Columbus’ eye-popping $1 billion capital budget has goodies and trinkets for nearly every neighborhood, but nearly half of the spending is dedicated to disposing of some not-so-pleasant things.
The record-setting budget dedicates nearly $450 million to fixing and adding to the city’s sanitary sewer system that catches, filters and disposes of all human waste generated in the city. The city also plans to spend just under $170 million to improve its water system to keep pace with Environmental Protection Agency mandates and update a century-old system.
In total, About 65 percent of this year’s proposed budget is going to address aging water and sewer systems.
The Columbus City Council plans to approve the budget at its meeting next week.
Of Mayor Andrew J. Ginther’s $1 billion proposed budget, $866 million is new spending and about $165 million is carried over from projects approved in previous years.
Ginther said last week that his budget focuses on neighborhoods, especially the Hilltop and Linden.
“The city needs to lead the way and commit unprecedented resources to these neighborhoods,” he said. “We are investing historic levels in the Hilltop and Linden.”
The difficult part for Ginther is that much of the investment will be in things such as pipes and treatment plants that no one really sees.
There are some things residents will notice: The city has budgeted just under $200 million to repave streets, make intersections safer, fix bridges, add street lights and improve paths for bikers and runners.
That is nearly $35 million more than is being spent on public safety, technology, recreation and parks and development projects combined.
About $33 million of the money for roadways will pay to resurface streets.
There’s also an $11.1 million project to remake the section of West Broad Street on the Scioto Peninsula near COSI. Another $8 million would pay for the already approved widening and resurfacing of Hamilton Road near Gahanna.
How does the city pay for all this?
The capital budget is different than the city’s operating budget, which is also approaching $1 billion. Capital money must go toward lasting infrastructure improvements, machinery and vehicles.
The city’s operating budget is mostly dependent on income tax revenue. The capital budget is mostly financed by debt that the city repays using some income tax revenue and fees the city charges for utilities.
More than half of the $1 billion budget will be paid off using special income tax revenue that comes from improvement districts in certain areas of the city as well as user fees from public utilities, city officials said.
Most of the remaining balance will be paid for with loans from the Ohio Water Development Authority. The city uses the authority to borrow for waterway projects because the authority can offer much better terms on the debt.
City Auditor Hugh J. Dorrian said most of the city’s debt is paid off within 10 years. That’s one of the main reasons all three major rating agencies have given Columbus a AAA bond rating the last several years.
That allows the city to borrow at lower interest rates.
The city currently has $3.9 billion worth of outstanding debt from ongoing capital projects.
Joe Lombardi, the city’s finance director, said there is a formula the city uses to determine how much capital debt it can handle.
“We are adamant about staying with our $1.50 rule,” he said. “Meaning that for every dollar we spend we make sure we are covered with $1.50 in revenue.”
Fitch Ratings, one of the rating agencies, said in its latest report in February that Columbus has a sound process to set its budgets.
“Given the city’s history of conservative budgeting and expected deposits to the rainy-day fund, Fitch expects the city will maintain structural balance,” the report stated.
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