OFFICE OF THE NEW YORK STATE COMPTROLLER

DIVISION OF
LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY

LOCA L GOV ER NMENT M A NAGEMENT GUIDE

MULTI– YEAR
CAPITAL PLANS

Thomas P. DiNapoli
Original Issue Date
SEPTEMBER 2002

Issue Date
MAY 2003
 Table of Contents

Introduction ................................................................................................................... 1

Overview ........................................................................................................................ 1

Part I - Establishing Goals and Objectives ................................................................. 2

Part II - Developing a Comprehensive Policy ............................................................. 2

Part III - Setting Criteria for Capital Projects and Purchases .................................... 3

Part IV - Creating a Multi-Year Capital Plan ................................................................ 4

Part V - Financing Capital Acquisitions ...................................................................... 5

Part VI - Assessing Budgetary Impact ......................................................................... 7

Part VII - Adopting a Capital Plan and Capital Budget ............................................... 7

Part VIII - Monitoring Plan Results .............................................................................. 8

Appendix A - Capital Program (General Municipal Law §99-g) ............................... 10

Appendix B - Questions and Answers ...................................................................... 12

Appendix C - Sample Capital Acquisition Request Form ........................................ 17

Appendix D - Sample Five-Year Capital Plan ............................................................ 19

Appendix E - Other Resources .................................................................................. 21

Where To Call For Help ............................................................................................... 22

Central Office Listing .................................................................................................. 23

 Multi-Year Capital Plans

Introduction

Capital assets, by their very nature, represent a significant commitment of municipal

resources. Their considerable price tags and long lives make capital assets a major
component of every municipality’s operations. To ensure that essential operations
continue uninterrupted, local managers must effectively plan for the acquisition and
replacement of vital capital assets.

Long-term planning for capital asset purchases can provide local officials with other
benefits beyond the assured continuance of municipal services. Proper planning can
improve the quality of those services. By linking a multi-year capital plan to a
concurrent strategic plan, managers can effectively plan for the acquisition of those
assets that will help achieve their government’s strategic goals. Multi-year capital
planning can augment a municipality’s economic development policies. Plans can be
made for infrastructure improvements and other amenities that would make the local
government more attractive to businesses, homeowners and/or tourists. Such
long-range plans would signify a pledge to invest in the community.

Capital planning can also improve a local government’s bottom line. Planning ahead for
these costly purchases can allow managers time to increase the down payment,
thereby lessening the amount to be borrowed and reducing the associated costs. It
also gives managers time to obtain the best purchase price and seek alternative
financing sources (e.g., state and federal aid). Long-term capital plans can also allow
managers to spread the acquisition costs over a number of years so that no one budget
year is overburdened with several capital purchases. Similarly, the planned
replacement of aging assets can prevent costly emergency purchases from inflicting
havoc on operations, budgets and tax rates.

Overview

This chapter will address the process for developing an effective capital asset program.
It will discuss:

• Establishing goals and objectives

• Developing a comprehensive policy
• Setting criteria for capital projects and purchases
• Creating a multi-year capital plan
• Financing capital acquisitions
• Assessing budgetary impacts
• Adopting a capital plan and budget
• Monitoring plan results

Multi-Year Capital Plans - 1

Related information on Capital Planning can be obtained in the following chapters:
Financial Condition Analysis, Budgeting, Capital Assets, Reserves, Debt Management
and Strategic Planning.

I. Establishing Goals and Objectives

A multi-year capital plan is best developed in the context of a larger strategic plan that
spells out a municipality’s mission, goals and objectives. Capital acquisitions should
support the local government’s long-term goals. For example, a municipality’s strategic
plan for water service may include such goals as providing pure, high quality drinking
water to all residents and maintaining water service capacity at levels sufficient to meet
current and future needs. A capital plan should provide the significant assets needed to
accomplish these goals. In the absence of a formal strategic vision, managers should
seek to identify the key objectives of a multi-year capital program.

To develop an effective capital program, information should be sought from a number of

sources. At a minimum, governing board members, department heads, local agencies
and the public should have input into the forming of program objectives. Depending on
the municipality’s anticipated needs and goals, other stakeholders (engineers, lawyers,
business leaders) may also be contacted for input. With enough information, managers
will be able to identify and prioritize capital program objectives for the next several
years.

Generally, identified capital program goals should incorporate improvements in

operational effectiveness and efficiency. Capital acquisitions should be expected to
improve service delivery or some other aspect of quality. Whenever possible, capital
asset managers should plan for improved efficiencies and cost savings.

