Civil Engineering Reference
In-Depth Information
Ongoing and annual improvement projects should also be listed in the capital im-
provement plan. These may include ongoing water line replacement programs, water
quality monitoring programs, and water meter upgrading / replacement projects.
Capital Improvement Summary Table
Capital improvements can then be summarized in a spreadsheet table that will use a
preset escalation rate to calculate the project cost for the scheduled year of construc-
tion. The spreadsheet can also be used for comparing ''what if'' scenarios of project
scheduling to meet realistic annual funding objectives. Figure 7-9 presents sample CIP
spreadsheet output.
FINANCIAL PLAN
The purpose of the financial plan is to determine the total costs for providing water
service and for funding capital improvement projects. The financial plan should include
the following: a summary of recent (last three years) of operating expense and income,
a current budget and improvement-financing plan, a listing of revenue sources and
allocations to projects, and a rate assessment.
Operating Budget Summary
A summary of recent past and future planned system operating expense and income
will serve to provide a basis for the financial plan. The typical water system operating
budget should include:
Revenues from water rates, fees, and other sources.
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Capital sources from loans, bonds, grants, and special charges.
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Operating and maintenance expenses, including salaries and benefits, power,
chemicals, monitoring and testing, materials and supplies, and transportation.
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General and administrative expenses, including salaries and benefits, office sup-
plies and expenses, insurance, legal and accounting, engineering, fees, training,
taxes, and depreciation.
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Annual debt payments, including principal and interest on loans and bonds.
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Capital improvement project costs.
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The plan should then also summarize the planned installment payments to operating
cash and emergency reserve accounts, as well as the total amounts of available revenue.
The amount in the emergency reserve account may be established based upon the
funding cost of replacing the most vulnerable critical facility in the system.
Revenue Sources and Allocation
Anticipated revenue sources for financing capital improvements may include general
obligation or revenue bonds, system development charges, low-interest loans, grants,
or water sales. The planned revenue source and allocation for each identified capital
improvement project should be summarized in the CIP so that total amounts available
from each source can be shown in projected operating budgets.
