General Information
Riner gets an extension on their fire station; Shawsville and Elliston, a new high school; and the county administration, an e-government website and a geographic information system (GIS). Who makes these spending decisions; how are they made; and how do we pay for them? The answers lie in the County’s capital improvements program (CIP). We all create capital improvement programs when we buy an existing house and start planning the changes and additions we would like to make over a period of years. We may decide to landscape the front yard next summer, build a garage in three years, and add an addition in five years. The changes and additions we make require both planning and budgeting. As the name implies, the CIP deals solely with county expenditures directly related to public facilities (structures, parks, technology, equipment). According to the county’s definition, a capital project is one that has a minimum life span of five years, costs more than $50,000, and is neither maintenance related nor a fleet vehicle). The CIP allows the Montgomery County to track the distribution of public resources, address issues surrounding the equitable distribution of public facilities, and guide growth and change by anticipating future needs. Departments provide grant applications for the facilities they believe are needed over the next five years; the technical review committee evaluates these grants based on a set criteria and makes a recommendation to the Montgomery County Planning Commission. The Planning Commission, in turn, makes a recommendation to the Board of Supervisors. In addition to the planning process, the CIP includes an extensive budgeting process. Each year, Montgomery County produces two budgets: the general operating budget and the capital budget. The capital budget includes the specific plans for the next fiscal year’s capital improvements, a five year plan for future improvements, and a fiscal plan which details how the county intends on securing the funds for the capital improvements and servicing the required debt. Copies of both budgets can be viewed on the Montgomery County website (www.montva.com) or obtained from the County’s Finance Department.
Each department or area of service in the Montgomery County government assesses their own needs. For example, Parks and Recreation looks at their current facilities and may decide they need to expand the number of parks in the county. Facility decisions are based on levels of service (LOS) standards, on perceived needs, or, in some cases, on additional requirements imposed by state or federal level regulations: eg., bringing a facility up to Americans with Disabilities Act (ADA) standards and requirements. Generally, CIP projects fall into four categories: 1) improvements of government facilities (i.e. school improvements, such as the installation of HVAC systems or upgrading Mid-County Park to make it ADA compliant; 2) construction of new government facilities (i.e. the new government center, a new solid waste collection center, or design and construction of a new park); 3) large scale, technology based projects (i.e. the e-government website or the county’s GIS); 4) fire and rescue equipment and vehicles. In general, fleet vehicles (including school buses) and water and sewer projects are outside of the scope of the CIP. Projects, at a minimum, must cost more than $50,000, and must have a minimum useful life of 5 years. Maintenance costs have been shifted from the CIP budget to the Operating Budget, so costs related to maintenance and operations are no longer part of the CIP; however, when departments apply for CIP funds, they must account for the project’s impact on the Operations budget, including the costs of maintenance and personnel.
For departments, there is a fine line between maintenance and upgrade. While the CIP process does not allow for maintenance costs to be included in CIP requests,, upgrade costs may be included. This is especially true when the needed upgrade is connected to either external regulations (adding ramps in order to bring a building into compliance with the ADA) or when a new aspect is being added to an existing facility (a new structure in an existing park). In addition, departments can not group projects. For example, if a department needs three identical items, which individually cost less than $50,000, they can not combine the items in a single request in order to meet the cost threshold. Again, under the county guidelines for the CIP, items costing less than $50,000 should be included in the operating budget. The exception to this rule is when a project initially requires multiple parts in order to work. For example, in creating the Montgomery County e-government project, the county not only had to have the site designed and programmed, but they also needed to buy additional software and hardware in order for the web project to fully function. Once a department has established a list of needs, they must fill out a CIP grant application. The application requires detailed information, including a project description, a statement of need or justification, a project impact statement, a timeline, a proposed budget, and a operation cost impact budget. The grants are delivered to the Planning Department, and from there they go through the technical review process, the budgeting process, and finally, the public hearings before the Planning Commission and the Board of Supervisors.
The Montgomery County CIP technical review committee is made up of the Director of Planning, the Director of Finance, the County Engineer, the Montgomery County Public Schools’ Facilities Director, and a representative from Fire and Rescue. In addition, the committee is staffed by one of the county planners and by the county’s program analyst. The the committee is designed to achieve the most thorough review of the proposed projects possible by relying on the expertise of the members. Prior to scoring and ranking the individual projects, the technical review committee examines each project and listens to presentations by the individual departments. The presentations give the departments a chance to make a stronger case for their proposed projects and provides the technical review committee a chance to ask question about issues that may not have been addressed in the initial proposal. The committee uses a numeric scoring method to insure that each project is thoroughly reviewed during the ranking process. First, under the state guidelines, all capital improvement projects must be in compliance with the Montgomery County Comprehensive Plan. This means that the proposed project must do two things: 1) match with the goals, objectives, or strategies specifically stated in the comprehensive plan; and 2) fit with the landuse designation (Urban, Rural, Urban Expansion, Rural Expansion) on the comprehensive plan map. A few projects, like the county’s GIS, are exempt from the map portion of the requirement because their construction and implementation do not directly impact their physical surroundings or change existing landuse. In addition to the state mandated comprehensive plan requirement, the technical review committee also looks at nine other key features: 1) public health or safety; 2) urgent need; 3) positive or negative impact on the operating budget; 4) fulfilling a legal requirement; 5) environmental impact; 6) project’s readiness; 7) impact on economic development and increased private capital investment; 8) percentage of the population served; 9) availability of financing, including outside revenue sources; 10) life expectancy of the project; 11) departmental priority. A total of 87 points are possible, although most projects, thus far, have scored between 30 and 60 points. The committee ranks the projects based on their scores, information garnered from presentations and additional information packets provided by the individual departments, and any information available concerning the urgency and readiness of the project to proceed. Projects which rank between 1 and 31 are included on the list of “fundable projects;” those scoring above 16 are considered the most critical and are more likely to receive specific funding during the course of the five year CIP cycle.
When the county develops a proposed financing plan for the CIP, they consider three primary factors: 1) whether the plan complies with the thresholds set forth in the county’s financial policies; 2) whether they can accommodate the top sixteen (16) projects, identified as urgent, within the five year CIP time frame; and 3) the impact of prior authorized commitments (for example, school roof projects). Project ranked below 16 and/or were determined to be outside of the county’s current Financing Plan were designated as “future projects.” While they were added to the list of potential capital improvements, they received no specific funding during the five year funding cycle, although funding may be granted at a future date. Montgomery County uses a variety of methods to pay for capital improvements, including: the issuance of new bonds, the earmarking of existing bond proceeds (1999 C Bonds), transferring of monies from the General Fund, and use of surplus funds from prior years. Regardless of the method of funding chosen, decisions on capital expenditures are made following a careful determination of the county’s debt capacity and ratio and the cost of debt service. Additional information on the budgeting process and debt management are included in the annual capital budget.
©Montgomery County Department of Planning &
Inspections
Last Updated: 26 October, 2002
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