Clerk/Treasurer’s Office

Capital Bond

Prior to the creation of the Capital Plan in 2015, Burlington faced numerous challenges as a result of chronic underinvestment and delayed maintenance of critical infrastructure. Over the first five years of implementation, the Capital Plan has driven investment in key City infrastructure including doubling street reinvestment, replacing over 14 miles of sidewalk, and rehabilitating virtually the entire bike path. Over the next three years, Burlington faces over $151 million in capital needs to address deferred maintenance at Memorial Auditorium, replace key fleet vehicles such as three new firetrucks and new sidewalk tractors, maintain our elevated investment in streets and sidewalks, advance the City’s Walk/Bike plan, build major transportation projects (like the Shelburne Road rotary now under construction) and more.  

The City is proposing that these $151 million of infrastructure projects be funded in-part through a $40 million General Obligation bond. $3.5 million of those bond proceeds would in turn leverage an additional $60 million in State and Federal dollars for landmark projects like the Railyard Enterprise Project – so that two thirds of the total plan is funded with revenues other than property tax dollars. 

The City team is working hard to leverage tens of millions of dollars from other sources that will not impact your property taxes, we will need to contribute to continue this generational progress renewing our infrastructure.  When fully drawn down in three years, the projected cost of this new bonding for the average Burlington property taxpayer is approximately $13 a month. 

Frequently Asked Questions 

What are capital improvements/capital assets? 

A capital improvement is the addition of a permanent structural change or the restoration of some aspect of a property that will either enhance the property's overall value, increases its useful life or adapts it to a new use. 

A local government’s inventory of capital assets often represents its most significant investment of municipal resources. Over time, purchases of buildings, equipment, machinery, and other long-term assets can result in the accumulation of (tens of) millions of dollars in municipal property. Like any portfolio, these assets need to be actively managed to ensure that the most value is received from this considerable investment. 

Capital assets are defined as tangible or intangible assets that are used in operations and have useful lives of more than one year. Capital assets include land and land improvements, buildings and building improvements, vehicles, machinery, equipment, sewer, water and highway infrastructure. 

What City capital assets does this plan support? 

The City’s fleet (including three new firetrucks), civic buildings (including $10 million for Memorial Auditorium), roads, sidewalks, bridges, bike lanes, traffic calming and upgraded intersection safety, parks, IT, and public safety infrastructure. 

Why are these needs so great now? / Why are we tackling so many different needs at one time? 

From the assessments completed between 2014 and 2016, the City documented a large backlog of deferred maintenance within all of our assets following many years of under-investment in the City’s capital needs.  

In 2016, the City Council approved the City’s first Capital Plan, a 10-year plan to tackle these overdue infrastructure investments. Over the first five years the Capital Team prioritized and executed the most important projects, however we still have a lot of work to do across Burlington before reaching a sustainable maintenance level of investment in our capital needs. We have $151 million of capital needs remaining over the next three to five years. 

 What are the effects of delaying capital investment? 

If we continue to delay and defer capital investments, key systems and assets will fail causing increased expenses for taxpayers over time and potentially diminished public services.  

For example, after many years of differed maintenance in Memorial Auditorium, the City had to close the building which was no longer safe for the public to use. Re-opening Memorial Auditorium or transitioning it to another use will now require a significant one-time expense, which we have included in this bond proposal.  

Why don’t we just tackle a few of these projects so that the plan costs less? 

With the City’s new asset management platform, all assets will be managed to determine criticality and aid in the determination of which asset should be replaced and when. A number of our assets are in the “serious to failed” category. Delaying the work will ultimately cost more in repairs than the cost of replacement. 

What if we delayed the bond until spring?

Covid has already caused a one-year delay in bringing the bond to voters for approval. In the FY21 budget, the City was able to use federal relief dollars to fund a full construction season. If we delay this GO Bond it would seriously jeopardize our ability to use the full 2022 construction season to advance important projects. Because of obligated expenses such as staffing and local matches for grant-funded projects already underway, there would be very little tax revenue available for streets, sidewalks, bridges, and parks, and funds for IT, Public Safety, Fleet, and Civic Buildings would be reserved only to replace failed assets on an emergency basis. This can be costly and interrupt critical city services.  

Right now, the cost of borrowing is low, but future changes to interest rates is uncertain as the economic recovery continues.   

Are property taxpayers paying for the whole plan?  

No, the City has identified $151 million in capital investments needed over the next three years for priority projects. $40 million will be paid for by GO bond proceeds, if approved by voters, and $111 million will come from other revenues including State and Federal Transportation Grants, Street Capital Tax, Traffic Revenues, Penny for Parks Tax, Annual Bonding, ARPA, and the Federal Infrastructure Bill.  

