Fiscal Year 2004 Proposed Budget

PAY-AS-YOU-GO CAPITAL
GENERAL CAPITAL PROJECTS FUND

Program Description: The Pay-As-You-Go (PAYG) Budget provides funding for capital improvements using current year tax revenue, fund balance, state and federal grants, developer fees, and inter-jurisdictional revenue. Annual PAYG appropriations and voter approved bond financing fund the capital projects included in the Biennial Six-Year Capital Improvement Program (CIP). Detailed information concerning the County's bond financing is contained in the Debt Service section of the FY 2004 Proposed Budget.

Capital maintenance activities differ from operating maintenance activities in cost, size, nature, and frequency of occurrence of the maintenance activity. The Capital program includes the following types of governmental activities and program categories:

• Implementation of capital project activities such as engineering studies, land acquisition, construction, asset preservation, and acquisition of equipment (rolling stock is excluded) with a 10 year life and cost of more than $25,000.

• Capital maintenance activities that are major upgrades, expansions, and renovations that significantly alter or extend the useful life of the assets.

The County's General PAYG categories, funded by current-year tax revenue, capital reserve funds, fund balance and state and federal grants, include Local Parks and Recreation, Transportation and Pedestrian Initiatives, Storm Drainage, Government Facilities, Information Technology Investments, Community Conservation, and Regional Partnerships.

The Proposed FY 2004 Utilities PAYG Budget is funded by utility operating revenue (shown as a transfer from the Utilities Fund), charges to neighboring jurisdictions for sewage treatment, developer "Hook-Up" fees, and state grants.

Overview of FY 2004: The County Government's FY 2004 Proposed General PAYG budget of $9.0 million is funded out of prior year fund balance. This represents a $4.6 million decrease when compared to the FY 2003 approved funding level of $13.6 million. The Proposed PAYG budget includes funding for continuing commitments for Information Technology Investments ($1.8 million), Neighborhood Conservation ($0.5 million), Neighborhood Traffic Calming ($0.5), Public Safety Facilities ($1.4), Government Facilities ($0.6 million), Local Parks and Recreation ($0.15 million), Transportation and Pedestrian Initiatives ($3.1 million), and Regional Contributions ($1.0 million).

The Utilities Fund FY 2004 Proposed PAYG budget of $12.6 million includes funding for plant capital maintenance and improvements to the Washington Aqueduct, which supplies the County with 100% of its drinking water.

The School Board's Proposed FY 2004 PAYG Budget is funded at $6.1 million. Details of School capital projects are included in School budget documents and on their website.

Fiscal impact is the net increase in annual operating costs associated with a capital funding decision. Capital funding decisions that expand or significantly change the nature and quality of an asset typically increase future operating budgets over the life of the asset. However, some capital funding decisions that replace current assets with efficient, low maintenance assets or extend the useful life of an asset can reduce future operating budgets.

Fiscal impact is included as a factor to be considered when prioritizing proposed capital projects for funding and implementation. When prioritizing funding decisions, the direct fiscal impact of a project is also considered in light of community benefits and other intangible impacts, such as safety and quality of life.

In order to demonstrate the fiscal impact of FY 2004 Proposed PAYG projects, the following categories have been developed:

• Fiscal Impact 1 - Capital maintenance, replacement or upgrade – no increase to FY 2004 operating costs.

• Fiscal Impact 2 - Specific projects and their operating costs will be determined after program funding is allocated, and project information will be presented to the County Board for approval/review prior to implementation – no increase to FY 2004 operating costs.

• Fiscal Impact 3 - FY 2004 PAYG funds will be used to plan for future implementation of this project. This planning will include a projection of operating costs and will be presented with requests for future implementation funds.

• Fiscal Impact 4 - The Regional Partnerships program represents the County's annual contributions to support the capital efforts of regional programs. Because these are outside agencies, there are no direct County operating costs.

• Fiscal Impact 5 – Other.

County capital project descriptions, PAYG appropriation charts, and fund statements are included on the following pages. Appropriations rather than actual expenditures are presented because appropriations indicate more about County Board priorities, decisions, and PAYG funding levels than actual expenditures.

