Capital Improvement Program Overview
Fiscal Year 2022-2023
How the Program Works
The City of Apopka's Capital Improvement Plan (CIP) is a planning, budgetary and prioritizing tool that reflects the City's infrastructure needs for a five-year time frame. The CIP is updated on an annual basis.
Capital Projects are major fixed assets or infrastructure with long-term value, such as buildings, roads, sidewalks, and parks. A capital improvement is defined as any purchase of equipment or any construction project having a non-consumable nature, a value of $5,000 or more, and a normal expected life of which is one year or more. Proposed CIP project requests may originate from City departments, Commissioners, and/or citizens.
Funds budgeted for a specific project remain allocated until the project is completed. Additionally, project budgets are reviewed and, if necessary, funding may be adjusted. Capital project costs include all expenditures related to land acquisition, planning, design, construction, project management, legal expenses, and mitigation of damages.
Projects may be funded by current revenues or by debt financing, depending upon the availability of reserves, the nature of the project, and policies of the City Charter. In balancing the five-year plan of the CIP, projections of revenues from existing sources are compared to requested capital projects. If there are adequate revenues to fund
all of the requested projects, the CIP is balanced. If not, projects must either be revised to reduce costs, postponed to a future time period, or eliminated from the program. Alternative financing, such as long-term debt, may be proposed in order to provide sufficient revenues to fund the projects. There may be a bona fide reason why a project is needed, but it may need to be deferred to a later date if resources are not realistically available.
The overall CIP, with its five-year time frame, gives a fair indication of the foreseeable infrastructure needs of the City.
Relationship Between the Operating and Capital Budgets
The operating budget includes expenses that are generally of a recurring nature and are appropriated for one year only. It provides for all City services but does not result in major physical assets for the City. Year to year, changes in the Operating budget are expected to be fairly stable and represent incremental changes in the cost of doing business in the size of the City and in the types and level of service that is provided. Resources for the Operating budget generally come from taxes, user fees, and intergovernmental payments that usually recur from year to year.
The Capital budget includes one-time costs for projects that routinely last several years. The projects result in major physical assets for the City. Resources for the Capital budget generally come from bond issues, impact fees, grants, and taxes.
However, the Operating and Capital budgets are closely linked. The most obvious link is the Operating budget assumes the cost of maintaining and operating new facilities built under the Capital budget. Operational needs often drive the Capital budget, i.e. Utility expansion, roads, water mains, and parks which are necessitated by population growth and the City's role in providing basic services to its citizens.