Capital planning

Capital Planning is the responsibility of the Town Administrator who is assisted by the Town's Financial Team that includes the Town Accountant, Town Treasurer, Principal Assessor, Purchasing Agent, and the Tri-Town Union Director of Finance & Human Resources. The process used for capital planning follows the basic format contained in the manual developed by the Massachusetts Department of Revenue to assist communities in developing Capital Plans. In addition to the manual, the Team also is obligated to adhere to the guideline established by the Finance Committee for Capital Expenditures. For FY2011, the guideline is $100,000.

FY 2011 PROCESS

In September of 2009, the team distributed to each Board, Department, and Committee involved in capital planning a memo requesting submission of capital projects, together with the following forms:

  1. A Capital Facilities Inventory Form,
  2. An Equipment Inventory Form,
  3. A Capital Project Request Form,
  4. And a Capital Equipment Purchase or Lease Form.

The team generally defined capital requests as:

  1. Purchases of equipment over $5,000,
  2. Acquisition of land or improvements over $10,000 and
  3. Construction or reconstruction of buildings and facilities over $10,000.

Forms were due back in the Town Administrator’s office no later than October 16th.

On Saturday, October 24th, members of the Board of Selectmen and Finance Committee together with the Financial Team toured each of the Town’s facilities and met with each Board and Department Head requesting capital projects or equipment.  Due to time limits, the exception to the facilities’ tour was the two elementary Schools.  However, the team did meet with the School’s Facilities Director in the Proctor School Library.

The Financial Team then met with each Department Head who had submitted requests to go over their requests in detail.  These discussions were held on January 5, 2010.

Following these meeting, the Financial Team met and rated the requests in order to finalize our recommendations to the Board and the Finance Committee.

RECOMMENDATIONS:

The team initially received over $1 million dollars in capital requests just for FY2011. Obviously, with a guideline for capital expenditures of $100,000 from general funds, the team had to look seriously at financing options.

Therefore, the Team’s recommendations are outlined in two parts.  Part 1 is an overview of its recommendations in the order in which they scored from highest to lowest.  Part 2 addresses the financing for each of the items contained in Part 1.

PART 1:  FY2011 CAPITAL PROGRAM RECOMMENDATIONS

DEPARTMENT

PROJECT OR EQUIPMENT

COST

School Department

Proctor School Doors

$    7,000

Highway Department

Dump/Plow/SanderWing Truck

$  23,000

Town Hall Financial Depts

Computers

$  11,865

Fire Department

Defibrillator

$  30,000

Police Department

SUV

$  35,500

Park & Cemetery

Dump Truck

$  26,000

Town Hall

Munis Server (unrated)

$  16,500

SUBTOTAL:

 

$149,865

Water Department:

Chemical Analyzers

$  32,000

 

Tank Inspection

$  25,000

 

Central St. Water Main Design

$  20,000

 

Pick-up Truck

$  26,000

SUBTOTAL

 

$  99,000

TOTAL

 

$248,865

In order to meet the Finance Committee’s Guideline, the Team is proposing that these items be funded as indicated below.  (Note for the purposes of this recommendation, “general funds” includes general revenues, free cash, stabilization funds, etc.)

PART 2:  FINANCING RECOMMENDATIONS

PROJECT OR EQUIPMENT

PURCHASE/LEASE

Amount

 

 

 

Proctor School Doors

Purchase – General Funds

 $     7,000

Dump/Plow/Sander/Wing Truck

Lease – General Funds

 $   23,000

Computer Work Stations

Purchase – General Funds

 $   11,865

Defibrillator

Purchase – General Funds

 $   30,000

Chevy Tahoe SUV

Purchase – General Funds

 $   35,500

Chevy Dump Truck

Purchase – Cemetery Funds

 $   26,000

Munis Server

Purchase- General Funds

 $   16,500

SUBTOTAL

 

 $ 149,865

Chemical Analyzer

Purchase Water Free Cash

 $   32,000

Tank Inspection

Purchase – Water Free Cash

 $   25,000

Central Street Water Main

Design Contract – Water Free Cash

 $   20,000

Pick-up Truck

Purchase – Water Free Cash

 $   22,000

SUBTOTAL

 

 $   99,000

TOTAL

 

 $ 248,865

 

 

 

Highway Lease

Apply FY10 last payment $23,837

   (23,000)

Cemetery Funds

 

   (26,000)

Water Free Cash

 

   (99,000)

 

Capital Budget

 $ 100,865

Under the scenarios outlined above, the Team recommends general fund purchases in the amount of $149,865.  To bring this recommendation within the Finance Committee guideline, the Team would further recommend that the Finance Committee apply $23,000 from the Highway’s final payment on a previous vehicle lease to the first year of the Wing Truck lease.  This offset would bring the recommended expenditure of funds for Capital purchases within the Finance Committee guideline.  Water Enterprise funds would be used for that Department’s capital requests.  And, per vote of the Cemetery Commissioners, the purchase of the Cemetery truck will be funded from Cemetery funds.

Going forward, given the number of requests that were received this year, paired with what anticipated requests for the next five fiscal years, the Team has some concerns as to the Town's ability to maintain its facilities and the public infrastructure at the present level of service without an increase in capital funds.