Proposed PAYG Budget

I. LOCAL PARKS AND RECREATION

Small Parks Improvements Program $65,000

This funding enables Arlington residents to continue the initiation of small capital improvements and beautification projects for parks, playgrounds, and recreation facilities in their respective neighborhoods. This program encourages the community to support improvements in local public parks. Projects are annually reviewed and selected by the Arlington County Park and Recreation Commission from a pool of citizen requests. The Commission's recommendations are submitted to the County Board for final approval.

• Fiscal Impact 2 - Specific projects and their operating costs will be determined after program funding is allocated, and project information will be presented to the County Board for approval/review prior to implementation – no increase to FY 2004 operating costs.

Theater Equipment Replacement $87,000

The County has a significant investment in theater equipment for its five theaters. This equipment, lighting controls, and sound and stage rigging has a finite life. This project would establish a 10 year cyclic replacement for this equipment. The proposed FY 2004 projects include theater equipment replacements at these theaters:

• Thomas Jefferson Middle School, replacement of the stage rigging, sound system, light fixtures ($60,000);

• Gunston Middle School, theater one, replacement of the sound system and stage lighting ($15,000);

• Theater on the Run at 3700 S. Four Mile Run Dr., replacement of the stage lighting ($12,000).

• Fiscal Impact 1- Capital maintenance, replacement or upgrade program – no increase to FY 2004 operating costs.

II. TRANSPORTATION AND PEDESTRIAN INITIATIVES

Street Paving $2,400,000

This program provides for the regular resurfacing of streets throughout the County. There are three elements of the paving program: re-paving, slurry seal, and reconstruction. All three elements of the paving program are proposed for funding in this one program. This request is 80% of full program costs. This one-time reduction should have no long term effects on the program. Annually streets are assessed to determine which of the three elements is most appropriate to bring the pavement up to County standard. The program goal is to maintain a pavement condition index (PCI) in the low to mid 70s. The current PCI is 71.

• Fiscal Impact 1 - Capital maintenance, replacement or upgrade program – no increase to FY 2004 operating costs.

Traffic Signals $650,000

This funding would accelerate the installation of approximately five new traffic signals at various locations throughout the County. Several intersections are currently being evaluated and prioritized and will be considered for the proposed FY 2004 funds. The proposed projects will enhance traffic safety, complement Pedestrian/ Transit Initiatives and create a more pedestrian friendly community.

• Fiscal Impact 5 - Other. The average annual electric cost of $4,500 ($900 X 5 signals) and routine maintenance costs will be added to the Department of Public Works FY 2005 operating budget.

III. COMMUNITY CONSERVATION

Neighborhood Conservation Program $500,000

The Neighborhood Conservation (NC) Program funds public improvements in neighborhoods throughout the County for which the County Board has accepted Neighborhood Conservation Plans adopted by civic associations. Projects include installation of curb, gutter, sidewalk, street lights, neighborhood identification signs, fencing, retaining walls, street trees and other landscaping; correction of drainage problems; park and County facilities improvements; and reconfiguration of streets (including nubs, traffic circles, etc.) to address traffic management problems. Typically the County funds the NC program through bonds considered by voters every two years. This funding would supplement the $9.0 million approved in the FY 2003 bond for the NC Program.

The NC Program is a resident initiated, comprehensive, and multi-year neighborhood planning process. With planning assistance from County staff, neighborhood groups develop comprehensive neighborhood plans that address the physical and social facilities and infrastructure in a neighborhood. NC Plans identify issues and recommend County action and projects to respond to these issues. Following extensive coordination and review with County staff, the NC Plans are accepted by the County Board as policy guides. Neighborhood residents then work with County staff to implement specific capital projects identified in NC Plans. Neighborhoods submit projects for funding two times each year. The Neighborhood Conservation Advisory Committee reviews the projects, and recommends to the County Board a list of priority projects for funding.

• Fiscal Impact 2 - Specific projects and their operating costs will be determined after program funding is allocated, and project information will be presented to the County Board for approval/review prior to implementation – no increase to FY 2004 operating costs.

