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City manager urges new CIP rules, a replacement fund and $5,000 capital threshold
Summary
City Manager Cole proposed clarifying what counts as a capital project, adopting a $5,000 threshold for capital assets, prioritizing mandatory and high‑priority projects citywide, and creating a dedicated capital improvement replacement fund to smooth future large projects.
City Manager Cole told the Planning Commission he plans to change how the city tracks and funds capital projects, recommending clearer thresholds, a citywide prioritization scheme and a new dedicated fund to smooth replacement costs.
"We're not gonna include anything that is not defined as capital," Cole said, arguing the city should follow guidance from the Government Finance Officers Association and set a minimum capital threshold. He said he started the policy at $5,000 because it is the lowest practical threshold for the city's size and advised commissioners that many jurisdictions use $20,000–$25,000 for that line.
Cole described three categories for proposed CIP projects: mandatory (required by higher authority or contractual obligations), high priority (advancing the comprehensive plan or governing-body priorities) and other (cosmetic or nonessential items). He said staff will prioritize citywide benefit rather than awarding projects by department historically.
Cole proposed creating a capital improvement replacement fund that would take a small percentage from projects each year so money accumulates to pay for high‑cost replacements over time. He also said the city will begin the policy before its new Tyler ERP is online to avoid delaying the changes.
Cole reported baseline numbers from submitted requests: 89 non‑transportation projects were submitted; funding all mandatory projects in fiscal year 27 would cost just over $6 million, and funding mandatory plus high‑priority projects would total about $12.6 million. He said transportation projects are tracked separately because outside funding pays them. Cole also described enterprise‑fund submissions (water and sewer: 19 projects totaling just over $5 million), stormwater requests (about $1.6 million submitted this year after roughly $2 million spent in '26) and noted the solid‑waste contract expires in June 2027 and will require renegotiation.
Commissioners asked about specific treatments. Commissioner Querra recommended a higher capital threshold to avoid adding recurring software subscriptions to the CIP; Cole cited GASB guidance (including GASB 96) as directing treatment of certain subscriptions and said the governing body may set the policy threshold. Commissioner Petak asked whether leased vehicles would remain in the plan; Cole said leases will continue to be shown and that the city is shifting toward owning vehicles longer (target 8 years or 100,000 miles) to reduce recurring costs.
Cole was clear that projects categorized as mandatory are obligations the city must fund to avoid legal or fiscal default. "Anything that's in the mandatory category, we have to do because we're either gonna get sued if we don't or we're gonna default on a bond payment," he said.
The presentation sets a policy direction for the coming budget cycle; Cole said staff will return with project lists after revenues are clearer.
