The Bottom Line - Spring 2018 - 11

vehicles. The remainder of the funding gap
represents new capital projects that are
needed to support the District's continued
growth, such as the new D.C. United soccer
stadium and the Walter Reed redevelopment
projects. In addition, the $4.2 billion funding
gap does not include the approximately $1
billion to $1.5 billion in projects that may be
addressed through public-private partnerships (P3s), as well as the District's share of
estimated future capital funding needs for
Metro of approximately $2.3 billion over the
next decade. In fact, the OCFO developed a
similar modeling tool to help Metro evaluate
its long-term capital funding needs. This led
to the regional consensus that the system
needs $15.5 billion in additional funding to
reach a state of good repair within a decade
by establishing a dedicated funding source
of $500 million annually to pay for the borrowing that Metro must do to accomplish
this goal.
After the first long-range capital financial
plan report was released in October 2016,
the Council adopted new paygo legislation
as part of the FY 2018 budget act that will
significantly increase the amount of paygo
funding for capital over the next several
years. In fact, paygo funding will gradually
increase, starting in FY 2020, every year
until it equals the amount of annual depreciation, which is a good gauge of the amount
of reinvestment needed to maintain current
assets. The increased paygo levels, coupled with additional debt capacity as existing debt is retired, and a growing economy,
would enable the District to fund all identified and unmet capital needs by FY 2028.

If the current legislation and funding plan
is adhered to, the District should be able
to have the best funded and maintained
capital infrastructure of any city or state
in the country. Additionally, the legislatures
from Virginia, Maryland and the District
have recently come to a consensus on the
amounts each jurisdiction will contribute to
the total additional $500 million for Metro.
These additional funds should allow Metro
to fund critical deferred capital repairs,
which will help to return this vital economic
engine for the District and the region to a
state of good repair.
The District's use of CARSS and the
development of a long-range capital plan,
puts us in a position to properly invest in
infrastructure and enables us to better
meet the needs of our growing city in providing quality services for our residents
and visitors.
After this article was written Standard and
Poor's issued a report highly complementary of
the CARSS project and The Bond Buyer wrote,
"The District of Columbia is taking positive steps to determine the funding needed
for maintenance of its critical infrastructure," S&P Global Ratings said. "The rating
agency recommended in a report released
this month that other state and local governments follow the District of Columbia's approach to inventory, assess, prioritize and develop plans to fund deferred
maintenance."

Read the Full Article

SPRING 2018 | 11
http://cfo.dc.gov
Table of Contents for the Digital Edition of The Bottom Line - Spring 2018