II. Developing a Comprehensive Policy

Capital program goals and objectives should be included in a formal policy adopted by
the governing board. Such a policy will provide a framework for the local government’s
long-term capital plan. It should address all the implementation aspects of the
multi-year program including:

• Governing board involvement

• Legal ramifications (bidding, borrowing, reserves, etc.)
• Program coordination responsibilities
• Information requirements (content, timing and sources)
• Record-keeping
• Acquisition criteria
• Request process
• Approval process

2 - Chapter 12: Local Government Management Guide

 • Budget information
• Financing
• Program modifications
• Performance measures
• Reporting requirements

Many of these items will be discussed in later sections of this chapter. In general, a
comprehensive policy should address each of these items in detail and in relation to
identified goals and objectives (strategic and programmatic).

III. Setting Criteria for Capital Projects and Purchases

The selection criteria for capital acquisitions should be clearly identified in a policy
document. The policy should list, define and rank the selection criteria in order of
importance so that department heads and others can effectively gauge their requests.
This list (and ranking) should be a direct result of the information gathered when the
program goals and objectives were set.

Although the criteria are largely dependent upon the goals and objectives established
by the municipality, there are a number of areas to consider when evaluating potential
projects and purchases. Some categories to consider include:

• Health and safety impacts - project (or purchase) improves public health or
safety.
• Legal mandates - project is mandated by court or state or federal government.
• Fiscal and budget impact - project impact is favorable for existing costs and
resources.
• Economic development impacts - project supports economic development
goals.
• Leveraging other projects - project is linked to other projects and provides
positive impact, improves results.
• Feasibility - project is realistic, reasonable and supported.
• Savings potential - project improves the bottom line short-term, long-term.
• Environmental, aesthetic or social value - project improves environment,
neighborhoods or community.
• Regional impact - project also benefits other local governments.
• Operational impact - project benefits several departments.
• Mission effectiveness - project contributes directly to achievement of strategic
goals.
• Customer needs - project addresses specific needs/demands for improved
service, timeliness or cost savings.

Multi-Year Capital Plans - 3

 • Time frames - project time frames match funding and operational capabilities.
• Materiality - project costs are acceptable, project costs exceed minimum dollar
amounts established by governing board (costs are within upper and lower
limits).
• Risks - project risks are acceptable/manageable.

Deciding upon which of these categories to use and how they are to be weighted should
be determined by the wishes of the local officials and their constituents.

Ultimately, the benefits identified with a particular project/purchase should be compared

to the total costs, both initial and ongoing. When anticipated costs exceed identified
benefits, managers must decide if the capital acquisition is still justified. To justify a
costly project and move it forward, managers can consider identifying additional
benefits, obtaining additional funding or cutting costs.

As part of project selection, a capital assets policy should outline the review and
approval process. Capital project and purchase requests (meeting selected criteria)
submitted by department heads may require a review by legal, engineering or other
professionals before approval can be granted and the request can become part of the
capital plan and budget. All aspects of major capital acquisitions, identified benefits,
estimated costs and anticipated financing, should be substantiated before final approval
is given. (See Appendix C for a sample department request form.)

IV. Creating a Multi-Year Capital Plan

With clear goals and objectives and well-defined criteria for selecting capital projects
and purchases, the pieces are in place to create a formal multi-year action plan. An
additional step should be performed before the initial capital program is drafted. The
capital plan must be matched to existing capital assets.

If capital asset records do not currently exist, an inventory of the municipality’s assets
should be conducted. An inventory will provide managers with valuable information on
the current condition of capital assets. However, such an inventory can be a significant
(costly) undertaking, especially in larger local governments, and although up-to-date,
capital asset records provide significant managerial benefits (see Capital Assets,
Chapter 4) to get the information needed for developing a capital plan, managers can
consider another option.

4 - Chapter 12: Local Government Management Guide

Local managers can use established goals, objectives and priorities to target their
inventory efforts. If, for example, local officials have decided to improve the quality of
fire protection services, then they can concentrate on inventorying existing fire
protection assets prior to creating a capital plan to help achieve that goal. Managers
should find out what fire protection assets are currently owned and the condition of
those assets. Then they must decide which assets will help them accomplish their
objective. Those assets found to be in poor condition or no longer useful may need to
be replaced, sooner rather than later. These outdated assets may provide trade-in
value or cash. The condition of those fire protection assets deemed to be useful should
also be noted, as their eventual replacement should be planned.

With current information on key capital assets, another piece is in place to create a
formal multi-year action plan. Managers should use the inventory information and
established goals and objectives to prioritize the identified capital projects (and
purchases). The estimated costs assigned to these projects should be verified through
discussions with department heads, purchasing officers, banks, engineers, potential
vendors, state agencies and other local governments. Once accurate price tags have
been attached to each project, funding availability becomes a factor for prioritizing these
projects. All financing sources, state, federal, local and borrowed, should be
determined for the next year and beyond. If some of the projects will require the use of
in-house labor, then staff work loads will also have to be scheduled into the capital plan.

