City staffers told council members at a budget workshop Thursday morning the city's property tax rate must increase to $0.32233 per $100 valuation for fiscal year 2018 to fund capital improvement projects outlined in the proposed city budget. Out of the $22.27 million proposed for capital improvement projects in FY 2018, about $8 million comes from certificates of obligations, which are backed by property taxes, said assistant city engineer Jessie Li. Capital improvement projects are major expenses, often funded through bond sales. Such projects may include land acquisition, construction, rehabilitation, and economic development, according to meeting documents. Sugar Land’s five-year capital improvement plan lists rehabilitation and construction projects pertaining to drainage, streets, wastewater, and parks, according to meeting documents. The city uses multiple funding sources to pay for capital improvement projects, including the tourism fund, general fund, Sugar Land corporation fund, utilities revenues, and donations, budget officer Justin Alderete said. “It’s all mixed together, and from the public’s perspective, it looks like we use the same pot of money to fund everything when in reality, we’re not,” he said. There is a public misconception that cutting certain capital improvement projects would save money and eliminate the need to raise property taxes, Alderete said. However, many of these different funds are restricted and can only be used for certain projects, therefore the money used to fund them cannot be used directly to lower property taxes, he said. “As much as we’d like to use those funds to lower property taxes, we just can’t,” Alderete said. “We’re restricted by the legislature. They tell us, in very specific detail, what it is we can use those funds for.” Staff proposed a budget of $130.55 million for the city’s rolling five-year capital improvement plan for FY 2018-22. About 55 percent, $71.8 million, is paid for with certificates of obligations, said Li. “Most of the funding from these projects we saw today are restricted funds,” Mayor Joe Zimmerman said. “That’s why [these projects are moving] forward because they are from funding sources that aren’t available for doing general fund.” The city has already pushed back several capital improvement projects to save money on expenditures, Zimmerman said.