TO: Mayor and City Council
FROM: Finance Committee of the Salem City Council and the Urban Renewal Agency of the City of Salem
SUBJECT:
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Resolution Updating Council Policy No. C-9 for the Capital Improvement Program
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Natural Environment Stewardship; Safe Community; Safe, Reliable and Efficient Infrastructure; Strong and Diverse Economy; Welcoming and Livable Community.
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SUMMARY:
summary
At their May 7, 2025 meeting, the City of Salem Budget Committee recommended to City Council an update to Council Policy No. C-9 for the Capital Improvement Program (CIP) that would require staff to analyze and report on the City’s organizational capacity to fund future maintenance of projects proposed added to the CIP. The attached updated version of Council Policy No. C-9 would implement that recommendation. At their November 17, 2025 meeting, the Finance Committee supported the Budget Committee’s recommendation for City Council Adoption.
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ISSUE:
Shall City Council adopt Resolution No. 2026-1 to update Council policy No. C-9?
RECOMMENDATION:
recommendation
Adopt Resolution No. 2026-1 to update Council policy No. C-9.
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FACTS AND FINDINGS:
The proposed update to Council Policy No. C-9, Capital Improvement Program Policy adds the following language consistent with the Budget Committee’s recommendation:
Section III.C.1.vi.: Analyze and report on the City’s organizational capacity to fund future maintenance of projects proposed to be added to the CIP.
As the City faces a continued structural deficit in both the General Fund and Transportation Fund, new capital projects have the potential to exacerbate or narrow the growing gap between revenue and expenses. Specifically, projects that add new infrastructure often require new or increased operations and maintenance funding. Conversely, projects that replace or repair existing assets could reduce operation and maintenance requirements. This policy requires staff to calculate and consider those impacts in the CIP scoring process and allows the Budget Committee and City Council to balance those long-term financial impacts when considering approval of the Capital Improvement plan.
BACKGROUND:
The Government Finance Officers Association (GFOA) includes the following note in their recommendations for capital budget presentations:
“Governments should discuss and quantify the operating impact of capital projects. The impacts should be identified on an individual project basis but may be summarized.”
This update would meet the requirements of GFOA’s recommended best practice for capital budgeting.
Council Policy No. C-9 was last updated in March 2024.
James Wharton-Hess
Sr. Fiscal Analyst
Attachments:
1. Resolution No. 2026-1
2. Resolution No. 2026-1, Exhibit A - Updated Council Policy C-9
3. Resolution No. 2026-1, Exhibit B - Updated Council Policy C-9 (Redline)