Just like an annual operating budget, a multi-year capital budget can require difficult
decisions. The balancing of limited resources with seemingly unlimited demands. The
good news is that all the groundwork will make the decisions easier and everything
does not have to be accomplished (and paid for) in year one. Within fiscal constraints,
the nature and importance of individual projects will dictate which ones will be
accomplished in year one and which ones will be accomplished in years two, three, four
and beyond.

V. Financing Capital Acquisitions

Capital acquisitions can consume large amounts of financial resources. A multi-year

capital plan helps manage this consumption by scheduling expenditures over a number
of years and by creating a financing plan to meet those expenditures. An effective plan
can give managers the luxury of time. A long-term schedule of capital outlays gives
managers time to arrange for sufficient financing. Time can mean options; and options
can translate into a better deal for the local government.

Multi-Year Capital Plans - 5

Local managers have a number of options for financing capital projects and purchases,
especially when they have several years to arrange for the funding. From local sources
there may be moneys available from fund balances, reserve funds, appropriations,
sales of assets and trade-ins. Through cooperative agreements, there may be moneys
from other local governments. In some cases, funding may come from private sources,
through gifts or donations. State and federal governments may offer grants or
low-interest loans for qualified projects. Government agencies may offer non-cash
assistance through low-cost labor, equipment or professional services. Local
governments may choose to issue debt to finance all or part of a capital project. A good
plan will allow managers to pursue and maximize each of these funding options.

To ensure that the moneys are available when needed for capital purposes, local
managers should consider establishing reserve funds. Through formal resolution, the
governing board can establish reserve funds earmarking resources for the future
acquisition of essential capital assets. For example, these reserve funds may be
funded from available fund balance, appropriations or proceeds from the sale of assets.
(Chapter 5 on Reserves provides guidance on the establishment of capital and other
reserve funds.) The use of such reserve funds would then be listed as a funding
source, where applicable, in a multi-year capital plan.

Similarly, annual funding sources can also be included in the long-term plan. Each
year’s budget may contain provisions for the partial, or total, funding for designated
assets. For example, many larger municipalities provide funding for a certain number of
new police cars in each year’s budget, to be paid for out of current appropriations.
When feasible, this acceptable financing method should be part of a multi-year capital
plan. For those capital items that are replaced regularly, this “pay-as-you-go”
philosophy can provide an equitable and cost-effective financing option. Because
residents are receiving the benefit of new equipment every year, the annual payments
match the benefits received. Because moneys are not borrowed for this equipment,
associated costs are avoided.

Using “other people’s money” to finance capital acquisitions (or any other expenditure)
is probably a favorite option of many public managers. Donations and grants are at the
head of any financing “wish list”. Municipal cooperative arrangements could be a
second choice depending on the particular terms (conditions), often subject to
negotiation. Borrowed moneys and lease-purchases (where authorized) might be the
last choices, again depending on the financing terms. (See also Chapter 10 on Debt
Management.) Public managers should exhaust this list of external financing options
when developing a long-term capital plan. Ideally, each one of these funding options
should be included in a comprehensive capital plan.

6 - Chapter 12: Local Government Management Guide

VI. Assessing Budgetary Impact

The acquisition of capital assets can have a significant impact on subsequent operating
budgets. This impact should be considered as part of any multi-year capital plan. All
areas of the budget should be assessed, operating expenditures, debt and revenues.

When estimating the impact of capital purchases on annual expenditures, consider

potential cost savings as well as new operating costs. Depending on the criteria (e.g.,
improved efficiency) used to select each project, some acquisitions should generate
cost savings. Even if the project wasn’t selected for money-saving reasons, the fact
that new equipment is replacing old equipment usually means that less money will be
needed for maintenance and repair. These savings should be quantified and figured
into annual operating budgets. Those capital acquisitions supporting new or expanded
services may require new supplementary expenditures. For example, the completion of
a new public swimming pool may mean new budget line items for staff wages and
benefits, pool supplies, electricity, etc. These types of items should be planned for in
the multi-year plan.

If moneys were borrowed to finance all, or part, of a capital acquisition, the principal and
interest payments to retire the resulting debt must be planned for in each year’s budget
for the life of the obligation. Similarly, periodic lease-purchase payments must be
accounted for in the capital plan.

For those capital assets intended to be income producers, estimated revenues may be
included in multi-year plans. These revenues should be conservatively estimated to
avoid unpleasant surprises if shortfalls occur. Again, using the swimming pool example,
if fees will be collected for use of the pool, include an estimate of these revenues in the
capital plan. In effect, these revenues can help offset the additional costs identified
earlier. All this information can help local officials better manage municipal assets.

