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Developing a Capital Improvements Program

February 20, 2013 at 9:58 PM

The implementation phase of any regional or local Master Plan is the most difficult. After an extensive public process, the Master Plan itself examines current and anticipated future conditions of multiple topics and proposes projects that might help alleviate some problems and concerns of both the municipality and the public. One question that inevitably arises is, “How are we going to pay for that?” While there are several responses to this valid question, including non-profit grants, municipal warrant articles, operating budgets, and state or federal funding, one method that the communities have control over is the development of and regard for the Capital Improvements Program (CIP).

In a municipality where the Planning Board has adopted a Master Plan, RSA 674:5 enables the local legislative body to authorize the Planning Board to prepare and amend a "recommended program of municipal capital improvement projects projected over a period of at least 6 years."

Some guidance regarding the purpose and description of a CIP is given in RSA 674:6. The CIP should prioritize projects according to the urgency and need for realization, estimate the costs and probable funding sources of each project, and recommend a time sequence for implementation. "The program shall be based on information submitted by the departments and agencies of the municipality and shall take into account public facility needs indicated by the prospective development shown in the master plan of the municipality or as permitted by other municipal land use controls."

A Capital Improvements Program is, at its simplest, a compilation of capital projects that cost at least $10,000 (this is variable per community) which are displayed in a schedule over six years and shows the overall impact to the tax rate per $1,000 of net valuation. A capital project could be an addition to the Town Office, an ambulance, a Zoning Ordinance rewrite, a cemetery plan, acquiring land for a new Library, etc. Most CIPs include supporting information which describe the proposed projects within and some financial analysis of the project purchases. The CIP is generally prepared by a Committee representing various municipal interests. As the CIP establishes long-term priorities of the municipal Boards and Departments, it becomes a respectable policy document that makes recommendations to municipal officials regarding capital expenditures.

Although the CIP does not have the force of law, RSA 674:8 requires the Planning Board to submit its recommendations for the current year to the mayor (Board of Selectmen) and the Budget Committee for consideration as part of the annual budget. They can use the capital items identified within the CIP to understand what the needs are within the community, allowing them to prepare warrant articles for the most important needs.

During Town Meeting or SB2 time, the residents of a community retain control over whether municipal money is spent on the projects brought forth for funding from the CIP. Voters could vote to spend money on a project, vote to set aside funds into a capital reserve fund account, like a savings account, so the project can be “purchased” in the future, or voters could vote to deny funding.

The Capital Improvements Program contains many benefits for the community at large:

  • The CIP is a financial management tool that schedules improvements over time to effectively manage capital expenditures in a community.
  • When implemented, the CIP can eliminate major fluctuations in municipal expenditures to keep the capital project tax rate as level as possible.
  • The CIP can help meet the demands placed on municipal services by anticipated growth by staggering those necessary items within the six-year funding cycle.
  • And, by identifying what equipment is necessary to safely maintain the Town, public safety is improved.

A Capital Improvements Program, whether simply designed or more complex with greater analytical components, is just one of many the municipal management tools available. Your regional planning commission can help you get started on a CIP or answer any questions you might have.

Tags: RPC Capital Improvement Program Implementation
Category: Central NH Planning Commission

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