Included in the projected GO Bond spending is $3.5 million reserved for local matches that will allow the City to leverage at least $60 million in State and Federal investment. With Federal Infrastructure dollars uncertain, we may need much more in local match dollars to secure future federal funds. This GO Bond will position the City well to capture additional funding if it becomes available.   

If we get more federal money in the future, do we need to borrow/spend all $40 million? 

We do not need to draw down all $40 million if other funding becomes available. However, the overall need of our infrastructure makes it unlikely that we will be able to receive sufficient Federal and State dollars to complete all needed work.   

How was this project list developed?

With the approval of the Capital Plan in 2016, a committee of Department Heads was created to review, prioritize, and determine the best strategy for managing all City assets and projects. That team evaluated criteria and measured projects against each other, with the goal of prioritizing projects for investment in the Capital Plan.  

How will approving this plan affect the Burlington School District’s capital needs? 

The City will continue to work with the Burlington School District to find opportunities to improve efficiencies and further define where capital needs may be shared. 

Thanks to many years of strong and responsible fiscal management, including creating and implementing a new debt policy, the City can take out this new GO Bond debt for infrastructure and retain significant debt capacity for a future bond to meet the School District’s needs and maintain a high rating from Moody’s Investor Services.  

Will this capital plan improve accessibility? 

Yes, all improvements will take into consideration accessibility needs.  Capital projects completed during the initial five years of this Capital Plan improved the accessibility of our sidewalks, municipal buildings, bike path, and other assets.  

How will this advance address the climate emergency? 

The bond supports the implementation of planBTV Walk/Bike and investments in City buildings that support our Net Zero energy goals. The GO Bond will support our goals to add more than 12 miles of new bikeways by 2026, in addition to advancing major walk/bike improvements like the Railway Enterprise Project, University Place, and a grant-funded side path at the Intervale.  

When will my sidewalk/street be repaired? 

There is a list of priorities from a 2014 assessment and annual inspections. Over the last five years, the City has replaced 11.5% of our 130 miles of sidewalk. While that rate of replacement is a substantial and historical improvement, there is still a minimum of 5% (and growing) that remain in the “poor to failing” category.  

The City has also resurfaced over 22 miles, or 23%, of our roadway network over the last five years. Our goal is to maintain an average condition of “good” across the entire network to ensure a safe, ridable surface for not only passenger cars, but transit, commerce vehicles, bicycles, and crossing pedestrians. 

Before the Capital Plan was initiated, the City replaced one mile of sidewalk per year and spent $1 million per year on street reinvestment. With proceeds from the GO Bond, the City can maintain our current increased pace of sidewalk replacement of three miles per year and street reinvestment of $2 million per year.  

Will the approval of the plan and the associated borrowing possibly limit future property tax increases?  

The Capital Plan institutes that the transfer of stewardship of our assets from reactive (breakdown) to proactive (maintaining the reliability of the equipment) saves the City in downtime, overtime, discomfort, and need to expedite items which can amount to hundreds of thousands of dollars. 

A good preventive maintenance program preserves assets, keeps things running in optimum condition, and helps insure that maximum life expectancy is achieved. It also helps managers anticipate failure thereby allowing time to plan and budget for replacements as well as perform work at more convenient times. All of these factors make Preventive Maintenance a more predictable and cost effective way to operate. Predictive Maintenance can save as much as 8% to 12% more than Preventive Maintenance strategies alone and could save 30% to 40% more depending on asset condition. 

Didn’t we already do a general obligation bond for infrastructure? What did that pay for and why do we need another one? 

In November 2016 voters approved the first Sustainable Infrastructure bond for $27.5 million. Between 2016 and 2018 the City invested those bond proceeds in major projects including; improving over 15 miles of sidewalk (11.5% of the total network), replacing 2.68 miles of curbing, rehabilitating almost eight miles of bike path, installing new bike lanes, resurfacing over 22 miles of our streets (23% of our roadway network), improving IT and security in City buildings, renovating City Hall and 645 Pine Street, and creating a Fleet Committee that has worked to replace 28% of City vehicles.  
Even with all that work complete, we still have a lot of deferred maintenance to catch up on. The City has identified $151 million in capital needs over the next three years, including assets (vehicles and technology) that have reached the end of their use and need to be replaced.   

Will this be the last GO Bond for infrastructure?  

It is the Administration’s goal to complete the next $151 million in capital investments to catch up on deferred maintenance across the City, and in the future our goal is to sustainably fund regular infrastructure maintenance. The City will likely need to bond in the future for major community projects, but another bond should not be required to complete the priority projects identified in 2016.