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Capital Planning

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  1. Capital Planning The (sort of) Definitive Guide (in some ways… possibly)

  2. Capital Planning • Budgeting • Capital Equipment Planning • Capital Improvement Planning • Capital Maintenance Planning

  3. Capital Planning • Goals • outcomes • Priorities • sense of urgency • Costs • to do the thing • to NOT do the thing • Timeframes • Funding Sources • construction or acquisition • operation and maintenance • sustainability

  4. Equipment • Basic Rolling stock (cars, trucks, graders, loaders) • Specialized Rolling Stock (mowers, sweepers, rollers, excavators, big sewer sucker-outer vacuums) • Attachments and Accessories (cop cars, plow blades, tool boxes, electronic mounts, etc.) • often included with the value of the base piece of equipment • Large Stand Alone Equipment (generators, air compressors, speed trailers) • Set a minimum value or special category qualification standard • put it in a policy statement

  5. Equipment • How much stuff ya got? • When d’yagotta replace it? • What’s it gonna cost to replace it? • How yagonna pay for it?

  6. Equipment • Useful Life Measurement • miles, hours, years, wag • what has been used • what is left • Cost per Unit of Useful Life Measurement • cents per mile, cents/dollars per hour, dollars per year • calculate what has been used – (establish funding) • calculate how much remains to be funded • estimate budget basis and need • Set It Aside • Capital Equipment Revolving Fund • Equipment Internal Service Fund

  7. What is a Capital Improvement Plan? • A tool to help identify and set goals. • A tool to help identify, allocate and prioritize limited resources. • A plan to help your City achieve your goals.

  8. What is a Capital Improvement Plan? • Infrastructure Assets • streets, bridges, curbs & gutter, sidewalks • water wells, towers, mains, treatment facilities • sewer treatment facilities, mains, lift stations • parks and recreational facilities • subdivision developments, redevelopments • major buildings and building improvements • economic development projects

  9. What is a Capital Improvement Plan? • Plan Component/Project Characteristics • use of the asset • infrastructure • useful life of the improvement • more than “X” years (suggestion: 10) • cost of the improvement • more than $ “Y” (minimum range from $ 25,000 to $ 250,000) • source of funding • maximizing uses of funding streams • complexity of the improvement

  10. What is NOT a Capital Improvement Plan? • What is NOT in a CIP? • vehicles and large equipment • computer and technology equipment • operational equipment or furnishings • items that should be funded from ongoing operations • There are always exceptions. • There are always situations unique to your community.

  11. Who should be involved in the Plan? • City Council • City Clerk/Administrator/Manager • Public Works Department • City Engineer • On staff • Consultant • Parks Department • Finance Officer/Director/Treasurer • Other Enterprise Funds who may have a stake

  12. Why should we go to all this work? • Legal requirements • Responsible Financial Management • Best use of limited resources • Spread the burden of funding • Caring for the public assets • General Public Safety • Quality of Life in Your Community

  13. How do we assemble a Capital Improvement Plan? • Identify Projects • Determine Cost • Identify Funding Sources • What are they? • How much can they contribute? • Prioritize projects …and then a miracle occurs…

  14. Process • What time period will the CIP cover? • 5 years at a minimum • 2015 – 2019

  15. Process • Street reconstructions w/Utility replacements • Obama Avenue • Boehner Boulevard • Schroeder Court Neighborhood • Gwynn Parkway Reconstruction • Pavement mill and overlay projects • Landeen Road • Daniel Drive

  16. Process • Water tower repaint • Park shelter in Kasmerczyk Park • Baseball backstops at Bush League Field • New Sidewalks connecting Public Buildings

  17. Process • What is each one of these projects going to cost? • Staff • Consulting Engineer • Financial Consultant • Inflation Factors • Market Factors • Costs should be updated annually

  18. Process • Street Reconstructions • Assessments • Property Tax • MSA • Other Dedicated Sources • Utility Replacements • Utility Funds • Pavement Mill & Overlay • Property Tax • Other Dedicated Sources

  19. Process • Water Tower Repaint • Utility Funds • Park Shelter and Baseball Backstops • Other Dedicated Funds • Property Tax • Regular levy • Voter Approved Levy • New Sidewalks • Property Tax • Assessments • Other Dedicated Sources

  20. Process • Other Dedicated Sources • Franchise Fee • Enterprise Fund Transfers • Fund Appropriations • Windfall Receipts • Bond Proceeds • Improvement Bonds require 5 year Capital Plan • Limit of 3 years to spend bond proceeds • Keep repayment period as short as possible (10 years) • Subject to Reverse Referendum • Identify Repayment Source

  21. Process • Financing Sources • How much funding can each sources provide? • How much are you willing to raise taxes, utility rates, assessments and other sources? • How much can you take from a source without interfering with fund operations?

  22. Process • Setting Priorities (not necessarily in order of importance) • mandates • potential liabilities • cost/benefit considerations • public opinion • system condition • provision of service • effect on other services • There is no hard and fast system or formula for setting priorities. Sometimes you just have to make the best decision you can with the available information.

  23. Process • Things we didn’t talk about: • cash flow charting • reserve levels • bonds and advance funding • phasing of projects • inflation & market factors • rate adjustments • Again, there are always things that are unique to your community.

  24. Implementation • Annual Budget Process • Include that year’s plans in the expenditures planned for the funds providing money to the project • Assure that utility rates will generate enough cash flow to do the projects (or to pay the debt issue to finance the project). • Ongoing work will include feasibility studies, plan approvals, bid specifications and bid approvals, payment authorizations and final project approval and closeout.

  25. Maintenance • Annual Review • Do we still have the same project priorities? • Update the costs, including scope of the project. • Are the cash flow projections on target? • Are they higher than expected? • Are they lower than expected? • Celebrate Your Successes !!

  26. It's just too much work! • What might be the consequences of just not doing it or not doing it well? • emergency expenses • interruption of services • sticker shock of having to do a project • community understanding of where their money goes • So, the advantages are… • Control of expenditures • Control of rates • Consistency in planning • Continuity of services • Contentment in the City Council and Community

  27. Questions…