Page 346 - City of Westlake FY20 Budget

Section 10 Capital Improvement Plan
CIP Overview

CIP PRIORITIZATION STRATEGY – PRESERVE * PROTECT * PLAN
• Preserve the past by investing in the continued upgrade of town assets and infrastructure
• Protect the present with improvements and/or additions to facilities, roads, and capital investments
• Plan for the future of the organization

CAPITAL ASSETS BY CATEGORY AND TYPE
When most people think of the Town’s capital assets, they naturally think of the Westlake Academy campus.
While the campus is certainly a very important and visible asset owned by the Town, it is but one of many.
Included in the assets of the Town are all the Town’s infrastructure such as its streets, water, water towers,
and sewer mains, vehicles and other equipment. In preparing this year’s CIP, the staff utilized our annual
audit to determine the value of the Town’s assets.

FUNDING CONSIDERATIONS
In all communities, the cost associated with capital projects far outweighs the available resources necessary
to pay for them; in short there is not enough money. This requires prioritization of the projects based upon
their perceived impact on the community.
Due to the vast number of individual desires it is near impossible to satisfy everyone and requires a
collaborative effort to create situations where the benefits are shared equitably with community
stakeholders. In addition, dedicated revenues will, in most cases, determine which projects get funded. For
example, the Utility Fund may only contribute towards capital projects that improve water and wastewater
projects.

SOURCES OF FUNDING

There are four primary funding sources for capital improvements:
1. Cash Funding (revenue sources such as sales, hotel/motel and property taxes)
2. State/Federal funding (public grants)
3. Private Funding (developmental impact fees or charitable donations)
4. Bond Issuance

The projects in this CIP rely on bond proceeds and other revenues in the Governmental and Enterprise Funds
as well as contributions from corporate partners for funding.
There are two types of bonds:
1. General Obligation (GO) bonds which require voter approval
2. Certificates of Obligation (CO) bonds which do not require voter approval.

HOW INFLATION IMPACTS THE CIP

Inflation is defined as a rise in the price of all goods and services over time. This implies that the purchasing
power, or value, of currency will decline in the future relative to costs. Therefore, more money will be
required to fund CIP related expenditures and must be accounted for. This data is important in calculating
the Town’s future liability; by utilizing inflation trends to calculate future capital replacement costs, we can
determine how ‘waiting’ a year or more impacts the total project cost. Most are aware of the benefits of
compounding when it comes to investing. Unfortunately, this same principle works in reverse as inflation
causes costs to compound higher over time.

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