VII. Adopting a Capital Plan and Capital Budget1

Once all aspects of the plan (goals, policies, criteria, needs, finances, and costs) have
been addressed, the capital plan can be formalized. (See Appendix D for a sample
5-year capital plan.) The capital plan should be approved and the annual budget,
including capital components, formally adopted by the governing board. To assist this
process, a document that describes the proposed program and budget should be
developed. This document should describe the preliminary program and capital portion
of the budget to the governing board, citizens, and other interested parties. It should
convey relevant information about the capital program clearly so that all interested
parties can respond effectively to the proposed capital priorities. The proposed capital
plan should also be circulated for public input. This will allow public interest groups,

1
As used in this chapter, a capital budget is a plan of proposed capital outlays and the means to finance them for the current fiscal
year. It is part of the current budget, and adopted with the regular operating budget.

Multi-Year Capital Plans - 7

business leaders, and community residents to review program priorities and to voice
any concerns. Some adjustment to the plan may be necessary to reflect any citizen
response. Then the governing board can: approve the multi-year capital program,
legally adopt the capital portion of the budget (i.e., the first year of the capital program)
and arrange the funding for the capital budget. This legislative action does not extend
beyond the first year of the capital program and must be renewed each year. The out
years of the program serve as planning years only.

A municipality can decide to adopt its capital plan pursuant to General Municipal Law
§99-g (see Appendices A and B). This statute outlines responsibilities and the
procedures to be followed, and once adopted must be adhered to so long as the capital
program remains in effect. As an alternative, local officials can merely refer to the
statute for additional guidance on developing their own plan and procedures.

VIII. Monitoring Plan Results

A plan is only as good as its results. Follow-up is essential to determine if capital

program goals are being met. Also, routine monitoring of approved capital projects
helps to ensure that projects remain on schedule and within budget. Asset performance
and budget information should be tracked and communicated to interested parties in a
timely manner. Similarly, relevant external factors should be monitored and reported.
Annually, the capital program should be updated to prepare the capital budget and to
modify the multi-year plan as conditions change.

Just like any budget, a function of the capital budget is to help control expenditures.
Spending limits are set by the governing board through the adoption of the capital
budget and through the authorization of individual capital projects. Board members and
other managers should be kept apprised of capital spending-to-date versus approved
amounts. Where cost overruns are anticipated, the board should act to control
spending or modify the budget.

Asset performance should also be evaluated. Over time, have the capital purchases
and projects produced the expected results? Have long-term goals been met? Are
changes necessary? Managers must be able to answer these questions. (See also
Chapter 4 on Capital Assets.) They will need an information system that allows them to
monitor performance.

Local officials should monitor the external environment to help them anticipate changes
that might impact the later years of the capital program. Changes in technology or
equipment can make portions of the plan obsolete. Changes in anticipated state and
federal funding can impact the number and priority of planned projects. Circumstances
may change within the municipality that directly affect the needs of the community.
Citizen input may signal a change in direction. Managers should be aware of these
external factors, and others, that can and should change the focus of strategic and
capital plans.

8 - Chapter 12: Local Government Management Guide

At a minimum, the multi-year capital plan should be reviewed annually. As the current
year passes and projects are completed (or not), the needs of the next year come more
into focus. Year four is now year three, year three is now year two, and so on. Vague
long-term goals and objectives are coming closer to reality. Initial work may need to be
started (and funded), for a project to be completed two years hence. A new budget will
have to be developed and approved for the upcoming fiscal year.

Finally, after the initial capital plan has been completed and projects are underway, a
review of the planning process should be undertaken to determine whether changes
should be made to improve the process. This step is particularly important for
governments developing a capital program for the first time. All participants in the
planning process should provide input as to what aspects of the process have worked
well and what aspects should be modified.

Multi-Year Capital Plans - 9

 APPENDIX A

Capital Program (General Municipal Law §99-g)

Many municipalities have adopted a formal plan for capital asset acquisitions in
accordance with the provisions of Section 99-g of the General Municipal Law, or may
choose to do so in the future. This statute outlines responsibilities and the procedures
to be followed, and once adopted must be adhered to so long as the Capital Program
remains in effect.

The nine major points of section 99-g are:

1. Any municipal corporation, by resolution or ordinance (note: villages no

longer possess ordinance power) of the governing board, may undertake
the planning and execution of a capital program in accordance with the
provision of section 99-g.

2. A capital program shall be a plan of capital projects proposed to be

undertaken during a six-year period, the estimated cost thereof and the
proposed method of financing.

