The Five-Year Capital Improvement Plan (CIP) is a plan for purchasing capital expenditures over a period of five years to meet capital needs arising from the long-term work program. It sets forth each project or other contemplated expenditure and specifies the full resources estimated to be available to finance the project. City Council appropriates the projects scheduled for the first year of the plan at the same time as the operating budget. The projects scheduled in the next four years of the CIP are included for planning purposes. The information in the prior and future years are intended only to show the complete cost of a project that may be partially undertaken in a year not included in the five-year plan.
defining capital expenditures
Only major capital items are included in the CIP. Major capital expenditures are defined as follows:
• The item is tangible or intangible property
• The value is $50,000 or over
• The individual acquisition cost is less then the per unit threshold if those assets in aggregate are significant
• The life expectancy is at least seven years
• If an improvement, then the value of the asset is increased, or the useful life is extended beyond that originally anticipated.
Major capital assets may include such items or projects, a refuse truck, water line replacement, or construction of a building to name a few.
Minor capital expenditures will be budgeted at the department/division level and are not included in the Capital Improvement Program. Minor capital expenditures are defined as follows:
1) item is tangible
2) value is at least $10,000, but less than $50,000
3) the individual acquisition cost is less then the per unit threshold if those assets in aggregate are significant
4) life expectancy is at least two (2) years
impacts of the capital improvement plan on the operating budget:
Debt Services - The annual payment of principal and interest on general obligation bonds used to finance roads, schools, and other major projects is included in the operating budget as a required expenditure. The FY 2024 tax supported debt service (principal and interest payments) is $12,895,900 (including $8,945,200 for Schools). In addition, the Utilities Fund debt service for FY 2024 is $13,044,700. The FY2024 Adopted budget does not include any new debt.
Reserves – Some CIP projects are funded with fund balance to avoid the cost of borrowing. These amounts are in included in the operating budget as a transfer to the Capital Improvement Fund. The FY 2024 General Fund reserves amount for CIP projects is $2,880,000. The City has a robust fund balance policy, which allowed the City to fund numerous projects with reserves for several years. This policy enabled the City to keep the debt service within the debt policy limits, while continuing to ensure facilities and infrastructure are functional and maintained to achieve energy efficiency and lower repair and maintenance costs.
Other Operating Impacts – The construction of government buildings and facilities usually results in new annual costs for maintenance, utilities, and additional staffing required for facility management and operation. These costs are discussed and reviewed by staff as part of the planning and budgeting process. There could also be anticipated savings as a result of a project being completed, such as decreased maintenance costs as a result of a new facility. The project request forms that follow display the estimated operating impacts for individual projects where applicable.
Significant Non-recurring Capital – The FY2024 CIP includes $1,120,000 for improvements to athletic fields at Jim Barnett Park, $360,000 for improvements to the Social Service Building, and $1,400,000 to purchase a Fire Engine and Ambulance. These improvements will result in annual cost savings, including maintenance and utilities expenses.
PROJECTED FUNDING SOURCES
Winchester Public Schools
Winchester Public Schools