Alexandria staff present $2.08 billion, 10-year capital plan; say no net new long-term borrowing

City staff presented the city manager's proposed fiscal 2026'2035 Capital Improvement Program (CIP) at a budget work session, describing a 10-year program totaling $2,080,000,000 and a year-1 capital budget of $205,900,000.

The presentation, led by Arthur Wicks of the Office of Management and Budget, told council the plan continues previously approved projects, emphasizes state of good repair and school capital commitments, and was constructed without a net new increase in long-term borrowing over the 10-year horizon. Wicks said, "We are continuing to execute on our approved plan," and that the proposed CIP is "consistent with our long term borrowing plan" from the prior CIP.

Why this matters: the CIP's mix of cash and debt and its effect on the operating budget are central to the council's decisions. Staff said 46% of the 10-year program will be paid with cash sources, a ratio municipal finance professionals often call healthy; general-fund support (cash capital plus debt service) for fiscal 2026 was presented at about $133 million, or roughly 14% of the general fund operating budget.

Key details presented

- Size and split: Staff described the 10-year, all-sources total as $2,080,000,000, with year 1 budgeted at $205,900,000. Across the 10 years, GO bonds were identified as the largest funding tool ($870,000,000), plus $255,000,000 in long-term borrowing expected to be paid by dedicated utilities (stormwater, sanitary). Staff said 46% of the plan is cash-funded.

- Debt capacity and policy: The presentation showed the CIP remains inside the city's self-imposed debt-management thresholds but noted the program tightens the city's capacity in fiscal 2029'2031. Wicks summarized the metric staff watch most closely as outstanding debt relative to fair market real property value and said the plan remains compliant while leaving a narrow cushion: "we're within two tenths of a percentage point of our limit" around the 2029'2031 period.

- Amortization and affordability: Staff emphasized aggressive principal amortization as a policy: long-term debt is scheduled with level principal over 20 years so principal repayment occurs quickly and interest decreases over time. The presentation highlighted that policy and said the city's approach to issuance timing (borrowing on a cash-flow basis rather than borrowing funds early) helps manage debt service pressures.

- Sources and uses: Staff said roughly half of year-1 funding comes from unrestricted city sources (general fund cash capital and general-fund-backed bonds) with substantial grant and dedicated revenue contributions in transportation and other portfolios. Schools account for roughly 14% of total investments over 10 years and about 23% of unrestricted city funding.

- Project timing and peak years: The manager and staff flagged a growth in debt service and cash capital transfers between fiscal 2026 and 2029 as projects including George Mason, City Hall/Market Square and other large efforts come online; staff said that earlier versions of the forecast showed slightly higher peak growth and that ongoing reprioritization has modestly smoothed the curve.

What staff recommended and next steps

City staff recommended council approve the year-1 budget and the 9-year plan, consistent with past practice, and reiterated the calendar: council will adopt the budget and then consider an appropriations ordinance and a bond authorization ordinance (the ordinance authorizes staff to issue bonds matching the capital plan) at the first legislative meeting in June. Staff said that if additional revenue becomes available, they would recommend directing it to cash capital to ease long-term debt pressure.

Questions from council focused on the year-1 funding split, timing of borrowings, the role of grants, and how decisions on repairs versus new projects affect the operating budget.

Ending

Staff closed by reiterating the CIP's priorities: maintain core assets, sustain school capital commitments and use strong financial management to execute the plan while monitoring near-term debt capacity tightness. Council will continue CIP review at later budget work sessions and the city manager and budget staff said they would provide requested memory items and project-level breakdowns.