Capital Fund Sources

Funds for capital projects come from a variety of sources, each having its own set of conditions for use. Generally, the funds fall into three categories: revenue funds, debt funds, and other. Revenue funds are funds available through the city’s revenue collection – cash on hand for that fiscal year (sometimes referred to as PAYGO). Debt funds are generally bonds, or loans borrowed against future revenue streams. Other funds include state and federal grants, private funds, and Local Impact Aid. The City’s Finance Department sets level of available funds for each fiscal year based on best practices for issuing debt. A more detailed description of each of the fund sources in the capital budget is included below.

The FY22 capital budget is made up of a variety of fund sources.

Fund Source Details

General Fund Sources

General Obligation Bonds (GO Bonds) – With voter approval, the City borrows money for specific improvements by selling general obligation (G.O.) bonds. G.O. bonds are debt secured by the full faith and credit of the City, and are presented to voters for approval every two years through questions on the general election ballot. This is a flexible fund source that allows the City to maintain some of its highest priority capital assets and programs, particularly those that aren’t eligible for any other fund source.  Learn more about the GO Bonds issues process by clicking here.

General Funds – Revenue received from various payments to the City, such as property taxes and sale of property. General Funds are mostly used for the operating budget, but Finance allocates a certain amount for PAYGO capital each year.

General Funds (HUR) – Formerly known as Motor Vehicle Revenue (MVR). These funds are State Highway User Revenues allocated by formula. These state funds are restricted to eligible uses, such as transportation projects.

MDOT County Transportation Revenue Bonds – Bonds issued by the Maryland Department of Transportation to be repaid with future General Fund Highway User Revenue.

State and Federal Sources

State Funds – Includes Open Space funds, Waterway Improvement Funds and Economic Development Loans.

Federal Funds – Loans and grants from the Federal Government including CDBG, highway funding and transportation enhancement grants.

Utility Sources

Water and Wastewater Revenue Bonds – Bonds issued by DPW to be repaid with future water, wastewater, and stormwater revenue (water bills).

Utility Funds –Funds from current operating revenues such as water bills and conduit fees.

Other Sources

Other – County Grants, Local Impact Aid, private monies, critical area offset funds, etc.