Page 335 - Keller Budget FY21

CAPITAL IMPROVEMENT PROJECT FUNDS

FUND DESCRIPTION:
Capital Improvement Project (CIP) Funds are costs related to large, one-time projects which either create or improve an asset and are project-life
budget based and not fiscal year budget based. Project-life budgeting means fund are appropriated until the project is completed, rather than on
an annual basis as capital projects tend to cross over multiple fiscal years. The Capital Project Budgets are not included in the City’s operating
project budget as the funding sources are typically transfers from an operating project, therefore the revenue source and expenditure costs have
already been accounted for within an operating project fund. CIP project funds typically do not include capital outlay expenditures such as vehicles
and equipment purchases unless the expenditure is part of a larger project. Capital outlay expenditures are included in the departmental operating
budgets and considered part of the annual operational costs.

FIVE YEAR CIP PROCESS:
The City annually prepares a five-year CIP which is a financial management and planning tool to help address changes in the growth and service
demands of the City services. The CIP summary includes the adopted 2015-16 through 2019-20 funding and expenditure allocations, the proposed
2020-21 funding and expenditure allocations, and the anticipated 2021-22 through 2024-25 funding and expenditure allocations which are separate
annual allocations for the listed projects.

The City uses project-life budgeting meaning the total proposed project funding and expenditures allocations include the prior year allocations plus
the proposed FY 2020-21 allocations. The revenues and expenditures allocations end at the close-out of the project, rather than at the end of the
fiscal year. Future allocations are for planning purposes only and does not commit the City to any project or funding authorization. The future
project information provided in the CIP is used as a guide for preparing future operating budgets, as well as a general planning document for
capital improvements financing.

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