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130 The Practice of Local Go%cernrnc nt Planning I ous cities became bankrupt; and during World War II, when many cities post- poned public improvements,gave a fresh impetus to the careful planning of pub-. lic facilities. Basic concepts of capital improvements programming have come ►' down to the present generally intact. Thus, the capital improvements program (CIP) has become a thoroughly tested, useful planning tool: This quick glance at the history of the CIP needs to be supplemented by an observation: the CIP and land use controls such as zoning and land subdivision regulations evolved at roughly the same time. However, the number of cities that used land use controls grew much more rapidly than the number of cities i that used the CIP. When the planning community was at the crossroads between regulation and budgeting, it took the regulation route and virtually ig- nored the budgetary route. Given modern insights of political science that show the importance of governmental budgeting and decision making, it is evident that the planning community took a crucial turn toward regulation when it should have been moving along both avenues simultaneously. The resulting im- balance in implementation tools has not been corrected even today, except in a few central cities where regulation is no longer as important, and a growing number of suburban communities that are integrating budgetary decision making within growth management systems. Definitions Capital improvements programming is the multiyear scheduling of public physi- cal improvements. The scheduling is based on studies of fiscal resources avail- ;-� able and the choice of specific improvements to be constructed for,a period of five or six years into the future. The capital improvements budget refers to those facilities that are programmed for the next fiscal year. A capital improve- ments program refers to the improvements that are scheduled in the succeeding four or five year period. An important distinction between the capital budget and the capital improvements program is that the one year budget may become a part of the legally adopted annual operating budget,while the longer-term pro- gram does not necessarily have legal significance, nor does it necessarily com- mit a government to a particular expenditure in a particular year. The definition of a capital improvement may be different in different cities. The common definition of a capital improvement includes new or expanded physical facilities that are relatively large size,expensive,and permanent. Some f common examples include streets and expressways, public libraries, water and lsewer lines, and park and recreation facilities. In smaller communities certain expenditures, such as the purchase of a fire engine, may also be considered a capital expenditure. There is an extremely important fiscal planning principle underlying this definition, which is that capital improvements should include only those expenditures for physical facilities with relatively long-term useful- ness and permanence. Capital improvements should not include expenditures for equipment or services that prudent management defines as operating budget items and which ought to be financed out of current revenues. A number of large cities that invented financial "gimmicks" by placing noncapital expendi- tures into the capital budget during the late 1960s and early 1970s found themselves in serious financial difficulties by the late 1970s. The benefits of a CIP An effective capital improvements programming process can lead to many ben- efits to local government. Specifically, the CIP can ensure that plans for com- munity facilities are carried out; can allow improvement proposals to be tested against a set of policies; can better schedule public improvements that require more than one year to construct; can provide an opportunity, assuming funds .4r are available, to purchase land before costs go up: can provide an opportunity �r.