BUDGETING & ACCOUNTING FOR GRANTS AND CAPITAL PROJECTS

2013 Municipal Professionals’ InstitutePatrick Callahan, Municipal Consultant

CAPITAL IMPROVEMENT PLANNING (CIP)CIP Definition - Written Document

Long range plan (4-6 years)

Planning, scheduling, & financing

Construction projects & equipment

Key- Costs & Frequency

CIP - “THE MISSING LINK”

COMPREHENSIVE PLAN

CAPITAL IMPROVEMENTS PLAN

CITY’S ANNUAL BUDGET

PARTS OF PLANNING PROCESSCOMP PLAN

SMART PLAN

STAFFCOUNCIL CITIZENS

GOAL SETTING/CIP

ANNUAL BUDGET

CIP - THE TOP TEN LIST

1. Systematic Evaluation of all Potential Projects - At Same Time2. Stabilize Debt Structure3. Consolidate Projects - Reduce Borrowing Costs4. Public Relations5. Preserve the City’s Infrastructure

CIP TOP TEN LIST continued6. Economic Development Tool - City has “It’s Act Together”7. Efficient Use of City Money8. Foster Cooperation - Everyone has the “Big Picture”9. Inform Other Governments - County, Schools, Cities10. Accomplish Long Term Goals

GETTING CIP “BUY IN”Mayor/Council/City

Administrator/Department Heads

1. Seek Project Suggestions

2. Ranking of Projects

3. Annual Reviews

4. Regular CIP Updates

5. Public Input

LEGAL ASPECTS OF CIP1. Public Hearing - Code of Iowa 384.15

(3)

2. CIP Levy - 67.5 cents/$1,000 - Voters

3. Bid Letting - Code of Iowa 384.95

4. Emergency Levy - 27 cents/$1,000

CONSTITUTIONAL DEBT LIMIT 5% of Assessed Value - Not Taxable

Value

Applies to G.O., TIF & LOST Bonds

Not Apply to Revenue Bonds, RUT Bonds, or Special Assessment Bonds

CIP PROCESS

1. Define the Criteria2. Organize the Process3. Develop Basic Policies4. Forecast the Demand or Growth5. Inventory Existing Facilities6. Prepare Project Proposals

CIP PROCESS continued

7. Seek Advice8. Review City’s Finances9. Prepare Scenarios - Schedules10. Prepare CIP Draft11. Public Hearing12. Final Draft - Council Resolution

CIP – First Year in the Next City Budget Identify Expenditures and

RevenuesConsider the tax leviesReview the special revenues

CIP INFORMATION TITLE DESCRIPTION JUSTIFICATION LOCATION DEPT. PRIORITY REVENUE IMPACT

CAPITAL COSTS COSTS - ANNUAL FINANCING RELATIONSHIP STATUS COUNCIL PRIORITY

SOURCES OF FUNDING FOR CAPITAL PROJECTSPotential Revenue Sources1. Municipal Debt Financing

a. G.O. Bonds - Essential Purpose (No Vote)b. G.O. Bonds - General Purpose (60% Vote)c. Review Existing Debt

2. Revenue Bonds3. Special Assessments4. Loan Agreements

SOURCES OF FUNDING FOR CAPITAL PROJECTS

Potential Revenue Sources5. RUT Money6. Grants and Donations7. Lease Purchase Agreements8. TIF/Urban Renewal Funds

SOURCES OF FUNDING FOR CAPITAL PROJECTS continued

9. LOST Revenue - Voter Approval10. User Fees11. Special Taxing Districts

ADDITIONAL INFORMATION

1. Municipal Debt Financing2. G.O. vs Revenue Debt3. G.O. vs. TIF Debt

-Disclaimer- Consult the City’s Bonding Attorney

BEST PRACTICES FINAL COMMENTS1. Annual Reviews2. Quarterly Updates3. How to Get Started4. Questions5. Comments

Contact Information

Patrick CallahanCallahan Municipal Consultants 417 Kaitlynn AveAnamosa, IA 52205callahan.cmc@gmail.comCell: (563) 599-3708