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.

Only major capital items are included in the CIP. Major capital expenditures are defined as follows:

• The item is tangible

• The value is $50,000 or over

• 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) life expectancy is at least two (2) years

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 2023 tax supported debt service (principal and interest payments) is $12,449,646 (including $8,893,667 for Schools). In addition, the Utilities Fund debt service for FY 2023 is $12,926,840. The FY2023 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 2023 General Fund reserves amount for CIP projects is $1,270,000. 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 FY2023 CIP includes $2,225,000 for improvements to athletic fields at Jim Barnett Park, $175,000 to upgrade the elevator at City Hall, and $410,000 to upgrade the broiler at the Joint Judicial Center. These improvements will result in annual cost savings, including maintenance and utilities expenses.