Capital/civic asset planning, budgeting and management processes

The cost to build a new Dunbar High School, even though the city's high schools, including Dunbar, are mostly severely underenrolled was almost $130 million.  

Despite the lack of need for the new building--a definition of unsustainability--the project won awards for sustainability from the US Green Building Council.

The latest talk about public funding and land for a practice facility for the Washington Wizards basketball team and the report by the DC Auditor earlier in the summer about problems with school construction contracting, reminds me that, unlike most every other city and county in the United States, the City of Washington doesn't have an open, transparent, and integrated and comprehensive planning system for capital improvements.

Most places plan and budget for capital improvements in a parallel but separate process from the annual or operating budget.  DC doesn't really do that.  It does capital budgeting as part of the annual budget process.

What that means often is that projects aren't adequately vetted or planned, and usually that means the many projects end up being wasteful or perhaps a poor use of public resources.

For example, Montgomery County, Maryland distinguishes between two budgets: the operating budget (personnel, programs, and interest payments on debt) and the capital budget (construction projects including roads).  The capital budget runs on a six-year cycle, but is updated annually. Baltimore County runs its capital budgeting program similarly.

In those jurisdictions, the capital planning program is overseen by the Planning Board, which makes recommendations, based on an ongoing planning process, and public hearings. The recommendations are then forwarded to the County Legislature for final approval.

However, in DC, the capital improvements program is not the only area of "public or civic assets" that is under-planned.  Other areas include disposition of public lands, alley abandonments (usually for a private purpose), eminent domain actions, and tax abatements, all of which are handled by discrete legislative actions, rather than part of an overall program.

While land disposition and eminent domain projects usually involve payment for the land and/or other public (community benefits), alley closures are almost never associated with payments or proffers ("Council oks GWU alley closing," Northwest Current), which fails to monetize for the public the benefits received by private parties.  That is a practice that should change.

Were DC to set up a comprehensive process for capital planning, management, and budgeting, I would include not just construction projects, but also land disposition, alley abandonment, eminent domain actions, and maybe even tax abatements, out of a recognition that these are the key elements of the city's capital assets, and should be managed in a cohesive and integrated fashion.

To my knowledge (not as comprehensive as I make it out to be), I am not aware of a jurisdiction which has taken capital asset planning to such a level.

Such a process should be supported through the development of an independent and objective review capacity.  Many years ago there was an op-ed in the Boston Globe ("Make eminent domain fair for all") about eminent domain actions and creating a fairer evaluation process.  The points by the authors are relevant to decisions about projects either wholly or partially undertaken by local governments.

From the op-ed:

State court judges have emphasized in the past that, to comply with the Massachusetts Constitution's own requirement that eminent domain be for a public use, the government must demonstrate that eminent domain will really benefit the public. New legislation could respond to that by:

-- Requiring, as Justice Anthony M. Kennedy suggested in his Kelo concurrence, that any exercise of eminent domain for economic development have a primarily public purpose rather than a merely incidental one.

-- Requiring the government to demonstrate the public benefit through a full-scale financial analysis that could be challenged in court.

-- Requiring that eminent domain not be used for a solely fiscal purpose and that it instead must be part of a comprehensive land use plan.

-- Requiring that the affected neighborhood have adequate participation in the planning process, a right that would be backed up by state-provided technical assistance upon the neighborhood's request.

I think these are pretty good guidelines that appear to be blown off by too many jurisdictions. The point is the need for requirements that:

(1) the government should demonstrate the public benefit for construction projects, land dispositions, tax abatements, eminent domain actions, and alley closures

(2) through a full-scale financial analysis that must be independent, not a bag job (e.g. unlike the justification for the original urban renewal program passed by legislation for the Union Market district or the current process for redevelopment at RFK Stadium, also passed by legislation--both initiatives from the same legislator by the way)

(3) with a legal process, both administratively and through the court system, to challenge the determination.

Another way to think about extending these guidelines from eminent domain actions to local government "undertakings" that involve significant public resources.  "Undertakings" is the term used in the National Historic Preservation Act, which requires that projects involving federal monies ("undertakings") must conduct a review with an aim to protect historic preservation resources that may be impacted.

From the Cornell Law School Legal Information Institutewebsite:

§ 137.289 What is a Federal undertaking under NHPA?

The Advisory Council on Historic Preservation has defined a Federal undertaking in 36 CFR 800.16(y) as a project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including those carried out by or on behalf of a Federal agency; those carried out with Federal financial assistance; those requiring a Federal permit, license or approval; and those subject to State or local regulation administered pursuant to a delegation or approval by a Federal agency.

How I would define local government undertakings for the purposes of capital asset planning, budgeting, and management:

a Local Government undertaking is a project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a local government agency, including those carried out by or on behalf of the local government or those projects carried out with significant financial assistance (payments, land, tax incentives, tax abatements, etc.); or those requiring extra-normal approvals (e.g., a casino).