POLICY STATEMENT
The goal of the Capital Planning Program is to provide a means of planning for the maintenance and/or improvement of the capital assets and infrastructure of the Town of Arlington.
It is maintained by this committee that the maintenance of the infrastructure and the capital assets of the Town is of vital importance to the delivery of the quality services that the Town has been known for. To this end, the committee is dedicated to accomplishing the following objectives:
to review, plan, and coordinate capital improvements so as to promote a systematic, organized replacement and acquisition schedule
to insure that, given limited resources, the capital needs of the community are met
to present a sound financial package so as to stabilize and level out the debt of the Town. It should assure timely planning for the most economical method of financing capital improvements
to insure wider community participation in the planning of projects and to reduce the pressure to fund a project which may not present as great a need as another project
to promote a more effective administration and coordination of capital projects to reduce scheduling problems, and conflicting or overlapping projects not only among local departments but also among other local and state agencies and private enterprises such as the gas and electric companies.
EVALUATION CRITERIA
In reviewing the requests of the operating departments the committee will use the following criteria for evaluation:
1. Imminent threat to the health and safety of citizens/property.
2. Maintenance of operations/necessary expenditure. This does not include ordinary maintenance but rather maintaining a current service level through improvement of a capital asset. Please refer to the definitions. These may be major expenditures that will avoid costly replacement in the future.
3. Requirement of State or Federal Law/regulation.
4. Improvement of infrastructure.
5. Improvement of productivity.
6. Alleviation of an overtaxed/overburdened situation.
The relationship of the project to other town projects and needs will also be considered in the review and prioritization.
Describe how the Capital Planning Committee makes decisions. What process does the committee use to review and approve requests?
The CPC receives capital budget requests from Department Heads and begins to meet and review requests in early October. The CPC members look at the Town's overall financial situation and, within this larger context, each department's request is compared to the request and the recommendation from the prior year and to the five-year capital plan for that department. CPC members use the criteria listed on the capital budget forms to assess the requests. The members also tend to ask if this request reflects an interdepartmental planning effort, if the department has considered other sources of funding or if the department has undertaken any kind of cost/benefit analysis. CPC members like to see evidence of longer term planning for departmental needs, of planning for maintenance expenses and of
interdepartmental cooperation. Priorities that emerge suddenly in one year with no reference in prior year requests tend to be more heavily scrutinized.
Information technology requests are expected to have passed through the master planning process coordinated and updated through the Data Processing Advisory Board (DPAB). The DPAB maintains a 5 year plan for IT expenses including phones, wireless, computer systems replacement, GIS, etc.
Increasingly, the CPC looks for evidence of long term interdepartmental planning around expenditures for buildings, playgrounds, parks and fields. Over recent years the CPC has been increasingly concerned about the lack of a coordinated approach to projecting facilities maintenance and capital improvement costs.
Vehicles and copiers are common requests and the CPC is interested in coordinated purchasing programs for these items.
The capital budget is prepared from a town wide perspective. There is no assumption of a budget quota for individual departments. CPC members look at the history of spending patterns for each department. Departments that have requested and received more money than actually required tend to be more heavily scrutinized.
The CPC members each specialize in two or three departments and meet with those department heads during the Fall. The intent of these meetings is to enable the CPC to get a fuller understanding of the current and long-term needs of the department, and the process used to determine these needs. The results of these meetings are reported back to the whole CPC and are often discussed by the group.
The CPC converts the data requests to a "Microsoft Access" spread sheet and reviews the requests in relation to their priorities, their urgency, their cost, etc. The sum of money available to fund the Town’s Capital program is approximately five (5) percent of the total revenue. This sum includes the debt service from prior years. Historically the CPC has received requests far exceeding this sum. Thus very difficult decisions must be made as to what projects receive funding in any given year. After considerable review, the CPC recommends a capital budget for the Town, based on advice from the Finance Committee and others about what the Town can afford. The recommendations are submitted to the Town Manager.
CAPITAL PLANNING PROCEDURES
FISCAL YEAR 2005
INTRODUCTION
The updating of the Capital Improvement Plan is an annual process, dropping the year budgeted and adding another planning year. This process should provide a mechanism for identifying, planning, and financing major capital improvements over a five (5) year period. The Capital Planning Committee and the Town Manager are now in the process of developing the Capital Improvement Plan for FY 2005 - 2009.
The procedures and guidelines established remain the same. The following items should be noted.
