Marc Elrich Releases Recommended FY 23 Capital Budget and Recommended FY23-28 Capital Improvement Program Totaling $5.1 Billion

For Immediate Release: Tuesday, January 18, 2022

Montgomery County Exceeds $5 Billion Over Six-Years in Recommended Capital Investments in Education, Public Transportation, Affordable Housing, Economic Development and Efforts to Combat Climate Change

Today, Montgomery County Executive Marc Elrich transmitted his $5.05 billion Recommended FY 23 Capital Budget and FY23-28 Capital Improvement Program (CIP) to the Montgomery County Council. The County Executive’s funding recommendations will address major capital needs of Montgomery County over the next six years. This is County Executive Elrich’s second full CIP and is over $740 million more than the prior approved FY2021-26 CIP budget, a 17.2 percent increase. To see the complete recommended FY23 Capital Budget and amended FY23-28 Capital Improvements Program, click this link: https://www.montgomerycountymd.gov/omb/publications.html.

“As I release my second full CIP, I am proud of my administration’s achievements which now allow us to leverage more State Aid for school construction, to address climate change, and to promote economic development through substantial transportation investments,” said County Executive Elrich. “With increased investments in our schools, affordable housing, early care centers for our youngest children, facilities to address barriers to residents’ well-being, and maintenance of core infrastructure, this CIP strengthens the resiliency of County government, our local economy, and the residents we serve. Central to these efforts is our partnership with the County Council to advance racial equity, social justice, and climate change in the County.”

CIP Recommendations Highlights Include:

  • Total capital investments exceed $5 billion over the six-year period – $740 million over the prior CIP
  • $1.8 billion for Montgomery County Public Schools (MCPS) capital projects over the six-year period
    • $55 million more than was requested by the Board of Education
    • Record amount of funding for schools if approved
    • $327.1 million for Montgomery College projects
    • 1 percent increase over the prior budget
    • Initial funding for new Montgomery College East County Campus
  • $408.4 million for Bus Rapid Transit
    • $394 million for Bus Rapid Transit (BRT) projects along MD355 and Veirs Mill Road
    • Construction of BRT Route along MD355 from Rockville to Germantown to extend fast, high-capacity transit for communities not served by Metrorail, with additional funding for designing the remaining portions (Rockville to Bethesda and Germantown to Clarksburg)
  • $146.3 million for affordable housing projects
    • $132 million for affordable housing acquisition and preservation investments over the next six years – $22 million each year
    • In conjunction with a $14.8 million supplemental – $36 million will be available over the next 18 months to support affordable housing projects
    • $20 million for the Affordable Housing Opportunity Fund – a $6 million increase
    • $8.2 million to support Housing Opportunities Commission projects
    • A new Affordable Living Quarters project to provide permanent, affordable housing to very low-income households
  • White Oak and White Flint Redevelopment public-private partnerships.

Equity Lens Prioritization

This is the first full Montgomery County CIP Budget recommendations developed under an equity lens framework. The amended FY2021-26 CIP budget prioritized projects serving the Washington Council of Government’s Equity Emphasis Areas and sought to limit negative impacts of fiscal delays or reductions on projects serving Equity Emphasis Areas. This budget also considered population demographics that tend to be served by different types of facilities and was assisted by a CIP budget equity tool, manual, and training materials for staff to make sure that racial equity considerations are incorporated in each step of the budget development process.

Key Investments to Combat Climate Change

The County Executive’s recommended CIP includes $1.29 billion in spending on projects that help address climate change, adding $653 million in funding for new projects or expansions of existing projects that reduce the County’s greenhouse gas footprint, increase climate resilience, and/or make necessary adaptations to changing climate conditions.

