A Capital Improvement Plan (Program), or CIP, is a short-range plan, usually four to ten years, which identifies capital projects and equipment purchases, provides a planning schedule and identifies options for financing the plan. Essentially, the plan provides a link between a municipality, school district, parks and recreation department and/or other local government entity and a comprehensive and strategic plans and the entity's annual budget.
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A CIP provides many benefits including:
The CIP typically includes the following information:
Prior to undertaking the development of the CIP, the government entity will want to define the criteria for what kind of projects or equipment are to be included and organize a process for developing the plan. What is defined as a capital project or capital purchase may vary from city to county to district to state depending on the size of the local government provisioning the plan. Generally, they will be tangible items that have a life expectancy greater than one year.
A local government will also need to forecast where it believes it will face future demands and growth, which will involve an inventory of existing facilities, infrastructure and equipment. In addition, a local government will want to develop basic policies for implementing the plan. Because the CIP includes financing issues, the municipality may want to seek advice from their financial advisor and/or bond counsel. A review of the municipality's current finances is also vital.
Once the CIP is finalized, the local government is required to hold a public hearing before the plan is adopted by a city council, a board of regents and/or a bond review commission.