CAPITAL IMPROVEMENTS PLANNING FN 401 MPI

Patrick Callahan, Municipal ConsultantJuly 21, 20141:00PM

CAPITAL IMPROVEMENTS PLANNING (CIP)CIP Definition - Written Document

Long range plan (4-6 years)

Planning, scheduling, & financing

Construction projects & equipment

Key- Costs & Frequency

CIP - “THE MISSING LINK”

COMPREHENSIVE PLAN

CAPITAL IMPROVEMENTS PLAN

CITY’S ANNUAL BUDGET

PARTS OF PLANNING PROCESSCOMP PLAN

SMART PLAN

STAFFCOUNCIL CITIZENS

GOAL SETTING/CIP

ANNUAL BUDGET

CIP - THE TOP TEN LIST

1. Systematic Evaluation of all Potential

Projects - At Same Time2. Stabilize Debt Structure3. Consolidate Projects - Reduce Borrowing Costs

CIP - THE TOP TEN LIST

4. Public Relations5. Preserve the City’s

Infrastructure6. Economic Development Tool -

City has “It’s Act Together”

CIP TOP TEN LIST continued

7. Efficient Use of City Money8. Foster Cooperation - Everyone has the “Big Picture”9. Inform Other Governments -

County, Schools, Cities10. Accomplish Long Term Goals

GETTING CIP “BUY IN”Mayor/Council/City

Administrator/Department Heads

1. Seek Project Suggestions

2. Ranking of Projects

3. Annual Reviews

4. Regular CIP Updates

5. Public Input

LEGAL ASPECTS OF CIP1. Public Hearing – Code of Iowa

384.15(3)

2. CIP Levy – 67.5 cents/$1,000 - Voters

3. Bid Letting – Code of Iowa 384.95

CONSTITUTIONAL DEBT LIMIT Check State Law – 5% of Assessed Value

Applies to G.O., TIF, LOST Bonds

Not Apply to Revenue Bonds, RUT Bonds, or Special Assessment Bonds

CIP PROCESS - Overview

1. Define the Criteria2. Organize the Process3. Develop Basic Policies

CIP PROCESS (continued)

4. Forecast the Demand or Growth5. Inventory Existing Facilities6. Prepare Project Proposals

CIP PROCESS (continued)

7. Seek Advice8. Review City’s Finances9. Prepare Scenarios - Schedules

CIP PROCESS (continued)

10. Prepare CIP Draft11. Public Hearing12. Final Draft - Council Resolution

Organizing the Process for Capital Improvements Plan (CIP)

1. Council Committee of the Whole2. Special CIP Committee3. Designating the Coordinator or

“Quarterback”

Organizing the Process for Capital Improvements Plan (CIP)(continued)

4. Establishing a time table5. Identifying expert assistance –

department heads, engineers, financial consultant, contractors, vendors, city employees, etc.

6. Develop Project Profile Form

Defining a Capital Project

1. Consider the frequency of occurrence

2. Determine minimum cost threshold

3. Consider the life expectancy of the project or equipment

Develop the City’s Basic Polices on Infrastructure and Level of Service

1. Streets – surface, width, base, curb and gutter

2. Water Mains – size, type, depth, pressure, etc..

3. Storm Sewers – size, intakes, type, and locations

Develop the City’s Basic Polices on Infrastructure and Level of Service

4. Sanitary Sewers – location, size, type, and service lines

5. Parks – number, size, type, and service lines

6. Water – treatment and storage capacity

Develop the City’s Basic Polices on Infrastructure and Level of Service

7. Wastewater – DNR requirements, future needs and type of treatment

8. Police & Fire – vehicles and equipment

Forecast Demand for Services

1. Determine areas for growth2. Identify areas that lack basic

services

Review Existing Documents for Potential Projects

1. Comprehensive Plan2. Wastewater Inspection Reports - IDNR3. Water Inspection Reports - IDNR

Review Existing Documents for Potential Projects (continued)

4. Previous Engineering Studies5. Department Heads “Wish Lists”6. Annual Reports – City

Departments

Conduct an Inventory of Existing Facilities and Equipment

1. City Hall/Library – roof, foundation, structure, size, & appearance

2. Public Works Garage – roof, foundation, location &appearance

3. Fire Station – roof, foundation, siding, appearance, & size

Conduct an Inventory of Existing Facilities and Equipment (continued)

