Raleigh previews five-year CIP and steady‑state financing options; fire stations and transportation lead requests

Hannah Osborne, the city’s senior capital programs analyst, and Allison Bratcher of the finance department presented a preview of the City of Raleigh’s five-year capital improvement program and an accompanying long-term financing framework during a council work session.

Osborne told council that a capital budget is “a legal document adopted by ordinance” and that the city’s capital threshold is $25,000. She said capital funding falls into two broad types: debt financing and PAYGo (cash financing). “General obligation bonds are approved through ballot initiatives and are backed by the taxing power of the city,” she said, noting that parks, affordable housing and major transportation projects are often funded with GO bonds while Raleigh Water uses revenue bonds.

Nut graf: Staff presented a five-year request preview that is dominated by public-safety construction (largely fire stations), followed by transportation and new city facilities; finance staff also outlined a “steady‑state” financing model that would use recurring, predictable bond capacity instead of ad hoc large bond packages.

Requested capital needs and cost pressures

Osborne said the largest identified capital commitment in the FY26–FY30 requests is for fire stations, followed by transportation and new city facilities. She flagged rising delivery costs across multiple categories: HVAC replacement costs rose about 90% over the past year, bridge-repair costs increased roughly 65% over three years and certain video-camera hardware costs rose about 250%.

She explained that the city assumes 2% annual growth in the value of a penny when building the PECO (Pay‑as‑you‑go equivalent) CIP and that certain projects are excluded from the displayed request totals — namely dedicated PECO allocations for street resurfacing, parks maintenance and affordable housing and any future general‑obligation bonds that require voter approval.

Evaluation and funding decisions

Osborne described a nine‑criteria rubric used to evaluate requests; safety, urgency and regulatory compliance are given greater weight in the process. She said departments submit operating‑impact estimates for projects that carry future staffing or equipment needs so those costs can be factored into later budget years.

Long‑term financing and steady‑state scenarios

Allison Bratcher in finance discussed a steady‑state financing concept intended to create more predictable capital funding. Under one scenario modeled for council, the city has “debt capacity to issue $90,000,000 of debt every four years,” Bratcher said. She presented alternative scenarios showing higher capacity if the council opted to allocate additional property‑tax capacity (for example, simulations at an additional 1¢ or 2¢).

Bratcher said the model tracks general obligation and limited obligation bonds and is used to evaluate debt capacity, credit impacts and affordability. She noted that the model shown does not incorporate other long‑term liabilities such as OPEB or certain statutory pension obligations and that bond‑anticipation notes used in prior years have reduced current two‑thirds capacity.

Council questions and next steps

Councilors asked for more detail about the likely split within transportation/mobility between roads, sidewalks and bicycle facilities, for district‑level CIP project lists, and for clarity on operational impacts tied to new facilities (staffing and equipment). Staff said they will provide additional detail in manager briefings and in the April 7 work session, when enterprise departments (Raleigh Water, Stormwater, Solid Waste) present their operating and capital budgets.

Osborne and Bratcher said the proposed five‑year CIP and the city manager’s proposed FY26 budget will be presented to council on May 20; staff also said they will coordinate with Wake County and the school system on bond timing to avoid voter fatigue.

Ending

Staff characterized the presentation as a preview and emphasized that final capital recommendations and financing choices will be included in the city manager’s proposed budget package for council review in May.