Planning staff presents FY2026'031 Capital Improvements Program; $148 million six-year total

City planning and finance staff presented the proposed Fiscal Year 2026'031 Capital Improvements Program to the Planning Commission on Feb. 19, outlining a $148 million six-year program that staff described as more conservative than last year's plan and refocused on infrastructure reinvestment, multimodal transportation, and an explicit six-year planning process for the Affordable Housing Fund.

Why it matters: The CIP sets the capital spending and funding plan that guides investment in public facilities, transportation, sewer and stormwater, and other capital needs. Commission review is advisory; the City Manager will present a proposed budget to City Council in March, and Council adoption is anticipated in May.

High-level totals and funding mix: Staff reported a six-year total of about $148 million distributed among special transportation ($59 million), general government and school-related projects ($51 million), sewer ($35 million) and stormwater ($3 million). The largest funding source is debt financing (about $57 million), followed by grants (about $46 million). Staff said debt for the property yard and pending grant outcomes were material drivers of the funding mix.

Key program changes and highlights:

- Transportation: The CIP continues multimodal emphasis with funding for two priority bike routes (an east'west connection and West Street), a State of Good Repair paving request for Broad and Washington, and a newly proposed "traffic signal infrastructure investment" program intended to consolidate signal upgrades and accelerate delivery by using local funding and a master plan for signal replacement. Staff said some intersection projects were deferred or deallocated to smooth workload and local funding needs.

- Facilities and property yard: Facilities reinvestment shifts from an annual "pot" approach to discrete, scorable projects for transparency. The property yard remains in the six-year plan (previously budgeted $30 million) but staff moved construction funding later (split into smaller increments in FY28-FY29) pending a technical assistance report (ULI) and additional scoping.

- Schools and public buildings: A Mary Ellen Henderson roof replacement tied to rooftop solar was included; City Hall rooftop solar work remains in the plan. Staff noted a possible need for additional capital for Fire Station No. 6 under a revised interlocal agreement with Arlington County, and that costs for station maintenance and a proposed roof replacement could increase the station's capital needs later in the six-year window.

- Sewer and stormwater: A nutrient-credit purchase project previously budgeted was partially funded with a state Stormwater Local Assistance Fund (SLAF) award of $640,000; staff are pursuing additional SLAF and federal funding to offset anticipated nutrient purchases and a $10 million flow-equalization basin project (the city applied for a $3 million federal appropriation). Staff said the basin remains in the CIP with debt financing included in case outside grants are not awarded.

- Affordable housing fund: Per recently adopted financial policy, staff prepared a concurrent six-year plan for the Affordable Housing Fund; it remains part of the operating budget but will be presented alongside the CIP for coordination. The initial, unconstrained plan relies on HUD formula funds (CDBG/HOME), local fund balance and other sources with allocations for the City's Committed Affordable Unit program, a development fund for Virginia Village, housing preservation, and pilot homeownership programs.

Process and next steps: Staff asked the Planning Commission to review the draft during this work session and return for a formal public hearing and recommendation at the March 5 meeting. The City Manager will publish a proposed budget package to City Council on March 24 and City Council is scheduled to adopt the FY26 budget in May.

Commissioners' input: Commissioners discussed the timing and staging of large projects (for example, the North Washington multimodal reconstruction was deferred toward FY28 to manage staff capacity and funding), the property yard schedule and the need to await the ULI technical assistance recommendations, the practical implications of pursuing federal and state grants (and the risk if those grants do not materialize), and how the CIP now documents comprehensive-plan, equity and energy alignment checklists for each project. Commissioners asked staff to add an acronym glossary and to make grant dependencies and debt assumptions clearer in the materials; staff said they would provide additional detail and update the online CIP notebooks as items evolve.

Ending: Staff will present the CIP for public hearing on March 5 and bring a recommendation to the Planning Commission; Council will receive and review the proposed budget package in late March with adoption expected in May.