09-26-2007 Council Agenda - Laserfiche WebLink

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VII. Capital Budgets Purpose: The City is committed to long -term capital planning to ensure that expenditures can be made to add or replace capital items when needed, without significant fluctuations in the property tax levy. Capital budgeting will enable the City to maintain a stable property tax rate, prevent peaks and valleys in its debt retirement program, and establish and thereafter improve its credit rating. The City's Capital Funds include: • General Capital Improvement Fund • 10% Fund • Infrastructure Fund • Park Land Acquisition Fund • Water /Sewer Capital Replacement Fund Policy: The City's capital planning process will include five -year capital budgets including funding sources. The capital budgets will identify current and projected costs for all capital items, including such things as facilities, major building repairs, infrastructure improvements and replacements, furniture, fixtures and equipment, vehicles and technology. It will include all purchases with a combined value of $5,000 or more and a life expectancy of five years or more. Development of the five -year capital plans will be coordinated with the annual operating budget process, allowing capital expenditures and applicable operating costs for the most current year of the capital plans to be incorporated as part of the City's annual operating budget. The remaining four years of the capital plans will be used to identify and schedule future capital expenditures that may be necessitated by such things as planned development or wear and tear of existing municipal facilities. During the annual budget process the City Council will evaluate proposed capital improvement projects based on the acceptability of funding sources and the financial impact on the City's tax levy, total debt and utility rate levels. The following considerations and procedures will be used to comply with this policy: • The City will maintain all its assets at a level adequate to protect the City's and its citizens'capital investment and to minimize future maintenance and replacement costs. • The City will develop a multi -year plan for capital improvements and update it annually. • The City staff will identify the estimated cost and potential funding sources for each capital project proposal before it is submitted to the Council for approval and in that process will determine the most effective financing method for the proposed project. • The City will make an annual transfer of depreciation charges within the Water and Sewer Funds to the Water and Sewer Capital Replacement Fund according to policy set forth in Appendix D. • The City will make capital improvements in accordance with the adopted capital improvement budget for the current year, or as it is amended by the Council. Capital purchases, not otherwise funded through an approved budget, shall require City Council 7