Neighborhood Traffic Calming $500,000

The purpose of the Neighborhood Traffic Calming (NTC) Program is to enhance transitions from commercial areas to residential neighborhoods by lessening the impact on those neighborhoods by addressing concerns of high speed and traffic volume. The County's adopted Master Transportation Plan identifies neighborhood streets and generally indicates which measures are available to influence the speed and volume of traffic using the street. In FY 2000, the Board adopted the NTC process, criteria, and measures. The NTC program provides specific procedures and criteria for the implementation of traffic calming measures on neighborhood streets. Project selection is determined by a formal process conducted jointly with a committee of residents and County staff to direct resources to streets where travel speeds and traffic volumes meet adopted criteria. This funding would supplement the $2.0 million approved in the FY 2003 bond for the NTC Program.

• Fiscal Impact 2 - Specific projects and their operating costs will be determined after program funding is allocated, and project information will be presented to the County Board for approval/review prior to implementation – no increase to FY 2004 operating costs.

IV. PUBLIC SAFETY FACILITIES

Emergency Communications Center/ Emergency Operation Center $1,380,000

This proposed funding is for the Phase I construction of the new Emergency Communications Center (ECC) and Emergency Operations Center (EOC), the development of equipment specifications for the EOC, and oversight of the ECC equipment manufacturing and testing. The need to relocate these functions to the 7^th floor of the Courts/Police building and upgrade the communications infrastructure was originally foreseen when the Judicial Center was designed in the early 1990s. The importance of a secure, dedicated ECC/EOC and an enhanced communications system was confirmed in the Federal Emergency Management Agency-sponsored "After Action Report" on Arlington's response to the September 11^th attack on the Pentagon. It is anticipated that a midyear appropriation of fund balance ($1.4 million) will be used to design the space and to fund consultant services for equipment compliance testing and system acceptance.

The County's emergency communications system currently serves several agencies including: the Emergency Communication Center (ECC); the Police Department; the Fire Department; the Sheriff's Office; the Department of Environmental Services; the Department of Community Planning, Housing and Development; the Department of Public Works; the Department of Parks, Recreation and Community Resources; and the Office of Support Services. The replacement system is proposed to serve Arlington Public Schools as well. The current system is in need of a major upgrade and replacement from an analog system to a dual mode (digital/analog) system. This upgrade will provide for increased reliability, system integrity, support for needed technological advances (including secure communications and improved data transmission), and maintenance of interoperability with adjoining county and city radio systems. More critically, several major components of the current system are no longer manufactured. Significant federal funding (approximately $6.0 million) for the communications equipment system has been approved, as it is an integral component of protecting critical federal assets located in Arlington. The preliminary estimate for the ECC, EOC and emergency communication system (including design, build-out, relocation, equipment acquisition and installation) is projected in the range of $20 to $25 million over the next three to five years, to be offset by significant federal funding, as well as County contributions.

• Fiscal Impact 3 - FY 2004 PAYG funds will be used to plan for future implementation of this project. This planning will include a projection of operating costs and will be presented with requests for future implementation funds. Annual increase in custodial, utilities, building maintenance cost for the first year (FY 2005) of operation is estimated to be $50,000. Annual communication equipment operating cost estimates will be available in October of 2003 and included in the proposed FY 2005 operating budget.

V. GOVERNMENT FACILITIES

Facility Maintenance (Capital Assets Preservation Program) $500,000

The purpose of the Capital Assets Preservation Program (CAPP) is to ensure that existing capital assets are maintained in reliable, serviceable condition and periodically updated and renewed as necessary.

This new program was first introduced in the FY 2003 PAYG budget. It consolidates several previously listed maintenance programs: Roof Replacement; HVAC/Energy; Environmental Hazards; Parking Lot Paving and Disability Access.

