“Alone we can do so little; together we can do so much.” -Helen Keller
Unlocking Revenue Streams for Municipal Capital Improvement Programs: A Guide by FLAG
Municipalities across the country face the challenge of balancing budgets while striving to improve and maintain essential infrastructure. As a leader in program management consulting, FLAG understands the intricacies involved in managing capital improvement projects (CIPs) efficiently and effectively. This guide explores various strategies that FLAG can implement to assist municipalities in generating additional revenue for their CIP projects, ensuring sustainable development and enhanced community benefits.
Public-Private Partnerships (P3s)
Public-Private Partnerships (P3s) offer a collaborative approach to funding public infrastructure projects. By partnering with private sector entities, municipalities can leverage private investment to finance public projects, reducing the financial burden on local budgets. P3s not only bring in private capital but also introduce innovative solutions and operational efficiencies from the private sector. FLAG can facilitate the development of P3s by identifying suitable private partners, structuring agreements, and managing the partnership throughout the project lifecycle.
Leveraging Underutilized Assets
Municipalities often possess underutilized assets that can be monetized to generate revenue. This includes leasing public spaces for events, advertising, or telecommunications infrastructure. FLAG can assist municipalities in conducting asset inventories, identifying potential revenue-generating opportunities, and developing strategies to maximize the value of these assets.
Grants and Funding Programs
A wide array of federal, state, and local grants and funding programs are available to support infrastructure development. FLAG can help municipalities navigate the complex landscape of grant applications, ensuring they secure the necessary funds for their projects. Here are some key types of grants and funding programs:
- Federal Grants and Funding Programs
- BUILD (Better Utilizing Investments to Leverage Development) Grants: These grants support road, rail, transit, and port infrastructure projects.
- INFRA (Infrastructure for Rebuilding America) Grants: These provide funding for highway and freight projects of national and regional significance.
- EPA Brownfields Program: Offers funding for the cleanup and redevelopment of contaminated properties.
- Water Infrastructure Finance and Innovation Act (WIFIA): Provides long-term, low-cost supplemental loans for significant water and wastewater infrastructure projects.
- Community Development Block Grants (CDBG): Administered by HUD, these grants support community development and infrastructure projects benefiting low- and moderate-income communities.
- Economic Development Administration (EDA) Grants: Funds infrastructure projects that promote job creation and attract private investment in economically distressed areas.
- USDA Community Facilities Direct Loan & Grant Program: Supports the development of essential community facilities in rural areas.
- State Grants and Funding Programs
- State Infrastructure Banks (SIBs): Provide loans and credit enhancements for transportation projects at below-market interest rates.
- Clean Water State Revolving Fund (CWSRF): Offers low-interest loans for water quality protection projects.
- Drinking Water State Revolving Fund (DWSRF): Provides financing for drinking water infrastructure improvements.
- Local Grants and Funding Programs
- Municipal Bonds: General Obligation Bonds and Revenue Bonds can be issued to finance a variety of infrastructure projects.
- Tax Increment Financing (TIF): Allows municipalities to finance improvements by capturing future tax benefits of increased property values.
- Local Economic Development Programs: Provide grants or low-interest loans for infrastructure projects that promote economic development.
Tax Increment Financing (TIF)
TIF districts enable municipalities to finance current improvements with the anticipated future tax revenues generated by those improvements. This method is particularly effective in areas poised for significant development or redevelopment. FLAG can assist municipalities in establishing TIF districts, conducting feasibility studies, and managing the implementation of TIF-funded projects.
Development Fees and Impact Fees
Adjusting development and impact fees ensures that new developments contribute fairly to the infrastructure costs they impose on the community. FLAG can help municipalities review and update their fee structures, aligning them with the actual costs of infrastructure improvements and ensuring that growth pays for itself.
Special Assessment Districts
Special assessment districts allow property owners in a designated area to pay an additional tax to fund improvements that directly benefit them. This can be used for projects like road improvements, street lighting, or sewer upgrades. FLAG can guide municipalities in establishing these districts, conducting stakeholder engagement, and managing the collection and allocation of funds.
Revenue-Generating Services
Developing new services that generate revenue can provide municipalities with a steady income stream. For example, municipalities can create utility services (like municipal broadband) or public transport systems that generate user fees. FLAG can assist in the feasibility studies, planning, and implementation of these services, ensuring they are financially viable and meet community needs.
Real Estate Development
Identifying potential real estate development opportunities on public land can generate significant revenue. This includes developing mixed-use projects that produce lease or sales revenue. FLAG can help municipalities identify suitable properties, attract developers, and manage the development process to maximize returns.
Green Bonds and Sustainability Initiatives
Issuing green bonds to fund environmentally friendly projects can attract a broader range of investors and often come with lower interest rates. FLAG can assist municipalities in identifying suitable projects, structuring green bond offerings, and managing the issuance process.
Economic Development Zones
Creating economic development zones with tax incentives can attract businesses, boosting local tax revenues. FLAG can assist in the planning and implementation of these zones, ensuring they are designed to maximize economic growth and community benefits.
Community Benefit Agreements
Negotiating community benefit agreements with developers ensures that large projects contribute to community needs such as affordable housing, parks, or public facilities. FLAG can facilitate these negotiations, ensuring that the agreements align with community priorities and provide tangible benefits.
Crowdfunding and Community Investment
Community crowdfunding for smaller projects not only raises funds but also increases community engagement and support. FLAG can assist municipalities in developing crowdfunding campaigns, engaging with the community, and managing the funds raised.
Educational Partnerships
Collaborating with local educational institutions for research and development projects can secure funding from educational grants and lead to innovative infrastructure solutions. FLAG can facilitate these partnerships, ensuring they align with municipal goals and provide mutual benefits.
Tourism and Cultural Initiatives
Developing tourism and cultural initiatives can generate revenue through increased visitor spending. This can include heritage tourism, cultural festivals, and sports events. FLAG can assist in planning and promoting these initiatives, ensuring they enhance the community’s cultural and economic vitality.
Utility Revenue Bonds
Issuing utility revenue bonds, repaid from the revenue generated by utility services, can be particularly effective for water, sewer, and electricity projects. FLAG can help municipalities structure these bond offerings, manage the issuance process, and ensure the projects are financially sustainable.
Implementation Approach
To successfully implement these strategies, FLAG follows a structured approach:
- Assessment: Conduct a thorough assessment of the municipality’s current assets, financial position, and local economic conditions.
- Stakeholder Engagement: Involve key stakeholders, including community members, business leaders, and public officials, to gather input and build support.
- Feasibility Studies: Perform feasibility studies for proposed revenue-generating initiatives to ensure their viability and potential impact.
- Strategic Planning: Develop a comprehensive strategic plan that outlines the steps needed to implement chosen strategies, including timelines, required resources, and potential obstacles.
- Monitoring and Evaluation: Establish mechanisms for ongoing monitoring and evaluation to track the success of revenue-generating initiatives and make adjustments as needed.
Conclusion
By integrating these strategies into their CIP projects, municipalities can unlock new revenue streams, ensuring sustainable infrastructure development and enhanced community benefits. FLAG’s expertise in program management consulting can guide municipalities through the process, helping them secure the necessary funding and resources to achieve their infrastructure goals while minimizing the financial burden on their budgets. Together, we can transform the landscape of municipal infrastructure development and create thriving, resilient communities.
At Front Line Advisory Group, we manage Capital Improvement programs to ensure they are completed on time and within budget. We make sure every dollar is used wisely to improve our community. For more information or to start your project, contact us at info@frontlineadvisorygroup.com
