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City planning office outlines causes of slow capital spending, to start fully funding construction projects in FY26
Summary
Planning staff told the Budget committee that low spending on many capital projects stems from incremental appropriations, duplicate project lines and unconfirmed state or federal revenue; starting in fiscal 2026 the city will generally fully fund construction phases in a single year to reduce multi‑year delays.
The Department of Planning told the City Council Budget and Appropriations Committee that a range of administrative and funding practices explains why many capital projects show little spending through the third quarter of fiscal 2025.
The nut of the issue is that projects often cannot be awarded until full construction funding and backing revenue are recorded. That practice — combined with legacy reserve accounts, duplicated project identifiers after software transitions, and appropriations entered without a confirmed federal or state revenue award — has left substantial appropriations unspent and slowed delivery.
“Starting in fiscal year 26, we put in place a new policy that we are fully funding a construction phase in a single year,” Planning Department presenter Sarah Parnellum told the committee, adding that the change should reduce delays tied to multi‑year partial funding. Parnellum also said the office recently went to the Board of Estimates and Planning Commission to consolidate duplicate project accounts and to deappropriate state and federal appropriations that lacked confirmed revenue; those actions will show in the quarter‑four report.
Parnellum explained other common reasons projects appear stalled: projects that need additional funding before bidding; multiple PRJ (project) identifiers for the same scope created during the migration to Workday and Adaptive budgeting software; and appropriations that were included in the budget in anticipation of awards that did not materialize.
She urged committee members to consult the capital report provided with the packet — which lists every project’s total appropriations, expenditures and obligations — and offered to connect council members with implementing agencies for project‑level follow up. Andrew Aileshire of the mayor’s Office of Infrastructure Development, in the hearing room, was named as a point of contact for process improvements and project delivery support.
Committee members asked whether fully funding construction in a single year would reduce the total number of projects funded; Parnellum acknowledged it likely would and said the administration will provide a council‑district breakdown of proposed FY26 capital investments.
The hearing did not produce a council vote; planning staff said they will return with cleaned‑up quarter‑four reporting and a district breakdown of proposed capital appropriations.