Climate-related spending in the CIP includes:

  • $655 million in mass transit improvements to reduce the climate impact of transportation in the County, including $408 million for bus rapid transit planning and implementation and $152 million to begin to transition Ride On to a zero-emission fleet;
  • $268 million for pedestrian and bicycle transportation facilities to encourage active modes of transportation and reduce short-distance car trips;
  • $176 million to fund maintenance projects that increase the energy efficiency of county government, MCPS, Montgomery College, and M-NCPPC facilities through building envelope repair and replacement of obsolete mechanical and electrical systems;
  • $12.5 million in added funding for building construction projects to help achieve net zero energy use in new or renovated facilities, including Holiday Park Senior Center, White Flint Fire Station, and 6th District Police Station, and $4.4 million to achieve near net zero energy use at the Kennedy Shriver Aquatic Center;
  • $171 million for projects that maintain and improve the County’s resilience to extreme weather through stormwater management and maintenance and rehabilitation of waterways.

Historic Investments in Education

“The foundation for our future successes in Montgomery County is grounded in providing all of our children, no matter where they live in the County, a world-class education from Pre-K to higher education,” said Elrich. “We are thankful for the collaborative partnerships we have with MCPS, Montgomery College, our daycare providers and nonprofits supporting our students’ families. And we are grateful for the hard work of our representatives in the State delegations for their advocacy and success in helping us secure more funding. If approved, this budget would be the largest MCPS CIP ever – something that we can all be proud of. ”

MCPS

As noted, the recommended MCPS CIP budget is more than $1.822 billion, which, if approved, will be the largest MCPS CIP ever. The recommended MCPS CIP is 103.1 percent of the Board of Education’s original requested CIP due to the inclusion of prevailing wage construction costs needed to achieve maximum State Aid contributions. The MCPS CIP request was $1.767 billion, $148.3 million or 9.2 percent above the previously approved budget with a $385 million increase in the first four years of the CIP. The request included significant cost increases in construction due to an unparalleled increase in material costs, disruptions in supply chain, and labor shortages due to the COVID-19 pandemic.

This request proposed the construction or renovation of fifteen elementary schools, five middle schools, and eight high schools and included increased investments in HVAC and Roof Replacements while preserving substantial investment in the Planned Life Cycle Asset Replacement, ADA Compliance, and other existing facility infrastructure projects.  Early Childhood Center, Emergency Replacement of Major Building Components, Materials Management Building Relocation, and Sustainability Initiative new projects were also included in the submission. To maximize future State Aid funding and improve transparency in our capital budgeting, County Executive Elrich is recommending the creation of a new Built to Learn Act State Aid Match project with $58,750,000 in FY25 to FY28 funding. The purpose of this project would be to hold fiscal capacity for MCPS future projects for the express purpose of supporting projects that are eligible for State Aid.

Montgomery College

The Recommended Montgomery College budget is $327.1 million – a $42.9 million, or a 15.1 percent, increase over the previous CIP.  Included in the Recommended CIP is $500,000 to support development of a new East County College Campus.  Initial funding will cover facility planning, site evaluation, and other preliminary costs needed to ultimately establish a fourth campus.

Early Care and Other Education Related Initiatives

Funding for a new Early Childhood Center ($16 million) is included in the MCPS CIP request.  This project will provide funding for a permanent home for prekindergarten literacy, mathematics, and social/emotional skill development services on the Watkins Mill High School campus for children and families affected by poverty. Planning funds to further expand early childhood centers throughout the County are also included in the project funding request. Funding is also recommended to add both a School Based Health Center and a Linkages to Learning Center at the JoAnn Leleck Elementary School – a school that has more than 81 percent of its students participating in the Free and Reduced-Price Meals program.

Funding for projects at the Odessa Shannon Middle School, Silver Spring International Middle School, Gaithersburg Elementary School #8, Neelsville Middle School, and South Lake Elementary School has also been adjusted to reflect the latest cost estimates. These schools are all located in Equity Emphasis Areas, reflect high concentrations of African American and Hispanic children, and/or have high percentages of students participating in the Free and Reduced Meals program.

