The Capital Improvement Program (CIP) is a major financial, public infrastructure and equipment planning tool for municipalities. It is a long-range plan that identifies capital projects and equipment, provides a planning schedule and identifies options to fund the projects and equipment. The development of a CIP provides information regarding planned need costs, timing, anticipated funding sources, budget impacts and alternatives. The CIP provides a link between the various master plans, the City’s comprehensive plan, and the annual budget.
The CIP sets forth proposed projects for constructing, maintaining, upgrading and replacing the City’s physical infrastructure and equipment necessary for continued operations and providing City services during the next five fiscal years. Projects listed in the CIP report are not necessarily listed in priority order and are not to be construed as a promise to any person or group that it will be completed within a specific time frame. A CIP is not a static document, but rather, a fluid document that can be changed as the infrastructure requirements change, development occurs, and funding opportunities become available.
In developing a CIP, it is important to distinguish between operating and capital expenses. Generally, these items are defined based on their cost and frequency of occurrence. Operating items are those that represent ongoing operating expenses, such as maintenance, outside of onetime capital expenditures.
Presented below are the definitions developed specifically for the City for capital expenses that should be included in the CIP budget:
- Any construction of a new public facility (e.g., a public building, a public street, sewer lines, parks, play field, or the like) or an addition to, or extension of, such a facility.
- A non-recurring rehabilitation or replacement of existing public facilities, or major repair of all or a part of a public facility, provided that the cost is $50,000 or more.
- Purchase of major equipment of $50,000 or more (either one item or a number of items with a cumulative one-time purchase of $50,000 or over) and a useful life of two years or more.
- Planning, feasibility, engineering or design studies and services immediately related to an individual capital improvement project.
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