This program reflects ongoing capital investments required to maintain and prolong the life of County facilities and structures. The County has capital maintenance responsibility for over 90 facilities, with some in service for as many as 40 years and in need of substantial capital maintenance. While normal maintenance funding is provided for in the operating budget, certain building systems and structures require major renovations or replacement. In order to create an effective CAPP fund, a comprehensive facility maintenance inventory will be developed which will include an equipment replacement and facility renovation schedule. The schedule will be based on updated condition surveys, best management practices, and recommended overhaul/replacement cycles. When implemented, asset management plans and an asset management system containing criteria, operational history/performance, and anticipated renovation/replacement schedules will support the CAPP funding requests.

• Fiscal Impact 1 - Capital maintenance, replacement or upgrade program – no increase to FY 2004 operating costs.

Office Reconfiguration $80,000

Office space renovations are proposed for the General District Court Clerk's office to improve customer service and are based on a work flow analysis performed by the state. This proposed project would provide funding to reconfigure the Clerk's office space on the second floor of the Courts/Police facility.

• Fiscal Impact 1 - Capital maintenance, replacement or upgrade program – no increase to FY 2004 operating costs.

VI. INFORMATION TECHNOLOGY INVESTMENTS

Technology Projects $1,815,000

These projects continue the investment in technologies that provide the foundation to advance e-government and other strategic initiatives. The proposed projects would enhance network reliability, replace equipment, upgrade critical County systems, and expand the County's Internet capability. Specifically, projects for FY 2004 include the following:

• Enterprise Record Management.  The County is burdened with enormous numbers of paper records that pose a storage and retrieval challenge, and are at risk of loss due to aging, damage, and mis-filing. This initiative will establish a technology platform for the categorization, electronic scanning, and indexing of these records in accordance with the standards established by the Library of Virginia.  This platform will provide the foundation for records management for a select number of County programs and serve as the framework for the eventual creation of a County-wide system. ($500,000)

• Fiscal Impact 3 - FY 2004 PAYG funds will be used to plan for future implementation of this project. This planning will include a projection of operating costs and will be presented with requests for future implementation funds.

• Migration to Outlook Phase I.  The County intends to migrate from the current GroupWise Electronic Mail system to the more commonly used Microsoft Exchange/Outlook platform, and these funds will be used to begin the migration process.  Licenses for the backend Microsoft Exchange Servers and the Microsoft Active Directory, as well the client (PC) licenses for Microsoft Outlook must first be acquired.  This initiative will necessitate the migration from Novell's LDAP (local directory access protocol) to Microsoft's Active Directory.  The project will also entail the migration of the mail messages and the training of County users. ($300,000)

• Fiscal Impact 5 - Other. No increase in FY 2004 or FY 2005 operating cost is anticipated at this time.

• Personal Computer (PC) Replacement Program. This program maintains a four-year replacement cycle of the County's workstations. In FY 2003, based on a minimum CPU standard of 400 MHz, over 900 PCs were replaced. The process includes: 1) identification of PCs to be replaced; 2) tight coordination with recipient Departments; 3) deployment, testing, and installation of the new workstations and desktop software. ($600,000)

• Fiscal Impact 1 - Capital maintenance, replacement or upgrade program – no increase to FY 2004 operating costs.

• File Server Replacement. This project is similar to the PC Replacement project but focuses on the network file servers which are housed in the data center and monitored by the Network Operations Center (NOC). Currently, over 40 file servers are managed in the data center by DTS. The goal for this initiative is to replace 10 of these file servers, which are currently out of warranty. ($90,000)

• Fiscal Impact 1 - Capital maintenance, replacement or upgrade program – no increase to FY 2004 operating costs.

• Web Content Management - Phase II. This project completes the roll-out of a Web Content Management tool that will ensure that the items presented on the County's website are timely, current, accurate, and easily managed. This tool would automate the review, approval, posting, and retirement of information available on the website. In addition, i t would establish standards and templates for the purpose of web-based publication and reduce reliance on technical resources . This project represents the second and final phase of the design of the internet site begun in FY 2 002. By the end of FY 2004, the web content management project will be implemented and the County's web publication processes will be managed by the system. ($125,000)

• Fiscal Impact 5 - Other. Annual software licenses and maintenance costs are estimated to be $75,000 in FY 2005.