Climate-friendly and Safer Transportation Investments

“One of the biggest accomplishments last year was launching our Climate Action Plan with the clear goal of reducing 100 percent of carbon emissions in Montgomery County by 2035,” said Elrich. “Our investments reflect our priorities and combatting climate change is essential to ensuring Montgomery County safety and resiliency as we face this existential threat. Investments in public transit programs, such as our Bus Rapid Transit system, help address transportation carbon emissions – one of the main drivers in causing climate change. I want to thank our federal and state delegations for their assistance with state and federal funding. Following the successful implementation of the FLASH on US29, this CIP will begin construction on the MD355 and Veirs Mill Road BRT routes. We are also continuing to transition toward a Ride On Bus Fleet that is 100 percent zero emissions. And we will continue to invest and support our Vision Zero efforts to increase safety and reduce pedestrian, bicycle, and automobile accidents and injuries. All of these investments protect the safety of our commuters, bikers, and communities as well as our environment.”

Bus Rapid Transit and Other Mass Transit Investments

The Recommended CIP includes more than $394 million in funding for Bus Rapid Transit (BRT) projects along Maryland Routes 355 and 586 (Veirs Mill Road) using identified state and federal aid opportunities to support final design, land acquisition, and construction.  As part of this CIP, I am recommending that the MD355 BRT project be funded for construction between Rockville and Germantown, terminating at the Montgomery College campuses at either end and extending fast, high-capacity transit service to residents and businesses along this corridor that is not currently served by Metrorail.  I am also recommending funding construction of the Veirs Mill Road BRT connecting to MD 355 at Montgomery College.  These projects will achieve an unprecedented expansion of the County’s transit network to provide rapid transit service from Wheaton to Germantown and are consistent with priority recommendations in the draft Corridor Forward plan for I-270.

County Executive Elrich is also recommending that Montgomery County accelerates and funds construction of the Bicycle-Pedestrian Priority Area Improvement Priority Project improvements along Veirs Mill and Randolph roads in conjunction with the Veirs Mill BRT project.  By linking these two projects, the County can submit both as part of our Federal Small Starts grant application, further leveraging the County and State funding commitments. These improvements support safe walking and biking, which is critical to accessing improved transit services.

BRT service on these corridors will alleviate traffic congestion, reduce carbon emissions, stimulate economic growth, and provide more frequent and reliable transit service to some of the County’s most racially and economically diverse communities where structural barriers have created a heavy reliance on public transit to get to work, school, and important services. The intent is to complete the entire MD355 corridor as soon as possible, so I am also including design funding for the MD355 BRT between Rockville and Bethesda and Germantown and Clarksburg so that the entire project is ready to proceed as soon as we have a viable funding strategy for the remaining portions of the corridor.

In addition to continuing planning for New Hampshire Avenue BRT and the North Bethesda Transitway, my recommended capital budget expands funding for the Bus Priority Program. This program identifies and implements low-cost but high-impact initiatives, such as painted bus lanes and signal priority projects, to improve service on all bus routes in the County.

This budget also supports the transition to a zero emissions Ride On bus fleet, recommending over $40 million across FY23-24 for the purchase of electric buses to fully utilize the power generation capacity of the Silver Spring bus depot solar microgrid. By 2025, Ride On will have 70 electric buses in service, positioning the County as both a regional and national leader on the path to zero emissions transit. To that end, my budget also funds a study that will develop a transition plan to a full zero emissions fleet within fiscal and operational constraints.

Vision Zero

The Recommended CIP includes $433.0 million to support the County’s Vision Zero initiative with related projects included in the Transportation, Maryland National Capital Park and Planning Commission, and Montgomery County Public Schools portions of the CIP. Recommended enhancement funding will support:

  • A new Sandy Spring Bikeway project;
  • A new Tuckerman Lane Sidewalks project to improve safety around Herbert Hoover Middle School and Winston Churchill High School;
  • A new US29 Pedestrian and Bicycle Improvements project to improve access to FLASH transit stations;
  • The addition of the Central and Eastern sectors of the Bicycle-Pedestrian Priority Improvements subprojects for Veirs Mill Road and the Wheaton Central Business District;
  • Increased funding for Safe Routes to School improvements and sidewalk and curb replacement;
  • Community requested scope changes for the Dale Drive Shared Use Path and Fenton Street Cycletrack projects; and
  • FY27 and FY28 funding for ADA, guardrail, traffic signals, neighborhood traffic calming, minor bikeway projects, intersection and spot improvements, street lighting, bus stop improvements, and improved access to schools, parks, and trails.

