A capital improvement project is a project that may include the construction of new facilities as additions to the City's assets, and/or infrastructure, renovation of existing structures to significantly extend useful life, and major repair operations of a comprehensive and non-routine nature. To be defined as a capital project, the project must exceed $15,000 in cost, and should be an expense that is nonrecurring (not an operating budget item). Most generally, the cost of a capital improvement project requires the issuance of public debt. Common examples of capital improvement projects include the construction of roads and bridges, facility construction, and land acquisition. However, funding of certain other large ticket items such as fire trucks is considered to be a capital project as well. The City of Edgerton's Capital Improvement Program and Policy may be found in the Budgets, Policies, and Reports section of the Budget and Finance area.

WHAT IS A CAPITAL IMPROVEMENT PROGRAM?

A capital improvement plan is a document that is the result of a systematic evaluation of capital projects. The plan serves as a guide for the efficient and effective provision of public facilities, outlining a schedule and the proposed financing of capital projects for a five year period of time. In the process of formulating the plan, public improvements are prioritized and costs are projected, thereby allowing the City to take maximum advantage of federal, state, and county funds. However, the capital improvement plan is not a document of long-term certainty. Rather, the plan is reviewed annually, during which time the needs of the City may be re-prioritized and financial status re-evaluated. This allows the City further flexibility in maintaining and promoting an effective level of service for present and future citizens.

WHAT ARE THE OBJECTIVES OF A CAPITAL IMPROVEMENT PROGRAM?

• To forecast and provide public improvements in a systematic manner. 

• To anticipate and project financing needs in order to maximize available federal, state and county funds.

• To promote a sound financial plan to enhance and protect the City's ability to issue debt, in accordance with the Debt Policy.

• To avoid, through sound financial planning, dramatic fluctuations of the tax rate.

• To focus attention on and assist in the implementation of established community goals as outlined in the official Comprehensive Plan.

• To serve as a guide for local officials in making budgetary decisions.

• To balance the needs of development throughout the community.

• To promote and enhance the economic development of the City.

• To strike a balance between improvement needs and the financial capability of the City.

• To provide an opportunity for citizens and interest groups to voice their opinion regarding request for improvement needs.

HOW DOES CAPITAL SPENDING IMPACT THE OPERATION BUDGET?

Capital spending impacts the operating budget by adding additional revenue and also additional expenses sometimes. When the City undertakes a capital improvement such as streets, sometimes it is undertaken to attract new businesses or industries to the City. Thus, the businesses will increase the City's property tax distribution and also increase the sales tax distribution. Building permits also increase due to construction of the buildings used in the businesses.

The Construction of a new street will:

• Increase the expenditure side of the operating budget.
• Administration has additional area to zone.
• The Sheriff’s Department has additional streets to patrol.
• The Public Works Department has an additional street(s) to maintain.

HOW IS THE CAPITAL IMPROVEMENT PROGRAM FORMULATED?

Since a Capital Improvement Program is intended to schedule major physical improvements, it is necessary to allow all City departments an opportunity to submit capital improvement requests that are anticipated over a five-year period. Likewise, citizens and public interest groups are offered the opportunity to voice their requests for community improvements.

Once a composite list of capital improvement requests has been created and the administrative recommendations submitted, the Planning Commission is responsible for reviewing and recommending project priority from a professional planning perspective. The Governing Body is responsible for recommending and prioritizing projects from a budgetary and affordability perspective, as well as, examining the need and priority of the projects themselves. The scheduling of projects over a five-year period is based on an evaluation of Edgerton’s development policies, plans for future growth, and the ability of the City to amortize the debt.

It is important to understand that the Governing Body is not committed to a particular expenditure in a particular year. Instead, the capital improvement programming process is repeated each year to allow reevaluation of previous requests, consider new requests based on changing needs, and to reestablish capital priorities.