3. The officer charged with the preparation of the tentative budget shall
annually cause the capital program to be prepared, and shall submit it to
the governing board with the tentative budget. It shall be arranged in such
manner as to indicate the order of priority of each project, and to state for
each project:

(a) A description of the proposed project and the estimated total cost
thereof;

(b) The proposed method of financing, indicating the amount proposed

to be financed by direct budgetary appropriation or duly established
reserve funds; the amount, if any, estimated to be received from
the federal and/or state governments; and the amount to be
financed by the issuance of obligations, showing the proposed type
or types of obligations, together with the period of probable
usefulness for which they are proposed to be issued;

(c) An estimate of the effect, if any, upon operating costs of the

municipal corporation in each of three fiscal years following
completion of the project.

10 - Chapter 12: Local Government Management Guide

4. The tentative budget shall include the amount proposed for the capital
program to be financed by direct budgetary appropriation during the fiscal
year to which such tentative budget pertains.

5. There shall be included in the budget message, if any, a general summary

of the financial requirements for the capital program for the fiscal year to
which the budget message relates. Additional comments and
recommendations of any other board, officer or agency may also be
included in the budget message.

6. The governing board shall annually adopt the capital program after review
and revisions, if any. The provisions of any law relating to a public hearing
on the tentative budget, and to the adoption of the budget, shall apply to
the capital program.

7. At any time during the fiscal year for which the capital program was
adopted, the governing board by the affirmative vote of two-thirds of its
total membership, may amend the capital program by adding, modifying
or abandoning the projects, or by modifying the methods of financing. No
capital project shall be authorized or undertaken unless it is included in
the capital program as adopted or amended.

8. The term “capital project” as used in section 99-g shall mean: (a) any
physical betterment or improvement, including furnishings, machinery,
apparatus or equipment for such physical betterment or improvement
when first constructed or acquired, (b) any preliminary studies and
surveys relating to any physical betterment or improvement, (c) land or
rights in land, or (d) any combination of (a), (b), and (c).

9. Nothing in section 99-g shall be construed to authorize a municipal

corporation to incur indebtedness for which obligations may be issued
except as provided by the Local Finance Law.

Multi-Year Capital Plans - 11

 APPENDIX B

Questions and Answers

Capital Plans Using General Municipal Law §99-g

Q. In order to have a multi-year capital plan, must the municipality adopt by

resolution or ordinance the provisions of Section 99-g of the General Municipal
Law?

A. No. Municipalities can develop their own procedures and time frame for their
individual multi-year capital plan.

Q. If the capital plan your municipality adopts is in accordance with Section 99-g of
the General Municipal Law, can it be for a five (5) year period?

A. No. All provisions of Section 99-g must be adhered to including the requirement
for a six (6) year plan.

Q. How do you determine the effect upon operating costs for the three (3) year
projection to be included in a capital plan?

A. You should estimate total cost of operation and maintenance (expenditures

incurred only because of the existence of the capital asset) and then deduct the
total of all program-generated revenues (moneys that are received solely due to
existence of capital asset). This should be done for each year and in total.

Example - Swimming pool constructed and operated as part of Recreation

Program.

Estimated operation and maintenance (O & M) cost:

.01 Personal Services (Director, lifeguards, etc.) xxx

.04 Contractual Expenditures (Supplies & materials, etc.) xxx
.08 Employee Benefits xxx
.06 and .07 Principal and Interest - Swimming Pool Debt
Service xxx
TOTAL O & M xxxx

12 - Chapter 12: Local Government Management Guide

 Estimated Program Generated Revenues:
User Charges xxx
Gifts and Donations xxx
Contributions - Other Governments xxx
TOTAL REVENUES xxxx

Net Cost - Excess O & M. over Revenues

(Excess Revenues over O & M.) xx

Q. What, if any, is the advantage of adopting a Capital Program pursuant to Section

99-g of the General Municipal Law?

A. The basic management concept of a capital program is dictated by the statute

itself. However, some boards may feel that a mandated six-year plan and a
requirement for a 2/3 vote to approve amendments to the plan is overly
cumbersome from an administrative viewpoint and, therefore, is a disadvantage.

Q. May a capital program, adopted pursuant to Section 99-g of the General

Municipal Law, be amended during a fiscal year by majority vote?

A. No. Section 99-g specifically requires a two-thirds vote to add, modify or

abandon projects or change the method of financing them. Adherence to this
and all other requirements of this statute is mandatory once adopted.

All Capital Plans

Q. After the governing board has formally adopted its capital plan, is it still
necessary to observe the competitive bidding requirements of Section 103 of the
General Municipal Law?

A. Yes. All state and local statutes, including Section 103, must be followed. In
addition, any special provisions of state or federal grants and specific trusts must
be observed.

Q. Do you need a capital reserve fund before you have a capital plan, or vice-versa?

A. A capital reserve fund may be established as a future financing source for capital
acquisitions under a capital plan, but there is no requirement that management
do so.

Even if your municipality deems it unnecessary to develop and adopt a capital

plan, they may establish a capital reserve pursuant to Section 6-c of the General
Municipal Law.

