSS is the most comprehensive and detailed capital asset management system of any city or state government in the nation.
- Public-Private Partnerships (P3) projects that might be jointly funded with the private sector as identified by the Mayor’s P3 office total $1 billion to $1.5 billion.
- The District is in the best position of any state or local government in the country to address its infrastructure needs due its strong financial position, strong growth in the economy, strong bond ratings, and fully-funded pensions and OPEB trusts
For more information, view the 2018 Long-Range Capital Financial Plan Report.
The full report can also be found at www.DCbonds.com.