County staff present macro overview of recommended FY26 capital budget; committee flags Summit Avenue deferral and impact tax timing

County staff gave the Government Operations & Fiscal Policy Committee a top-line briefing on the county executive's recommended FY26 capital budget and the amended FY25-30 capital improvements program, stressing this was a macro overview and that committees will later review individual projects.

"We are focusing on the big picture today," staff member Lachinko said at the start of the presentation, noting OMB and finance staff were present to provide technical detail as committees examine individual projects.

Staffists said that, overall, the executive's amended CIP is largely marginal compared with the previously approved plan. The perceived decline in Montgomery County Public Schools (MCPS) entries reflects technical accounting shifts and early FY24 spending that had been shown in the CIP for FY25 and FY26, not a programmatic cut, Lachinko said. Mia added that some state-aid lines also shifted as part of these adjustments.

Transportation spending showed a slight decline in the amended CIP, and staff called out one specific programmatic deferral: the Summit Avenue extension project was moved beyond the six-year window the executive submitted. "There is one project, the Summit Avenue extended project, which is deferred beyond six years," Lachinko said.

On revenues, staff described the major funding sources that support the CIP (general obligation bonds and intergovernmental revenues among the largest shares) and highlighted several specific changes: Mia said the recommended G.O. bond program remains approximately $1,680,000,000 over six years (about $280,000,000 per year) and that the executive increased a G.O. bond set-aside substantially for FY26 to preserve capacity for Woodward High School pending state aid clarity. The presentation noted a PAYGO shift in FY25 (shown in the materials as a drop from $51,200,000 to $28,000,000 for FY25) that staff said was intended to free up operating flexibility while keeping PAYGO near the county's policy level in other years.

Staff also flagged volatility in impact-tax forecasting: Mia reported impact taxes are down in the current forecast and estimated the change at about $13,000,000 across the six-year period, and cautioned that projection is uncertain. Staff further noted that a separate council bill (Bill 22-24) — not yet adopted and not reflected in the CIP forecast — would allow developers to pay impact taxes later in a construction cycle, shifting timing of receipts and reducing early-year revenue for the CIP though the bill's authors say total collections would ultimately be equivalent.

Mia identified two small new G.O.-funded projects in the recommended CIP packet (a Brookville Depot HVAC project and a Greg Road bridge project) and said most other new projects rely on restricted outside funding, limiting the council's ability to defer new work.

Staff framed reconciliation options for the council: restore some PAYGO to address near-term capital needs, adjust G.O. bond set-asides, or consider other minor adjustments. They said committees will still need to examine micro-level project details as the reconciliation process continues.

The chair thanked the executive and staff for the briefing and emphasized that no decisions were made during the overview; committee members agreed that the starting point appears fiscally responsible but noted there is still substantial detailed review ahead. The committee did not take a vote on the CIP at this meeting.

Next steps: the committee will review individual CIP projects and reconvene with T&E and other committees as needed; the council will reconcile the CIP and operating budget in the coming weeks.