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Capital Planning

Capital Planning. The (sort of) Definitive Guide (in some ways… possibly). Capital Planning. Budgeting Capital Equipment Planning Capital Improvement Planning Capital Maintenance Planning. Capital Planning. Goals outcomes Priorities sense of urgency Costs t o do the thing

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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…

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