• Library Management System Requirements Study. Arlington County Online Resource Network (ACORN) is the online integrated information system which supports Public Library and Schools' programs. ACORN facilitates internet access to the library materials, catalogue services, and electronic information sources which include 23 full text databases in the County and globally through the web. ACORN operates under a five-year license and maintenance agreement which expired in May 2002. The County has chosen to exercise one of three optional one-year contract extensions. The proposed funding would provide for a consultant to assess the current system, develop user requirements, and prepare specifications to be included in the Request for Proposal (RFP) to solicit a product and service-provider for the future. ($50,000)

• Fiscal Impact 3 - FY 2004 PAYG funds will be used to plan for future implementation of this project. This planning will include a projection of operating costs and will be presented with requests for future implementation funds. There will be no impact on the FY 2004 operating budget.

• Traffic Signal Cabling Replacement. This project would replace the existing twisted pair cabling currently in place for the traffic signal communication system. This system benefits both Arlington County DPW and VDOT Signal Operation Division. The communications system must accommodate existing and planned signalized intersections and potential Intelligent Transportation System (ITS) elements. ($150,000)

• Fiscal Impact 1 - Capital maintenance, replacement or upgrade program – no increase to FY 2004 operating costs.

VII. REGIONAL PARTNERSHIPS

Northern Virginia Community College $192,000

This proposed funding represents the County's ongoing capital contribution to the Northern Virginia Community College (NVCC) program to construct a community center at each of its five campuses and to contribute to NVCC's overall capital program. Arlington is one of nine jurisdictions that NVCC's capital program receives funding from based on population.

Northern Virginia RegionalIdentification System $32,000

This proposed funding represents the County's FY 2004 share of improvements made to the regional fingerprint identification system's image and retrieval capability. This upgrade was financed as a multi-year, lease-purchase agreement with the County's share of the FY 2004 payment included in this budget. The upgrade provides Northern Virginia's law enforcement agencies with a more efficient, accurate, and cost-effective means of identification.

Peumansend Creek Regional Jail Authority $213,000

This proposed funding for FY 2004 represents the County's proportional share of the FY 1992 decision to design, construct, and operate a low‑to‑medium security regional jail in Caroline County on land (Fort A. P. Hill) transferred by the Department of Defense. Arlington is one of six jurisdictions that provide funds based on the allocated beds. This is part of an overall strategy for housing local prisoners in a cost-effective manner. This $213,000 funds the debt service payment of the bond financing. Legislation in the 1996 General Assembly provides for a state reimbursement of 50 percent of allowable construction costs. Arlington's annual share of the capital cost is based on current bed allocation and is projected at 18.46 percent for the 60 beds allocated to Arlington. The County has provided a moral obligation, "joint and several" pledge on this financing and will have capital commitments from this bond financing through the year 2017 as well as ongoing operating commitments as a member of this Authority.

Northern Virginia Regional Park $429,000

The Northern Regional Park Authority (NVRPA) is a multi-jurisdictional agency comprised of Arlington County, Fairfax County, Loudoun County, Alexandria, Falls Church, and the City of Fairfax. The Park Authority owns and operates 11,000 acres of parklands with 18 major parks, including Potomac Overlook, Upton Hill and the W&OD Regional Parks in Arlington. This proposed capital funding for FY 2004 represents Arlington's annual contribution to NVRPA's capital program and is based on the percentage of population of the six jurisdictions.

Northern Virginia Criminal Justice Academy $157,000

In FY 1993, the participants in the Northern Virginia Criminal Justice Academy (NVCJA) agreed to purchase a building in Loudoun County at Routes 7 and 28 to house the NVCJA's programs. Previously, the NVCJA occupied leased space in Claremont School in Arlington that was reclaimed by Arlington Public Schools. This proposed capital funding for FY 2004 represents Arlington County's share of the lease‑rental payments for the facility. The local debt service shares will gradually decrease now and end in FY 2008.

• Fiscal Impact 4 - The Regional Partnerships program represents the County's annual contributions to support the capital efforts of regional programs. Because these are outside agencies, there are no direct County operating costs.

TOTAL BUDGET $9,000,000