Multi-Year Capital Plans - 13

 Q. Who may or should submit suggestions for capital improvements or equipment
to be included in the capital plan?

A. Department heads, other officials and employees, civic groups and interested
individuals should be encouraged to submit written requests for items to be
included in the capital plan. Suggestions should be submitted using a standard
format, approved by the governing board, to ensure that all necessary
information is provided. The requests should be forwarded to a capital planning
coordinator for processing and review.

Q. Who initially should evaluate the requests and supporting documentation?

A. A capital planning coordinator should be designated to initially review requests to

determine that they contain all required information. A coordinator should
substantiate the facts contained in the request prior to submission to a review
committee.

A review committee should evaluate each request in terms of the goals and
needs of the municipality, project criteria, estimated total cost for acquisition and
maintenance, and availability of financial resources.

Q. After a review committee evaluates the individual requests, what happens?

A. A capital planning coordinator should prepare the multi-year capital plan. The
projects making up the plan should be arranged in order of priority based on
relative urgency and merit. This priority should be established both by year of
the plan and within the individual years.

Q. What is the minimum required information for a capital plan?

A. The description of the particular capital improvement or equipment should be

sufficient to permit anyone to understand what the particular item is. In addition,
the estimated acquisition cost, the proposed method of financing and both the
annual and the total net operating cost, for the program period should be shown.

Q. Where can information needed to evaluate individual requests be obtained?

A. It most likely will be necessary to obtain the estimated amounts and

miscellaneous information from other departments (such as finance, planning,
budget, engineering, purchasing, legal, etc.).

Q. When is the capital plan adopted?

A. Normally, the capital plan is adopted at the same time as the budget.

14 - Chapter 12: Local Government Management Guide

Q. What is the relationship of the capital plan to the annual operating budget?

A. The first year of the multi-year plan would serve as the annual capital budget.
Appropriations for capital projects are provided in the operating budget only for
that portion to be financed from current revenues or surplus. That portion of a
project to be financed through the issuance of obligations would not appear in
the operating budget. The capital budget provides the details to support the
operating budget appropriations.

Q. Must the budgetary appropriations for a capital plan be transferred to the capital
projects fund?

A. If the capital improvement or equipment is to be financed entirely by budgetary

appropriations it is not necessary. The expenditures can be reflected in the
operating fund where budgeted. To prevent a lapsing of the unexpended balance
at year-end, an encumbrance could be recorded for purchase orders issued,
contracts let or restricted unobligated balance (e.g. CHIPs projects).

If issuance of obligations or a capital reserve is involved you must transfer the

amount provided by budgetary appropriations to the capital project fund.

Q. How is a non-section 99-g capital plan amended?

A. At any time after the adoption of the capital plan, the governing board may
amend the plan by a majority vote.

This should not be confused with revisions that may be made each year when
the capital plan is being prepared, and prior to its adoption.

Q. What affect does a repair reserve fund have on a capital plan?

A. Repair reserve funds can greatly influence when capital assets will be replaced.
Utilizing a repair reserve fund may increase the useful life of a capital asset,
which might delay its replacement date. For example, repairing the engine in a
dump truck may permit using the asset for several years longer than expected.
Thus, by making a relatively small expenditure a major capital outlay is
postponed.

Q. Should the capital needs of a town or county improvement district be included in

a capital plan?

A. Yes. The entire capital needs of the municipality should be included in the
capital plan.

Multi-Year Capital Plans - 15

 Q. Should a joint municipal capital improvement project be included in the capital
plan of each of the municipalities involved?

A. Yes. Each municipality should include a joint capital project in their capital plan.
Each municipality, in addition to disclosing their proportionate share of the project
and means of financing, should also disclose the total cost of the project and the
share of the other municipality. This may be accomplished by including the other
municipality’s cost in the text of the capital plan or as a footnote to the capital
plan.

16 - Chapter 12: Local Government Management Guide

 APPENDIX C
Capital Acquisitions Request

Department: ____________________________ Requested By: ________________

Project Title: ____________________________

Description: ___________________________________________________________

___________________________________________________________

Date Needed: ____________ Lead Time: _______________

Anticipated
Benefits: ___________________________________________________________

__________________________________________________________

Estimated Initial: _________________

Costs: Annual: _________________ Year 1
_________________ Year 2
_________________ Year 3
_________________ Year 4
_________________ Year 5
Cost
Support: ___________________________________________________________

Resource Municipal Employees ___________

Needs: Legal ___________
Engineering ___________
Other ___________

Suggested
Sources: ___________________________________

Suggested
Financing: ___________________________________

Board
Action: ___________________________________ Project # ______

Multi-Year Capital Plans - 17

Capital Acquisitions Request:

Department: Name of department requesting capital project or purchase

Requested By: Signature of person authorized to make request

Project Title: Brief description of project or purchase

Description: Detailed description of project or purchase (attach specs)

Date Needed: Date expected to be put in operation

Lead Time: Time needed to acquire asset and put into operation

Anticipated Benefits: Selection criteria met by the project or purchase

Estimated Costs: Initial costs to acquire and make asset operational plus
annual costs to operate and maintain asset

Cost Support: Basis for figures included for initial and annual cost
estimates

Resource Needs: Estimated staff time needed to acquire asset and make
operational

Suggested Sources: State or county contracts, other local governments, outside

vendors, etc.

