the municipal secretary desktop reference manual - Southwestern ...

E. CAPITAL IMPROVEMENT
PROGRAMMING AND BUDGETING
Capital improvement programming and budgeting involves the development of a longterm
plan for municipal investment in buildings, land, major equipment, and other commodities
which are of significant value and have a useful life of several years.
The capital improvement program includes each proposed capital item to be undertaken,
the year in which it will be started, the amount expected to be expended in each year, the
proposed method of financing these expenditures, and the impacts these projects will have upon
the operating budget. The capital improvement budget is enacted annually based on the capital
improvement program. It encompasses enacting appropriations for the projects in the first year
of the capital improvement program, and authorizing necessary bond issues or other financing
methods to fund these improvements. The capital program must be updated after the enactment
of the capital budget to:
! make any adjustments in future program years arising from changes in the current
amount funded; and,
! add a year of programming to replace the year funded.
A systematic, organized approach to planning capital facilities provides a number of real
and practical advantages. By planning in advance, the effort put into deliberating a community=s
needs, objectives, growth potential and financial capability helps to develop a prioritized list of
projects.
By encouraging public participation in these deliberations, community support for the
high priority project is more easily realized for related bond issues, rate increases or other
funding methods. Keeping planned projects within the financial capacity of a community helps
preserve its credit and bond rating and makes the community more attractive for economic
development.
Further, a well-planned capital improvements program places a community in a better
position to take advantage of federal and state grant programs which may require matching
funds, or prior facilities planning.
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