Capital Improvements Planning ND League of Cities March Madness March 7, 2018 Darcie Huwe, Finance Director/Auditor City of Wahpeton

What is a Capital Improvements Plan? A Capital Improvements Plan (CIP) contains all of a local government’s individual capital projects, equipment purchases, and major studies; in conjunction with construction and completion scheduled and in consort with financing plans. The plan provides a working blueprint for sustaining and improving our community’s infrastructure and service delivery equipment.

What are the benefits of developing a Capital Improvements Plan? Synchronizes capital and operating budgets Systematically evaluates competing demands for resources based on a prioritization matrix reflecting the city’s long term goals and objectives Identifies, prioritizes, and optimizes capital project financing: Pay-as-you-go Federal, state & private grants Debt financing (special assessments & revenue bonds) 4. Links strategic and comprehensive plans with fiscal capacity. May be required when applying for State and Federal funding. 5. Informs the public about the city’s investment in infrastructure

Capital Improvements – getting started You may already have several of the basic ingredients of Capital Improvements Planning: Comprehensive Plan Infrastructure Inventory Facility Plans (water & sewer) Pavement Management Plan Equipment Replacement List Your City Engineer can help identify, scope and determine urgency of projects – may already have a lot of info CIP Software - Microsoft Access database www.cipsoftware.com Extensive experience with cities - when you have a question Bill Leskee, the CEO is usually the one who answers it.

What is the process for developing a Capital Improvements Plan? Start with information you have, a spreadsheet inventory of vehicles and key equipment: Add a column to your spreadsheet – TARGET REPLACEMENT DATE

Developing a Capital Improvements Plan Ask the operations personnel to review the list, ensure essential vehicles, tools, pumps, etc. that are critical to service delivery in your community are included with a target replacement date. Add a column to your spreadsheet – JUSTIFICATION “extensive maintenance record”, “mileage exceeds estimated useful life” or “critical failure is imminent” 

Capital Improvements Project Example - Equipment

Capital Improvements Project Example - Maintenance

Capital Improvements Project Example - Infrastructure

Capital Improvements Example – Infrastructure Inventory

How is the Capital Improvements Plan Prioritized? The primary considerations for which projects in what order are focused on the evaluation of consequences of infrastructure failure. Does the failure or inoperability prohibit critical service delivery? Example: failure of the water pipe leaving the water treatment plant would affect all properties in the City from drawing water after the water stored in the water towers had been used. HIGH PRIORITY Does the condition of the infrastructure limit or prohibit daily activities? Does the repair or replacement project meaningfully extend or improve public services? Is the estimated cost of replacement or repair acceptable or should other alternatives be considered?

How is the Capital Improvements Plan Funding Determined? Funding Source Summary:

What is the timeline for adopting a Capital Improvements Plan? Example at www.wahpeton.com click on the Capital Improvements Planning tab

How is the Capital Improvements Plan Updated? Collect additional information: Review the information received today, receive additional input from the Council, final review of active/pending projects, and additional evaluation of financial constraints Adoption of CIP Plan: Present fiscally constrained plan for adoption at the May 15th City Council meeting. CIP Plans are fluid documents that change as real life happens, a boiler failure jumps in front of interior renovations. Infrastructure failures are like the flu – even the healthiest can get sick. Real life will re-prioritize your plan, you will push projects out of the 5 year window, eliminate projects that no longer seem essential. Review of the CIP will be performed annually, adding a year with the completion of the current fiscal year, addition of projects, and the application of fiscal constraints for a new 5 year period. New projects will be considered and added as they occur. The review process with the Council will begin in February each year, with a public hearing on the updated CIP at the first council meeting in May.