Suggested Financing: Grants, appropriations, reserves, borrowing, sales of assets,

etc.

Board Action: Approved, Rejected, Postponed, Need more information,

etc.

Project #: Project rank and year for capital plan purposes

(e.g., 10-2003)

18 - Chapter 12: Local Government Management Guide

 Total Prior Current Annual
Fd Description Cost Years Year 20X2 20X3 20X4 20X5 Balance Costs

A Police Cruisers $100,000 $25,000 $25,000 $25,000 $25,000 0

H Ladder Truck 175,000 $175,000 0 $ 8,000

D Highway Storage Barn 45,000 $45,000 0 $ 2,000

D Smith Street Paving 30,000 30,000 0 0

D Bulldozer 75,000 $75,000 0 $ 1,500

$425,000 $25,000 $75,000 $25,000 $75,000 $25,000 $175,000 $25,000 $11,500

Total

FUNDING:
20X1 – 20X5

Appropriations $110,000 $20,000 $30,000 $20,000 $20,000 $20,000 $11,500

APPENDIX D

In-House Labor 5,000 5,000

Five-Year Capital Plan

Fund Balance 0
Reserve Funds 190,000 40,000 75,000 75,000
Federal/State Aid 20,000 5,000 5,000 5,000 5,000
Borrowings 100,000 100,000
Other 0
$425,000 $25,000 $75,000 $25,000 $75,000 $25,000 $175,000 $25,000 $11,500
Total

Multi-Year Capital Plans - 19

Five-Year Capital Plan:

Fd Fund where capital project or purchase will be charged

(accounted for)

Description Brief description of project or purchase

Total Costs Total estimated costs to acquire capital asset

Prior Years Costs of project or purchase incurred prior to current year

Current Year Costs expected to be incurred in ensuing year’s budget

20X2,3,4,5 Costs expected to be incurred in future budgets

Balance Costs expected to be incurred beyond five years

Annual Costs Costs for debt service, insurance, maintenance, fuel, etc.,
expected to be incurred in fund’s operating budget

Funding Expected methods of financing capital acquisitions

Appropriations Appropriations from operating budgets

In-House Labor Project work performed by municipal employees

Fund Balance Appropriation of available fund balance

Reserve Funds Moneys legally set aside for capital purposes

Federal/State Aid Grants or aid from state or federal government

Borrowings Proceeds of bonds or notes, lease-purchase agreements

Other Sources such as trade-ins, gifts, donations,

intergovernmental fees, new revenues (generated by the
acquired asset) etc.

20 - Chapter 12: Local Government Management Guide

 APPENDIX E

Other Resources

There are several sources of additional information on multi-year capital plans including
local colleges and universities. Also, many local governments have been using these
long-term management tools for some time and could provide valuable information on
putting such a plan in place.

On the web, some sites to consider are:

Government Finance Officers Association www.gfoa.org

Office of Management and Budget www.omb.gov

Our regional offices can also provide assistance. See the listings on the next page for the
office in your area.

Multi-Year Capital Plans - 21

 Office of the New York State Comptroller
Division of Local Government and School Accountability

Central Office Directory

(Area code for the following is 518 unless otherwise specified)

Executive ..........................................................................................................................................................................................................474-4037
Steven J. Hancox, Deputy Comptroller
John C. Traylor, Assistant Comptroller

Audits and Local Services ......................................................................................................................................................................... 474-5404

(Audits, Technical Assistance)
Electronic Filing
Questions Regarding Electronic Filing of Annual Financial Reports ...........................................................................474-4014
Questions Regarding Electronic Filing of Justice Court Reports .................................................................................. 486-3166
Financial Reporting ......................................................................................................................................................................................474-4014
(Annual Financial Reports, Constitutional Limits, Real Property Tax Levies, Local Government Approvals)
Information Services ...................................................................................................................................................................................474-6975
(Requests for Publications or Government Data)
Justice Court Fund ....................................................................................................................................................................................... 473-6438
Professional Standards ............................................................................................................................................................................. 474-5404
(Auditing and Accounting)
Research ............................................................................................................................................................................................................473-0617
Statewide and Regional Projects.................................................................................................................................................. 607-721-8306
Training.............................................................................................................................................................................................................. 473-0005
(Local Official Training, Teleconferences, DVDs)

