Page 39 - Microsoft Word - Budget FY 19

CITY OF FOREST HILL

Definition of a capital project- a capital asset expected to have a useful life
greater than two years and an estimated cost of $5,000 or more. Capital projects
include the following:

Construction, purchase, or major renovation of buildings, utility systems, streets,
intersections, or other structure

Purchase of land or land rights and major landscaping projects;
Any engineering study or master plan needed for the delivery of a capital project;

Any major repair, renovation or replacement that extends the useful operational
life by at least two years or expands capacity of an existing facility.

Projects meeting the above definition will be included in the Capital
Improvement Plan (CIP) rather than the annual operating budget document.

As a planning document, the City shall adopt annually the first year of a five year
rolling projection of the City’s capital needs as well as the future financing
requirements in the form of a CIP. This can be found on page 137.

The CIP shall be linked to the City financial and strategic plans.

As a planning document, the CIP does not impart any spending authority.

Spending authority for capital projects is the capital budget.

The capital budget shall include only capital projects with budgets appropriated
by specific City Council action. Capital project budgets shall be appropriated on
project by project, multi-year basis (project budget amounts are approved
through completion of the project).

The capital budget does not run concurrently with the operating budget fiscal
year.
City staff shall identify the estimated costs and project schedule for each capital
project proposal before it is submitted to the City Council for approval.

The City Manager shall in writing identify specific available funding sources for
each capital project budget proposal before it is submitted to the City Council for
approval.

Expenditure tracking for components of the capital budget will be updated
quarterly to ensure project completion against budget and established timelines.

Change orders resulting in a change in the project cost shall require an
amendment to the capital budget.

Capital improvements may impact the operating budget. Addition of new
infrastructure can lead to expanded programs and a need to hire personnel to
manage program operations. Replacement of aging structures may decrease
operating and maintenance expenditures due to energy efficiencies and reduced

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