Investments to Combat Climate Change

“The County continues its role as a leader in the fight to address climate change through environmentally friendly construction practices, progressing from past capital improvement programs that funded basic energy efficiency improvements, to achieving LEED Silver certification, to International Green Construction Code compliance for all new construction, to the current policy of net zero energy use where feasible for all new facilities and major renovations,” said Elrich. “In addition to our direct efforts to reduce the County’s carbon footprint through new net zero facilities and the replacement of obsolete building systems, every County building construction or renovation project considers climate impact at all stages of planning, design, and construction, from locating buildings near public transit to efficient design standards to sourcing materials with the lowest possible environmental impacts.”

Energy Efficiency Initiatives

This recommended budget will enable the Department of General Services to make design adjustments to achieve a Net Zero status for the 6th District Police Station, the White Flint Fire Station, and the Holiday Park Senior Center. The Kennedy Shriver Aquatic Center renovation will also achieve near Net Zero energy use. Additional investments in HVAC and electrical system replacements will also allow the County to use more energy efficient mechanical equipment in County buildings. These activities supplement MCDOT’s work to issue a Request for Proposals for solar generation installations on the rooftops of several parking garages in the Silver Spring Parking Lot District with implementation within the next two years. Additionally, DGS will continue to pursue alternative capital investment through Power Purchase Agreements to expand the deployment of renewable energy systems and microgrids to improve resilience and reduce the Greenhouse Gas Emissions of our facilities.

Stormwater Management

The Department of Environmental Protection and the Maryland-National Capital Park and Planning Commission have established a partnership to implement stream protection projects that help meet the State’s MS-4 (or Municipal Separate Storm Sewer System) permit requirements to improve water quality in the County. Due to the success of the initial projects M-NCPPC has implemented, the Department of Environmental Protection will be shifting approximately $8.8 million more to M-NCPPC in the FY23-28 CIP for additional permit-related projects. The CIP stormwater management budget also includes a continued focus on replacing stormwater infrastructure such as failing culverts and addressing drainage assistance requests to improve preparedness for flooding events.

Recycling & Resource Management

County Executive Elrich’s recommended CIP continues funding for the Full Upgrade of the Recycling Center Complex project which will increase the County’s processing capacity to handle 100 percent of the recyclable material residents and businesses generate with room for future growth.  The County currently sends 40 to 45 percent of its recyclable material out of the State for processing which generates greenhouse gas emissions.  Upon completion of the project, transporting recyclable materials will cease and the County will have the potential to increase the kinds of materials the County can recycle. The Department of Environmental Protection will be receiving responses to a Request for Information (RFI) from commercial entities that may provide updated technologies that could enhance recycling and waste disposition. Upon review of the responses to the RFI, any appropriate modifications to the design of this upgrade will be made. The project is scheduled to start construction in the coming year and is an important component of our plans to eventually close the Dickerson incinerator.

Investments to Create and Maintain More Affordable Housing Units

“Too many Montgomery County residents cannot afford to live in this County – and that is a reality that we should not accept and need to immediately address,” said Elrich. “The Recommended CIP will continue my practice of budgeting $22 million a year, totaling $132 million from FY23-28, for Affordable Housing Acquisition and Preservation investments. With a $14.8 million FY22 supplemental, more than $36 million will be available during the next 18 months to support affordable housing projects. Creating more affordable housing while not losing our existing affordable units, is one of my biggest priorities that needs to be addressed with a great sense of urgency. I am pleased that this proposed budget is aggressively addressing this challenge.”

Affordable Living Quarters

The Department of Housing and Community Affairs (DHCA) has been awarded $7.3 million of Federal HOME funds. With planning funding, DGS, HHS, and DHCA will consider available buildings to purchase and renovate to best meet low-income households’ needs for permanent Affordable Living Quarters. Once a suitable building has been found, additional appropriation will be requested to complete the project – moving us closer to our shared goal of increasing the supply of affordable housing to prevent homelessness and provide stable housing for our lowest income residents. An FY22 supplemental will be requested to fund initial planning and site selection work with additional funds requested once a site has been found.