New York State Retirement System

Retirement Information Services
Inquiries on Employee Benefits and Programs...................................................................................................474-7736
Bureau of Member Services .....................................................................................................................................................474-1101
Monthly Reporting Inquiries .....................................................................................................................................474-1080
Audits and Plan Changes ............................................................................................................................................474-0167
All Other Employer Inquiries .....................................................................................................................................474-6535

Division of Legal Services

Municipal Law Section ..............................................................................................................................................................474-5586

Other OSC Offices

Bureau of State Expenditures ...............................................................................................................................................486-3017
Bureau of State Contracts ....................................................................................................................................................... 474-4622

Office of the State Comptroller, 110 State St., Albany, New York 12236
Mailing Address
(Zip Code for Retirement System is 12244)
for all of the above:
email: localgov@osc.state.ny.us

w w w.osc.state.ny.us
RMD20

22 - Chapter 12: Local Government Management Guide

 Office of the New York State Comptroller
Division of Local Government and School Accountability

Regional Office Directory

Steven J. Hancox, Deputy Comptroller (518) 474-4037
Cole H. Hickland, Director - Direct Services (518) 474-5480
Jack Dougherty, Director - Direct Services (518) 474-5480

ALBANY REGIONAL OFFICE – Kenneth Madej, Chief Examiner

22 Computer Drive West • Albany, New York 12205-1695
Tel (518) 438-0093 • Fax (518) 438-0367 • Email: Muni-Albany@osc.state.ny.us
Serving: Albany, Columbia, Dutchess, Greene, Schenectady, Ulster counties

BINGHAMTON REGIONAL OFFICE – Patrick Carbone, Chief Examiner

State Office Building, Room 1702 • 44 Hawley Street • Binghamton, New York 13901-4417
Tel (607) 721-8306 • Fax (607) 721-8313 • Email: Muni-Binghamton@osc.state.ny.us
Serving: Broome, Chenango, Cortland, Delaware, Otsego, Schoharie, Sullivan, Tioga, Tompkins counties

BUFFALO REGIONAL OFFICE – Robert Meller, Chief Examiner

295 Main Street, Room 1050 • Buffalo, New York 14203-2510
Tel (716) 847-3647 • Fax (716) 847-3643 • Email: Muni-Buffalo@osc.state.ny.us
Serving: Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans, Wyoming counties

GLENS FALLS REGIONAL OFFICE – Karl Smoczynski, Chief Examiner

One Broad Street Plaza • Glens Falls, New York 12801-4396
Tel (518) 793-0057 • Fax (518) 793-5797 • Email: Muni-GlensFalls@osc.state.ny.us
Serving: Clinton, Essex, Franklin, Fulton, Hamilton, Montgomery, Rensselaer, Saratoga, Warren, Washington counties

HAUPPAUGE REGIONAL OFFICE – Richard J. Rennard, Chief Examiner

NYS Office Building, Room 3A10 • Veterans Memorial Highway • Hauppauge, New York 11788-5533
Tel (631) 952-6534 • Fax (631) 952-6530 • Email: Muni-Hauppauge@osc.state.ny.us
Serving: Nassau, Suffolk counties

NEWBURGH REGIONAL OFFICE – Christopher J. Ellis, Chief Examiner

33 Airport Center Drive, Suite 103 • New Windsor, New York 12553
Tel (845) 567-0858 • Fax (845) 567-0080 • Email: Muni-Newburgh@osc.state.ny.us
Serving: Orange, Putnam, Rockland, Westchester counties

ROCHESTER REGIONAL OFFICE – Edward V. Grant Jr., Chief Examiner

The Powers Building • 16 West Main Street – Suite 522 • Rochester, New York 14614-1608
Tel (585) 454-2460 • Fax (585) 454-3545 • Email: Muni-Rochester@osc.state.ny.us
Serving: Cayuga, Chemung, Livingston, Monroe, Ontario, Schuyler, Seneca, Steuben, Wayne, Yates counties

SYRACUSE REGIONAL OFFICE – Eugene A. Camp, Chief Examiner

State Office Building, Room 409 • 333 E. Washington Street • Syracuse, New York 13202-1428
Tel (315) 428-4192 • Fax (315) 426-2119 • Email: Muni-Syracuse@osc.state.ny.us
Serving: Herkimer, Jefferson, Lewis, Madison, Oneida, Onondaga, Oswego, St. Lawrence counties

Need Help? Technical Assistance is available at any of the Regional Offices above.

w w w.osc.state.ny.us

Multi-Year Capital Plans - 23

 New York State
Office of the State Comptroller
Division of
Local Government and School Accountability
110 State Street, 12th Floor • Albany, New York 12236