The Capital Improvement Plan or CIP is the Commission’s ten-year roadmap for creating, maintaining and funding present and future infrastructure requirements. The CIP addresses the Commission’s needs related to the acquisition, expansion, and rehabilitation of long-lived facilities and infrastructure. The CIP serves as a planning instrument to identify needed capital expenditures and to coordinate the financing and timing of improvements in a way that maximizes the return to the customers.
Capital improvement planning is a process used to provide the efficient and effective provision of MPW facilities/assets. Planning for capital facilities over time can promote better use of MPW’s limited financial resources and assists in coordination of capital projects. In addition, the planning process is a valuable means of coordinating and taking advantage of joint planning and development of projects where possible. By looking beyond year-to-year budgeting and projecting what, where, when and how capital investments should be made, capital programming enables MPW to maintain an effective level of service for both present and future customers.
The Capital Improvement Plan takes a critical look at the entire organization, to identify what is good, what could be improved, and where opportunities for new projects exist. For this reason, MPW seeks the following goals from its CIP process:
- Ensure that MPW’s 10-Year Capital Improvement Plan is affordable and finances only necessary capital expenditures.
- Enable informed capital investment decisions according to a fair, open and objective process.
- Emphasize the requirement for long-term planning.
- Enhance the linkage between the Capital and Operating Budgets.
- To avoid the need to impose “crisis” rate increases.
- To focus customer’s attention on MPW’s goals, needs and priorities.
- To serve as an education tool for the community and MPW.
A critical element of a balanced CIP is the provision of funds to both preserve or enhance existing facilities and provide new assets to respond to changing service needs and the growth of the community. While the CIP serves as a long range plan, it is reviewed annually and revised based on current circumstances and opportunities. Priorities may be changed due to funding opportunities or circumstances that cause a more rapid deterioration of an asset. It serves as a “blueprint” for the future of the community and is a dynamic tool, it is not static.
The adoption of the Capital Improvement Plan is neither a commitment to a particular project nor a limitation to a particular cost. As a basic tool for scheduling anticipated capital projects and capital financing, the CIP is a key element in planning and controlling future debt service requirements. For this reason, the CIP includes some projects where needs have been defined, but specific solutions and funding amounts have not been identified. When adopted, the CIP provides the framework for management and for the Commissioners with respect to rates, bond sales, investment planning, and project planning.