Page 347 - City of Westlake FY20 Budget

Section 10 Capital Improvement Plan
CIP Overview

FUNDED VS UNFUNDED (UNDER DISCUSSION) CAPITAL IMPROVEMENTS
In prior years, the majority of capital improvements in Westlake have been unfunded. These projects
represent capital needs that are subject to more discussion and are included to convey to the Town leaders
and other interested parties the general parameters and breadth of those capital needs. These projects may
be moved to the “Funded” section of this CIP or moved out into future years depending on priorities, funding
availability, and other considerations. This multi-year capital plan will provide Council with a guide that
communicates the program need or deficiency, as well as the funding requirements. It is important to note
that projects which do not receive funding in a given year are moved out to the future years in order to
communicate to those with decision making responsibility the need to provide necessary funding, or through
evaluation, eliminate the project entirely.

BUDGETING FOR RECURRING CAPITAL EXPENDITURES
Planning for nonperiodic recurring capital expenditures may at first glance seem like a difficult endeavor, but
in fact dealing with them can be as simple as setting aside a small portion of revenue over time. For example,
if a piece of necessary capital has been estimated to have an operational life of 10 years and costs $10,000,
the town could set aside $1,000 toward the recurring capital expenditures account each year. Then, when it
comes time to replace the unit, there will be little, if any, disruption to the town’s cash flow. Note that
changing market forces, such as inflation, also need to be accounted for in the calculation, since an item that
cost $10,000 a decade ago will likely cost more today.

EXAMPLE OF RECURRING CAPITAL EXPENSE
Municipalities that rely on motor vehicles for their livelihood face a recurring, though sometimes
unpredictable, capital expense in the form of vehicle repairs and replacement. A few different approaches
are available that can be used to deal with the realities of this expense. The most common and simplest way
is to make repairs as vehicle damage crops up and replace the vehicles once they are completely unusable,
which under most circumstances is a reasonable policy. The Town has approved guidelines for replacement
based on a point system. Staff reviews each vehicle annually to determine the feasibility of the service length
of the vehicle based on the total points.

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