Town of Arlington
730 Massachusetts Avenue
Arlington, MA 02476
MEMO TO: All Department Heads, Appointing Authorities, Boards, Committees and Commissions
DATE: August 20, 2004
SUBJECT: FY 2006 Capital Budget
FY 2006 - 2010 Capital Plan
The Town Manager is responsible for submitting a five-year capital planning program for all departments to the Board of Selectmen each year. The Capital Planning Committee was created to advise and make recommendations regarding the capital plan. Annually the first year of the Capital Plan will be submitted to the Town Meeting as the Capital Budget for appropriation. The Capital Plan will be reviewed and revised each year to make changes in priorities and to add an additional year to the planning process.
The Capital Planning Committee has begun meeting to make recommendations for the FY 2006 - 2010 Plan and the FY 2006 Budget. The timetable for completion of its recommendations is December 1, 2004.
Please review the attached copy of the FY 2005 approved Capital Budget and the projected FY 2005 - 2009 Capital Plan based on previous requests. Reassess your departmental priorities and make any changes/deletions to the sheets that are necessary. Request forms need only be completed for items in the 2006 and 2010 columns and any other new items. In addition, for each year in the plan, please number in priority order all of your requests on the Capital Planning Program form. This year we will be providing and accepting the form electronically in Microsoft Access.
Attached you will find a packet of information to assist in the development of your capital improvement requests for the five year period beginning with Fiscal Year 2006. Included is a description of the process and the items that should be included in the Capital Budget.
Ten copies of all requests and the updated Capital Planning Program form (or the electronic file) must be submitted to the Town Manager's Office no later than September 15, 2004. Copies of the requests and the updated Capital Planning Program form will be forwarded to the Capital Planning Committee for their review and recommendations. Any requests submitted after that date will not be considered for the Fiscal Year 2006 Budget Cycle.
Any department that would like to review the process should contact Nancy Galkowski, Town Manager's Office, 781-316-3010.
We look forward to working with you on a successful Capital Planning Program.
Town Manager
IMPORTANT DATES TO REMEMBER
September 15, 2004 BUDGET REQUESTS DUE
NOON, TOWN MANAGER'S OFFICE or
SEPT 20 – NOV.30, 2004 REVIEW OF REQUESTS.
The Committee will be meeting individually with departments to review
their requests.
JANUARY 1, 2005 TOWN MANAGER SUBMITS CAPITAL BUDGET TO THE BOARD OF SELECTMEN
CAPITAL PLANNING COMMITTEE
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 2006
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 2006 - 2010.
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 2006 and FY 2010 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 2006 and FY 2010 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 15, 2004 before 3:00 PM. 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 20, 2004 through November 30, 2004. 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.
Brian F. Sullivan, TOWN MANAGER
CAPITAL PLANNING COMMITTEE
Charles Foskett, Chairman
John FitzMaurice, Vice Chairman
Anthony Lionetta, Secretary
Steve Andrew
John Bilafer
Kay Donovan
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.
Instruction Sheet
Capital Budget Request
Complete Department and Budget information in the upper right hand corner. Indicate in which fiscal year this project will commence or the asset will be purchased. It is important that you provide the committee with the priority of each request.
1. Asset or Program/Project Description:
Describe the project to be undertaken or the asset to be acquired. Include as much detail as necessary to define the scope of the asset/project. Please indicate by circling the appropriate word if this is a new asset/project, a replacement of an existing asset, or a modification/refurbishment to an existing asset or ongoing project.
2. Justification/Status/Alternatives:
Include all pertinent information as to why this project should be undertaken (e.g.: threat to public safety and health, legal requirement with citation noted, etc.) or why the asset should be purchased or replaced. If an existing asset is being replaced please indicate the usage and why a repair would not be cost-effective. SPECIFIC COST INFORMATION SHOULD BE PROVIDED.
Please discuss any acceptable alternatives to the proposed asset/project. Please indicate the status of the project, for example, planning, design stage, construction, etc..
3. Funding Priority:
This would be the priority of the project according to the evaluation criteria set forth in the Capital Planning Committee Policy Statement. Circle each and every criteria that is applicable to the requested asset, program, or project.
4. Financial Information:
Please include all capital costs and operational costs associated with the asset or program/project. Complete section (A) for an asset and (B) for a program/project. If funding is being sought or received from another source (e.g. federal grant, state grant, Chapter 90, etc.) please indicate the amount and source. If any revenues are estimated from the item please provide the information in item (C). Be sure to identify the operational costs of the asset/project in section (D). It is also requested this year that you indicate the estimated useful life of the asset or project.
5. Other information:
Please provide any other pertinent information which will assist the committee with its evaluation.
TOWN OF ARLINGTON
CAPITAL BUDGET REQUEST
FISCAL YEAR 2006
Department:
Requested to start in FY
Departmental Priority:
ASSET OR PROGRAM/PROJECT DESCRIPTION: (New Modification Replacement):
JUSTIFICATION/STATUS/ALTERNATIVES:
FUNDING PRIORITY: (please circle)
Health Maintenance Law Infrastructure Productivity Alleviation
FINANCIAL INFORMATION
A. Asset:
Total Cost:
Source of Funding:
B. Program/Project: Costs Source of Funding
Year 1(2006)
Year 2(2007)
Year 3(2008)
Year 4(2009)
Year 5(2010)
C. Yearly Est. Revenue:
D. Operational Costs (est.):
Annual Operating:
Annual Maintenance:
Estimated life:
OTHER INFORMATION:
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