Capital Improvement Planning & Budgeting Resource Center

Maintaining high-quality infrastructure is essential to the economic vitality and quality of life of communities. A good capital planning and budgeting process helps communities make smart investments in infrastructure and, thereby, investments in the future.  A capital planning and budgeting process has three basic steps:

  • Define scope of the capital improvement plan (CIP). A government must decide what constitutes a “capital project” and how far into the future it will plan. Processes such as needs assessment can help define the scope.
  • Determine participants and select projects. A government must decide who will be involved in creating the CIP and then select projects to include in the CIP.  
  • Balance the CIP and connect to the budget. The capital investment choices must be financially sustainable, both in terms of the initial capital outlay and long-term operating and maintenance. Replacement costs and ongoing debt service should be part of a long-term financial plan.
  • Manage the project. Capital projects must be carefully managed in order to come in on time, on budget, and within specifications.

 

 

 Best Practices & Advisories

GFOA identified the following best practices related to capital planning and budgeting.

 

Resources

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Additional GFOA Resources

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Best Practices