Capital Improvement Program
How to Develop a Capital Improvement Plan
A capital improvement plan is an outline used by municipalities or government organizations to designate the financing and prioritizing of upcoming improvement projects. Capital improvement plans are used to detail community renovations or improvements and plan out finances for equipment and materials and dates for projects to be started and completed. Here are some guidelines on how to develop a capital improvement plan.
Accepting Project Proposals
Establish a planning committee.Create a committee of representatives of the major departments or local government organizations that will be involved in carrying out and funding the projects outlined in the capital improvement plan. This committee is usually comprised of members of city planning and budgeting departments and municipal representatives.
- One member of the committee should be designated as the planning manager. This person will organize and direct the efforts of the other committee members and consultants.
- You may also want to include some engineering consultants to assist with providing cost estimates and estimating the feasibility of construction projects.
Ask for project submissions.Local agencies and departments should be invited to present proposals for capital improvement projects. Capital improvement projects are any public improvements requiring large, one-time expenditures, like the renovation of a public park or building. Proposals for projects should include a justification for the project, a description of the project, estimates of the initial and maintenance costs, and suggest sources of funding.
- These projects usually include repairs to municipal buildings, parks and pools and improvements or new additions to schools, public places, city streets, and local government buildings.
- The planning committee can create a standardized proposal form to make sure each proposal is submitted in the proper format and contains all required information.
Reassess existing projects.The committee should also investigate capital improvement projects that have already been completed and those that are currently underway. This includes discontinued or abandoned projects. Look at those projects that have been completed or abandoned and check if there are additional funds leftover that can be applied towards new projects. In addition, check on the status of projects currently underway and assess whether or not further financing is required. If so, some of the proposed funding for the new capital improvement plan may have to be redirected towards these projects.
List the submitted capital projects or purchases.Draft a list of capital projects or purchases to be discussed and prioritized by the committee. These should include ongoing projects from previous plans and submissions received for new projects. The final projects will be selected and prioritized later in the capital improvement plan development process.
Selecting Capital Improvement Projects
Evaluate available finances.These are the funds that a municipality can draw from for renovations and local improvement projects, including those listed in the plan. Each project's planned completion date will depend on when the project costs can be allotted from the municipality's assets. Gather the town or county's treasurer, accountant, and/or whoever is in charge of local government finances. With their help, the committee can calculate the funds currently available for capital improvement and those funds that will become available over the life of the plan.
- The future assets of the municipality should be calculated using projections of current trends in revenues, expenditures, and debt payments.
Calculate the estimated costs for each project.Each project must be assigned a value to be included in the capital improvement plan. This figure will include costs for material, equipment and labor. This value will determine the year the project will be completed and how much of the municipality's budget is allotted to it. In addition, the committee should consider future maintenance, operational, or staffing costs involved with the project.
Review submitted projects for potential impact.Projects should be examined by committee members and scored using a set of pre-defined criteria. These criteria will assist the committee in choosing the projects most relevant to the well-being of the municipality's citizens. Some relevant criteria might be:
- How well the projects contributes to the health or safety of residents.
- If the project fulfills a need.
- If the project is legal under local, state, and federal laws.
- If the project is in line with other governmental goals.
- How much of the community the project will help.
- How much the project is desired by the public.
Prioritize projects.Assign the list of capital projects in order of completion based on the needed funds, the urgency of the project, and the project's scores according to the committee's criteria. For example, repairs to dangerous roads or hazardous buildings in the community will be prioritized first in the interest of public safety.
- Strategically spread out large projects throughout the plan's time frame. This will avoid unnecessary strain on the municipal budget. It will also allow for time to alert the public about construction or road closures.
Preparing the Capital Improvement Plan
Plan funding.Outline the allotment of capital assets and public funding according to the prioritized list of projects. The plan should include the source of the funding as well, whether it is from a government grant or from the municipality's own funds. Be sure to include any donations or funding from local charitable organizations being used to fund public projects.
Outline project timeline.The project timeline will show project progress goals and allotted project expenditures for each year of the plan. This should also include a summary of where the financing for each project is coming from. This timeline may or may not also require reauthorization by the local government for future years.
- The entire amount of a project's initial construction costs should be allotted to the starting year, even if the construction takes longer than one year. Funds still unspent after the first year are carried over to the next year but are not then made available to other projects.
Include other project-related documents.For the purpose of explaining each project more clearly, especially to residents, the capital improvement plan should include additional explanatory documents or exhibits for each project. These can include photos, maps, graphs, digital renderings, blueprints, or other representations of the project. In addition, a simplified timeline may be presented to give a clearer idea of the project's major milestones.
Present the plan at a city meeting.Explain the finalized capital improvement plan and budget at an open town meeting or city council meeting that is open to the public to review improvement plans with residents. Allow them to ask questions or voice concerns. This gives residents an opportunity to be aware of future developments in their community.
Adopt the capital improvement plan.The committee should review the CIP one more time, taking into account any common resident complaints or suggestions. Go over each included project again to assess how well it meets the criteria established by the committee. Once this is done, the committee should vote to finalize the plan and formally adopt it.
Video: Capital Improvement Plan
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