Cheat Sheet: The capital budget hearing

Now that Mayor Nutter has made his budget proposal, City Council is set to begin holding hearings to debate the details. To help keep you up to speed, we'll be publishing "cheat sheets" with important facts and figures about the department being debated, and telling you how and when to share your thoughts with Council. After the hearings, we'll solicit your "testimony," and hopefully wrap it all up by giving you a chance to design your own city budget.

Time and Location: Tuesday, March 16 @ 10 a.m., City Council chambers (4th floor of City Hall). There’s no public testimony built into the schedule.


What it is: The city’s six-year capital plan, released the same day as the mayor’s budget address, lays out spending on infrastructure and other capital improvements.

Why it matters: Though the five-year operating budget gets the most publicity, the six-year capital budget lays out the city’s plans for maintaining its infrastructure, including everything from which terminals at the Airport get rebuilt to how much money will be spent on repairing police stations.

Where the money comes from: The city funds infrastructure improvements by using state and federal money, and by issuing bonds. That second part means the city is basically borrowing money to fund long-term improvements. The money has to be paid back over the life of the bond with money from the general fund devoted to debt service. So the money doesn't impact this year's deficit ... but needs to be paid eventually.

The city has about $115 million it can still issue in bonds before it hits a state-imposed limit meant to ensure that the city doesn't take on more debt than it can handle.

What's in Nutter's plan? The administration is proposing nearly $8 billion of investment over the next six years, including $2.4 billion for 73 different projects this year — $116.3 million of which will be paid for by the city, mostly through bond sales. Though that seems like a lot — and is an increase over Street administration levels — Nutter argues that the investments are necessary to update the city's aging infrastructure and keep the region competitive with other big cities. Some of the money will also go to supporting multi-year projects the city committed to in previous budgets.

Some of the spending the administration is planning includes:

$17.5 million in street resurfacing.
$14.2 million in recreation center improvements.
$4.13 million in Schuylkill riverfront improvements.
$2.5 million in police facility renovations.

What to expect at the hearing: In his budget address, Nutter pushed several big-ticket capital investments, including $120 million in IT spending over the life of the plan. Expect administration officials to tout this spending as a necessary investment in the city’s future. Also expect council members to be sure their districts get a piece of the pie.

What happened last year: In FY 2010, capital spending got a boost from federal stimulus funds, and Council approved a capital budget of $7.8 billion. That money will dry up over the life of this year’s capital budget.

Previous cheat sheets: The Five-Year Plan.