In order to facilitate the process, request forms do not need to be completed for all capital items. Request forms only need to be completed for FY 2005 and FY 2009 items and any additional requests that may have arisen since the last budgetary cycle. Also the Capital Planning Program form should be reviewed, updated, and items numbered in order of priority for each fiscal year.
The attached DEFINITIONS should give you the information necessary to determine what should be excluded from your operating budget and placed in the capital budget.
The procedure for the capital plan development is divided into several steps that are outlined on subsequent pages.
STEP 1 - DISTRIBUTION OF MATERIALS - The enclosed documents shall serve as the forms and guidelines for the submittal of all material. Carefully review the entire package. Any department that would like to review the process may contact Nancy Galkowski, Town Manager's Office.
STEP 2 - DEVELOPMENT OF FIVE-YEAR CAPITAL NEEDS - All departments should review their five-year capital needs and determine which needs should be considered for inclusion in the capital planning process. Use the evaluation criteria previously identified in determining which items may be considered priority.
STEP 3 - COMPLETION OF CAPITAL PLANNING PROGRAM FORM AND REQUEST FORM - Once you have determined which assets/projects should be included in your capital requests you should update the Capital Planning Program form. Number each request in priority order for each year. Please eliminate those requests which are no longer necessary. Capital Budget Request forms included in this package should be completed for all items in the FY 2005 and FY 2009 columns and any other additional items. Please make copies of this form as needed. An instruction sheet is also included to assist you with any questions you may have in completing the form. Should you have any questions or problems please bring them to our attention.
STEP 4 - SUBMITTAL OF REQUESTS - Ten (10) copies of the Capital Request forms and the updated Capital Planning Program form should be submitted to the Town Manager's Office by September 19, 2003 at NOON. Alternately, and preferably, the requests should be submitted via e-mail (ngalkowski@town.arlington.ma.us) in a Microsoft Word file format. Copies will be forwarded to the Capital Planning Committee from this office.
STEP 5 - REVIEW OF REQUESTS - The Capital Planning Committee will be reviewing all requests submitted by the Departments from September 22, 2003 through November 30, 2003. Department heads with projects which require greater detail and review may be asked to provide further information or to meet with the committee. Projects will be reviewed based on the evaluation criteria. The relationship of the project to other town projects and needs will also be considered in the review and priority ranking.
STEP 6 - RECOMMENDATIONS DEVELOPED - The Capital Planning Committee will then be formulating recommendations on the Capital Budget for the Town Manager. It will be the responsibility of the Town Manager to present the Capital Budget to the Board of Selectmen.
STEP 7 - FINALIZATION OF THE CAPITAL PLAN AND BUDGET - The Capital Plan and the Capital Budget will be finalized by the Town Manager and submitted to the Board of Selectmen. The Capital Budget will then be subject to the normal budget procedure.
If you have any questions concerning this procedure or your role in the development of the Capital Plan, please do not hesitate in contacting the Town Manager's Office or the Capital Planning Committee.
Nancy T. Galkowski, ACTING TOWN MANAGER
CAPITAL PLANNING COMMITTEE
Charles Foskett, Chairman
Steve Andrew, Vice Chairman
Anthony Lionetta, Secretary
John Bilafer
Kay Donovan
John FitzMaurice
Nancy Galkowski
Ruth Lewis
Barbara Thornton
CAPITAL BUDGET
DEFINITIONS
CAPITAL ASSET
An item that is available to, controlled by, or acquired by the Town, has a useful life of at least two years, and has a purchase cost of at least $3,000. Examples include equipment, land, buildings, and vehicles. All capital assets are included in the capital planning program.
OPERATIONAL ASSET
An item that is available to, controlled by, or acquired by the Town, has a useful life of at least two years, and has a purchase cost of more than $100 and less than $3,000. Such assets are not included in the capital planning program, except when the request for funds for the class of assets exceeds $25,000.
CAPITAL OUTLAY
An expenditure to (a) acquire a capital asset through a purchase, lease or rental agreement; (b) improve, restore, or renovate a capital asset in a manner that extends the asset's useful life. A capital outlay also includes engineering and other studies. However, it excludes expenditures for ordinary and routine maintenance that are necessary to preserve the asset and keep it functioning, and which do not materially increase its value or extend its useful life.
ACQUISITION COST
The sum of all expenditures that are necessary to obtain a capital asset and place it in service, including, but not limited to, purchase or lease price, delivery, installation, and site preparation.
OPERATING COST
An expenditure that is made to use or operate a capital asset, including, but not limited to maintenance service agreements, gasoline and fuel, cleaning, replacement and repair of minor parts, insurance, and supplies that are consumed through use of the asset.
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