4. Water Towers – age, size, paint, & interior condition

5. Wastewater Plant – age, capacity, condition, & cost of operation

6. Parks – condition of facilities, appearance, & safety of equipment

Conduct an Inventory of Existing Facilities and Equipment (continued)

7. Fire Equipment – age, use, & condition

8. Public Works Equipment – age, use, & condition

Prepare List of Potential Projects

1. Discuss the merits of each project

2. Review City’s financial capacity to pay

3. Determine the priority of projects

Prepare List of Potential Projects (continued)

4. Conduct Council tour of projects

and buildings5. Develop two lists – in CIP or postpone

CIP INFORMATION TITLE DESCRIPTION JUSTIFICATION LOCATION DEPT. PRIORITY REVENUE IMPACT

CAPITAL COSTS COSTS - ANNUAL FINANCING RELATIONSHIP STATUS COUNCIL PRIORITY

Prepare Project Profiles or Project Summaries for Each Project

1. Title or name2. Brief description 3. Justification for the project

Prepare Project Profiles or Project Summaries for Each Project (continued)

4. Cost estimate – construction, engineering, & legal

5. Possible completion date or timing

6. Priority or ranking by Departments and Council

Prepare Project Profiles or Project Summaries for Each Project (continued)

7. Map, site plan, or picture8. Potential funding sources9. Annual impact on revenues and

expenditures

Review of Project Profiles

1. Department Head comments2. Engineer comments3. Financial Consultant review

Conduct an Initial Ranking of Projections

1. Assign a score – A, B, C, or D2. Tabulate results and average

score3. Discuss the overall ranking

Review the City’s Financial Capacity to Complete the Projects

1. Identify potential revenues for CIP Projects

Current or Existing Funds Cash balances Road use tax funds Sewer or water revenues Property taxes

Review the City’s Financial Capacity to Complete the Projects (continued)

Grants and Loans DNR programs CBDG funds USDA programs Donations and bequests

Review the City’s Financial Capacity to Complete the Projects (continued)

Municipal Debt Options General obligation bonds Revenue bonds Special assessment bonds Lease purchase agreements

Review the City’s Financial Capacity to Complete the Projects (continued)

2. Identify Other Financial Options

Local option sales tax Storm water utility Tax increment financing (TIF)

Review the City’s Financial Capacity to Complete the Projects (continued)

2. Identify Other Financial Options

Capital improvements levy Increase general fund levy Increase water and sewer user fees Joint sharing agreements

Review the City’s Financial Capacity to Complete the Projects (continued)

3. Select best financial option for each project

Prepare department schedules Identify financial impact on cash

balances, user fees, and taxes

Conduct a Second Ranking of Projects - Optional

1. Assign a score – A, B, C, or D2. Tabulate the results3. Discuss the overall ranking4. Reach a consensus!

Public Comments

1. Publish notice on CIP2. Copies of CIP on file at City Hall3. Conduct public hearing

Adoption of the CIP and Inclusion in Annual Budget

1. Adopt by Resolution2. Conduct quarterly review3. Include “Year 1” in Annual Budget

Adoption of the CIP and Inclusion in Annual Budget (continued)

4. Conduct an annual review5. Continue to refine the process

Future Citizen Input on CIP Process

1. Copies of CIP available for public2. Presentation to Service Clubs3. Annual Town Meetings

Future Citizen Input on CIP Process

4. “Open House” of City Facilities5. City Newsletter

ADDITIONAL INFORMATION

1. Municipal Debt Financing2. G.O. vs. Revenue Debt3. G.O. vs. TIF Debt

-Disclaimer- Consult the City’s Bonding Attorney

BEST PRACTICES FINAL COMMENTS1. Annual Reviews2. Quarterly Updates3. How to Get Started4. Questions5. Comments

Contact Information

Patrick CallahanCallahan Municipal Consultants 417 Kaitlynn AveAnamosa, IA 52205callahan.cmc@gmail.comwww.callahanmuicipalconsultants.comCell: (563) 599-3708