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VI. CAPITAL IMPROVEMENTS <br />The demand for services and the cost of building and maintaining the City’s infrastructure continues to <br />increase. No City can afford to accomplish every project or meet every service demand. Therefore, a <br />methodology must be employed that provides a realistic projection of community needs, the meeting of <br />those needs, and a framework to support City Council prioritization of those needs. <br />Capital improvements include the scheduling of public improvements for the community over a five-year <br />to ten-year period and take into account the community’s financial capabilities as well as its goals and <br />priorities. A “capital improvement” is defined as any major nonrecurring expenditure for physical <br />facilities of government. Typical expenditures are the cost of land acquisition, construction of roads, <br />utilities, parks, vehicles and capital equipment. Capital improvements are directly linked to goals and <br />policies, land use, community needs and sections of the Comprehensive Plan. <br />Development Process: <br />Staff will comprise, prioritize, consolidate and recommend Capital Improvement Projects. <br />Devise proposed funding sources for proposed projects. Recommended funding sources will be <br />clearly stated for each project. <br />Analyze debt service related to new projects. Each project, when applicable, will include its <br />separate impact on the tax levy and/or utility charges as well as its total dollar cost. <br />Project and analyze total debt service related to the total debt of the City. <br />A debt study will be provided summarizing the impact of the project, review of the revenues and <br />proposed debt. <br />The City Council will evaluate all proposed Capital Improvements and decide on the following: <br />Project Prioritization <br />Funding Source <br />Acceptable Financial Impact on Tax Levy, Total Debt, or Utility Rate Levels. <br />VII. DEBT MANAGEMENT <br />The use of borrowing and debt is an important and flexible revenue source available to the City. Debt is a <br />mechanism, which allows capital improvements to proceed when needed, in advance of when it would <br />otherwise be possible. It can reduce long-term costs due to inflation, prevent lost opportunities, and <br />equalize the costs of improvements to present and future constituencies. <br />Debt management is an integral part of the financial management of the City. Adequate resources must <br />be provided for the repayment of debt, and the level of debt incurred by the City must be effectively <br />controlled to amounts that are manageable and within levels that will maintain or enhance the City’s <br />credit rating. A goal of debt management is to stabilize the overall debt burden and future tax levy <br />requirements to ensure that issued debt can be repaid and prevents default on any municipal debt. <br />Policy Statement: <br />Wise and prudent use of debt provides fiscal and service advantages. Overuse of debt places a burden on <br />the fiscal resources of the City and its taxpayers. The following guidelines provide a framework and limit <br />on debt utilization: <br />76