FIN-2.03.02 Operations and Maintenance Cost

These procedures are intended to ensure that:

· A funding plan is in place for the maintenance and lifecycle replacement of new capital assets and equipment.

· Bureaus that require additional resources – particularly General Fund - for the maintenance and lifecycle replacement of new capital assets and equipment have a degree of certainty during the planning stage that such resources will be allocated when assets come into service

· City Council is aware of the cumulative out-year maintenance and lifecycle replacement cost impact of capital plans during the budget process

· City Council, to the greatest degree possible, prospectively approves increases to General Fund appropriation levels in the context of the budget process

· Costs funded with additional General Fund are high-confidence figures

Project Planning

Bureaus will include O&M and out-year maintenance and lifecycle replacement estimates for each project or program in the Capital Improvement Plan and Financial Plan submitted with the Requested Budget. In instances where a funding source for capital improvements has been budgeted but has not been allocated to specific projects, a low confidence estimate should still be included based on the availability of funding.

Bureaus that will request that all or a portion of the costs identified in the CIP be funded with additional General Fund appropriations shall include a year-by-year estimate of those costs in the five-year financial plan submitted as part of the Requested Budget.

General Fund Requests

During budget development, bureaus should request new General Fund for:

· Any projects that are anticipated to be contracted in the upcoming year for which new General Fund resources are expected for operations

· Any projects that were contracted in the current or prior year which were not anticipated during that year’s budget process

· Any projects that were completed in the current or prior year which were not included per the previous two bullets

Requests should include a one-time reduction for each project to reflect the estimated in-service date. In some cases, this will be a full year. In some cases, an additional offset will be required during the following year’s budget process to account for longer project timelines.

During the budget process, the final amount and funding source will be determined by City Council.

Budget Monitoring Processes

During budget monitoring processes, bureaus that have received General Fund allocations for operations, maintenance, and lifecycle replacement will identify projects that have gone into service and adjust one- time offsets appropriately.

Contract Ordinance

Bureaus will include the most up-to-date cost estimate for operations and maintenance in construction or acquisitions ordinances and indicate whether that amount has been included in a budget process or will be requested as part of the following budget process.

Responsibility

City Budget Office