Understanding the details in the Capital Spending Plan

The Mayor’s Office announced on October 22, 2021, that it is proposing a $568 million capital spending plan for the current fiscal year. You can read their press release here.

The Mayor’s Office submitted the formal legislation to the Metro Council Office on October 22. You can see that here. It will be filed with the Metro Clerk on October 26 and then publicly available the next day when the Council agenda is released for our November 2 meeting.

Some background

Metro has a Capital Improvements Budget, or CIB, and a Capital Spending Plan, or CSP. The Council is required to pass a new CIB every year before we pass the operating budget. We do that in May or June every year. The CIB has been called a “wish list.” For any capital project requiring general obligation bond money, a project has to be in an approved CIB before it is eligible to be considered for actual spending. The CIB passed earlier this year is here.

Capital spending plans (like the legislation coming up on November 2) happen generally once a year, sometimes more often, sometimes less often. The CSP formally approves capital spending and allows spending to start immediately on any projects listed in the plan.

Over the last four mayors, the Council has forced greater transparency on what spending is being approved. During the Dean administration, a side letter sent to the Council described new spending in detail, but the actual legislation just included a several hundred million dollar lump sum of spending approval. This allowed the administration a great deal of flexibility about how to match new capital spending with the hundreds of pages of projects listed in the CIB. Through the Barry and Briley administrations, the Council made new rules requiring the CSP to specifically identify each project in the CIB that was being approved for spending. The idea was for the Council and the public to know more precisely what projects were going forward and in what amounts.

What projects are being approved now?

The press release from the administration has a lot of good details about the proposed capital spending plan.

To get more details, I like to toggle between Exhibit A to the legislation and the latest CIB. Because of the Council rules enacted in recent years, most of the spending line items in Exhibit A tie precisely to specific project numbers in the CIB. If you do this, for the most part, you’ll not really learn anything new — you’ll just see where individual projects listed in the press release are in the legislation. This might seem boring, but it is incredibly valuable for the sake of transparency in capital spending that we can tie each line item of spending in the CSP legislation to a specific project in the CIB. This tells us where money will be spent and legislates that the money must be spent there instead of being quietly slid into another project later.

Most of the new information in the legislation to be found where a line item in Exhibit A refers to two or more CIB project numbers. I’ll run through two examples.

In the new CSP legislation, the Exhibit A lists “Wharf Park - Design” for $3 million. Exhibit A refers to two CIB project numbers — 19PR0053 and 19PR0004. If you check out the CIB, you’ll see that 19PR0053 is for “Wharf Park — Phase One Design” for $1.7 million. And then 19PR0004 is for “General Park + Amenity Improvements in new and existing parks” for $239 million. This second CIB project number is a big catchall category that lists some 30 sub-projects (and does not include Wharf Park…).

The apparent takeaway is that Wharf Park design is in the approved CIB for $1.7 million, but now the administration wants to spend $3 million for that project. Since that’s not allowed, they have referenced a second CIB project number, a catchall category that does not include Wharf Park as a sub-project, to make up the difference. (After having thought about this for only a few days, I don’t know whether the additional spending is appropriate…I’m just showing how there’s more details to be had by cross-checking the legislation’s Exhibit A with the referenced CIB project numbers.)

As a second example, let’s look at the large $45 million line item in Exhibit A for “Restoration & Resiliency, Partnership Funding.“ Between the fuzzy non-descript name, it being a big number, and it listing four different CIB project numbers in Exhibit A to the legislation, this one drew my attention right away. The four CIB project numbers listed in support of this $45 million are for:

• Restoration & Resiliency, State Routes, Partnership Funding and Innovation/Sustainability Corridors (22PW0004). In the detail, this item in the CIB is explained this way: “Restoration & Resiliency for areas hit by unforeseen events. State Routes & Partnership Funding for partnerships with TDOT/federal/state/public private entities. Innovation & Sustainability Corridors are living labs for technology/sustainability pilots.“

• Safety/Vision Zero/Traffic Calming (22PW0005). It is described as: “Safety/Vision Zero/Traffic Calming programs would serve to address the existing backlog of traffic calming requests maintained by MPW as well as to address operation safety improvements in the highest accident locations.”

• Traffic Management Systems/Signal Upgrades (22PW0007). It is described as: “Traffic Management Systems/Signal Upgrades funding will implement the recommendations of the system evaluation currently underway. Significant reductions in travel time as well as safety improvements are anticipated.”

• Jefferson Street Multimodal Cap/Connector (22PW0003). This is listed in the current CIB as a $189 million project.

If the legislation is passed as drafted, the administration arguably would have the flexibility to spend all $45 million of this line item on any of these four CIB projects. Presumably, the administration intends to divide the money among these four CIB projects in some way. Whatever allocation they have in mind is not disclosed in this capital spending plan legislation. As the legislation moves forward, I’ll want to have these broken into separate line items and make sure there is consensus about all parts of this spending. I think we’ll all want to pay close attention to whether the Jefferson Street cap should be in this capital spending plan. My sense is that there is not community consensus about whether this is a good idea.

What’s next?

The Council also added a rule a few years ago to force at least a one meeting delay in approving a capital spending plan. That ensures some time to work through questions. The Budget & Finance Committee will be able to ask questions at its November 1 meeting and the capital spending plan won’t be considered for final approval until at least November 16. The Council will have a few weeks to dig into the details in the proposed plan.