Affordable Housing Opportunity Fund

The County Executive’s new Affordable Housing Opportunity Fund project, that was approved last May by the County Council, will provide short-term financing for affordable housing projects. The County Executive is recommending increasing this fund by $6 million to $20 million. By the end of March 2022, DHCA will complete the process of contracting with a Community Development Financial Institution to manage the offering of the initially appropriated $14 million funding.

Housing Opportunities Commission (HOC)

The Recommended CIP also continues to provide $7.5 million for needed HOC unit maintenance. Critical funding has also been included for the Housing Opportunities Commission’s WSSC Sewer and Storm Line Improvements at Elizabeth Square project.

Expanding Broadband in Affordable Housing

The ultraMontgomery project uses CIP funding to support the County’s economic development and digital equity initiatives. In the FY23-28 CIP, the ultraMontgomery project assumes that the County will receive additional U.S. Treasury Infrastructure funding provided to the State of Maryland to support expanding broadband infrastructure to 8,000 units in affordable housing developments. These efforts are important to making reliable internet access readily available to low-income residents.

Job-creating Investments and Efforts

“After a record setting year of private investments in Montgomery County businesses, we are seeing big wins of companies expanding and relocating to Montgomery County,” said Elrich. “These successes are creating jobs and are beginning to turn around decades of job losses. Our County is very fortunate to be an epicenter of the life sciences, biohealth, and hospitality industries while being the home to Fortune 500 companies and strong and diverse small business communities. Our investments in this recommended budget will help create infrastructure improvements and ensure the highly educated and trained workforce our companies need to succeed while also creating more job opportunities.”

White Flint/North Bethesda Redevelopment

Jones Lang LaSalle has recently completed a market and feasibility study that supports the concept of a life science anchored development as the most economically feasible use for the WMATA-owned property at the White Flint (soon to be North Bethesda) Metro station in the current economic environment. That property, at the heart of the White Flint/North Bethesda area, addresses the current demand for life science development in this region. The County is working with WMATA to determine what specific infrastructure and other support would provide the impetus to spur this near-term life science development which is expected to support other private development in the area. Additionally, and consistent with requests from the community and the County Council, this recommended CIP budget will be moving the costs of White Flint Redevelopment coordination out of the capital budget into the General Fund operating budget.

White Oak Redevelopment

The County Executive’s recommended CIP maintains the County’s $40 million commitment to fund a portion of the development’s required road construction costs. With master plan, sketch plan and preliminary plan approvals and designation as a tax-favored opportunity zone, the private developer of Viva White Oak appears well positioned to begin implementing the plan’s vision for approximately seven million square feet of commercial development as a life sciences hub with up to 5,000 residential units. Building upon the success of the Route 29 FLASH BRT service and planning for an East County Montgomery County College campus, White Oak Redevelopment is poised to move forward and achieve the County Executive’s goal of significantly spurring private development in Eastern Montgomery County.

Crossvines

The Recommended CIP also maintains funding for the Crossvines wine-crush and event facility. Once completed, Crossvines will support the County’s long-range plan for economic and agricultural development, agritourism, education, and workforce development.

Life Sciences Lab Space

A Life Sciences and Technology Center supplemental will also be transmitted separately to convert excess Germantown Innovation Center office space to lab space to meet the demand of small life science companies because updated cost estimates exceed the previously approved budget.

ultraMontgomery Broadband Projects

The ultraMontgomery project has completed a public-private partnership to expand shortest route, lowest latency, ultra-high speed broadband routes under the Potomac River to connect the Great Seneca Science Corridor and Bethesda to data centers in Ashburn, Virginia. Ninety percent of East Coast internet traffic is eventually routed through Ashburn, Virginia data centers. This direct fiber route is vital to supporting work by high tech companies and research institutions in Montgomery County. Work is also underway to complete regional connections to Howard County and expand connections to Prince George’s County.

Creative Reuse of County Property

“Over the last three years, my administration has been actively exploring ways to maximize the value of County property,” said Elrich. “My Recommended CIP includes funding to redevelop the site of the current Montgomery County Detention Center (MCDC) and the former 1st District Police Station to provide a new Restoration Center to take care of those dealing with mental illness and substance misuse, and a new Criminal Justice Center (CJC), that will replace our current correctional complex with a newer and more cost-effective facility. Additionally, after completion of the Restoration Center and the CJC, funds are included to move forward with relocating the MCPS Crabbs Branch Bus Depot, which will allow smart growth development at the Shady Grove Metro.”

