Capital Improvement Plan
The Capital Improvement Program (CIP) serves as a guide for the efficient and effective provision of public services and facilities. It proposes the development, modernization, or replacement of public physical assets over a multi-year period, arranges these projects based on priorities, and assigns an estimated cost and anticipated method of financing for each project. The CIP represents the City's long-range plan for the development of the City as a schedule of public improvements that identifies present and future needs and priorities.
The CIP touches each city resident and visitor through the provision of health, safety, transportation, recreation, and utility services. As a policy tool, the CIP provides information for groups interested in City growth and development need in order to make investment decisions, and it is a statement of intention for federal and state agencies that provide grants-in-aid to the City. Benefits of the CIP and its development process include:
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Promoting the strategic use of the city's limited financial resources
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Examining and prioritizing the needs of the city, assuring that the most essential improvements are provided first
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Coordinating and consolidates departments' requests, avoiding duplication of projects and equipment
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Identifying the timing, phasing, location, and funding of all capital improvements in a comprehensive manner
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Allowing for sufficient time for investigation of project financing, implementation measures, and proper technical design
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Coordinating physical planning to ensure maximum benefit from available public funds
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Attempting to provide an equitable distribution of public improvements throughout the City
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Providing a basis for formulation of long-term debt programs and a basis for the pursuit of state and federal aid
Process
The development of the CIP plays an important part in the City's budget process. The first year of the CIP provides guidelines for and ultimately reflects the Capital Budget with the following four years becoming the Capital Improvement Program.
Definition of Capital Improvement
In this CIP, capital improvements are defined as physical assets, constructed or purchased, that have a minimum useful life of three years and a minimum cost of $50,000. Normal replacement of vehicles or equipment and normal recurring renovation costing less that $50,000 are not included in the Capital Improvement Program. Examples include:
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New and expanded physical facilities for the community over the $50,000 threshold
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Large-scale rehabilitation or replacement of existing facilities.
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Major pieces of equipment which are costly and have a long expected life
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The cost of engineering or architectural studies and services necessary to plan and complete improvements
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The acquisition of land for a community facility such as a park, highway, sewer line, etc.
The CIP process begins in December when the departments formulate their capital project requests. The departments review their previously submitted requests revising and updating the project description, cost estimates and timing based on current information. This includes new projects, for which departments must estimate costs, suggest a schedule of funding for completion, and identify possible funding alternatives. Additionally, departments must evaluate and give a Category of Expenditures rating to all projects. These ratings help to justify the need for a project, but they are not the sole criteria for determining the funding or scheduling of a project. They serve as a guide for acceptance and/or inclusion of a project. The Categories of Expenditures are:
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Legally mandated
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Eliminates hazards to persons
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Eliminates hazards to property
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Ordered by City Council with or without petition
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Current level of service cannot be continued unless work is done
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Current level of service cannot be assured unless work is done
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Extends life of facility more than five (5) years
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Improves efficiency or generates additional revenue with initial cost being recovered by savings within less than five (5) years.
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Improves efficiency or generates additional revenue with initial cost being recovered by savings within more that five (5) years and less than ten (10) years.
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Expansion of service is deemed necessary
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Needed to implement a new program or activity being requested in the operating budget
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Other as needed
The key role in the initial stages of capital programming falls upon the operating departments. By virtue of their technical knowledge and experience in the individual fields, they initiate project requests formulated in a manner that state the merits of each project and its relative importance in the department's overall program.
Concurrent with the preparation of the CIP requests, the Budget Office and Finance Director collect and analyze the financial information determining the resources available in the coming years. The Budget & Evaluation Manager also aids departments in their preparation of CIP requests.
After the compilation of the CIP requests, the Finance Director, Budget Office, Assistant City Managers, and City Manager review all projects relative to community need and proposed funding. They are evaluated in terms of their priority, urgency and benefit in relation to all other capital projects with the current and projected fiscal resources in mind. This review, along with the knowledge of available funding, forms the basis of the programs recommended by the City Manager to the City Council. The decision on funding for capital projects is based on the merits of a particular project and the available funding from all financing sources.
Upon agreement by the City Council, the CIP is used in the development of the annual operating budget. The first year of the CIP provides guidelines for and ultimately reflects the Capital Budget with the following four years becoming the Capital Improvement Program.
The Capital Budget is incorporated into the City Manager's recommended annual budget that is subsequently reviewed and adopted by the City Council. By agreeing to the Capital Budget, the City Council does not actually commit to expenditures or appropriations. The City Council, during its annual budget review and approval process in May and June, will approve those recommended capital projects it deems appropriate for actual funding.