Restoration Center

Currently, residents with mental illness or substance abuse problems are being inappropriately incarcerated or sent to emergency rooms when crisis stabilization and appropriate warm handoffs to community-based services would be more effective. This can be particularly critical for residents of color and low-income residents who face barriers in accessing care. To prevent inappropriate, unnecessary incarceration, the Restoration Center will operate 24/7/365 to provide alternative crisis stabilization services under the Crisis Now model while also serving other residents with mental health and substance abuse issues. The Department of Health and Human Services will be aggressively pursuing State Aid for construction costs and Medicaid reimbursement and private partner participation to reduce the net operating budget impact of the Restoration Center.

Criminal Justice Complex

The new CJC will replace the sprawling, deteriorating MCDC complex which has outlived its useful life and is extremely expensive to maintain. The new CJC will house Central Processing/Detention, District Court Commissioners, Department of Health and Human Services Mental Health Assessment and Placement Unit; Pre-Trial Services Assessment Unit; Public Defenders Unit; and the Police Warrants and Fugitive Unit in a smaller, more efficient building.

MCPS Crabbs Branch Bus Depot Replacement

Since at least 2012, the County has struggled to find an appropriate site to replace the MCPS Crabbs Branch Bus Depot to realize the Shady Grove Sector plan’s transit-oriented development vision.  With this CIP, a site is finally identified, and this site is already owned by the County and is well-located and appropriate for MCPS’ fleet operations. This project cannot proceed until the Restoration Center and CJC project are completed so funding for this project is not expected to occur until after FY28; this will remove a barrier to creating transit-oriented housing near the Shady Grove metro station.

Investments in Maryland-National Capital Park and Planning Commission (M-NCPPC) and Washington Suburban Sanitary Commission (WSSC):

M-NCPPC

The County Executive’s Recommended CIP includes $254.5 million in six-year funding – a $14.9 million, or 6.2 percent increase over the prior approved CIP.  The recommend CIP increases M-NCPPC’s Stream Protection: SVP project to $14.5 million, an $8.8 million increase, to improve water quality in the County. While not included in this CIP submission, the County Executive remains committed to working closely with M-NCPPC to redevelop the historic Bethesda property known as the Farm Women’s Market and to include the Bethesda Parking Lot District’s Lot 24 and Lot 10 with this redevelopment. The existing Farm Women’s Market will be renovated, and the redevelopment will include new housing, retail space, outdoor park space, and underground parking.

WSSC

County Executive Erlich’s recommended CIP budget fully funds the WSSC’s $2.093 billion FY23-28 CIP request.  This represents a $347.7 million, or 19.9 percent, increase above the FY22-27 approved total of $1.745 billion.

General Obligation Bonds

The recommended CIP assumes a $170.1 million General Obligation bond set-aside to cover unanticipated cost increases or revenue shortfalls. Due to construction market pressures, the FY23 and FY24 set asides are slightly larger than usual at approximately $15 and $20 million, respectively. New short- and long-term financing will average approximately $39 million a year – representing a six-year increase of approximately $29 million compared to the prior approved six-year period. This increase is primarily due to investments in County radio life-cycle replacement partially offset by reductions in other financing.

“I want to thank our Office of Management and Budget along with all of our departments who worked very hard on this budget recommendation,” said Elrich. “I also appreciate the members of the Board of Education, the Montgomery College Trustees, the Planning Board, and WSSC Water and HOC Commissioners for their contributions. I look forward to working with the County Council as we provide further recommendations relating to current revenue and other CIP initiatives that will be provided once I have finalized my FY23 Operating Budget recommendations, which will be transmitted on March 15.”

The CIP, which by law, is required to be presented to the County Council every other year on Jan. 15, or the next business day on years where the 15th is on a weekend or holiday. Only amendments to the CIP are presented in alternate years.

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