Capital Improvement Plan (CIP)

With the need to protect current investments and controlling costs within often-limited budgets, planning is very important. Weather you’re the GM at a professional venue planning for a multi-million project or a maintenance supervisor in a small municipality looking to renovate a baseball infield and replace a mower, a CIP can serve as a road map for long term planning and fund development. Departments must keep pace with the growth and programming of their users, and provide for many of the department’s needs for the future; requiring that investments be made annually in capital improvements. Failure to commit to these investments will place a greater financial burden on the department in future years. A structured CIP will aid in the planning for the future.

The CIP provides priority scheduling of capital improvements for a specific period of time. Capital planning is a fluid process that requires continuous review and a dynamic realignment of the rest of the plan. Annual review with the addition of new projects, deletion of projects, and the movement of projects from one fiscal year to another make the program a continuing process in which an up-to-date schedule of projects can be maintained.

There are many benefits to be gained by developing and utilizing a CIP. The list of advantages that follows will help to encourage the development and use (know as programming) of a CIP. In addition to the development of a plan, the CIP can be used as a guide and measuring device in the process itself.

The following is a list of advantages for developing a CIP:

• Through the maintenance of an orderly, economically sound and up-to-date schedule of projects, programming provides adequate time for the necessary planning and scheduling of projects. Early decisions allow for the development of a realistic timelines ensuring projects are completed on time and with little or no cost overruns.
  
  
• Programming and advance planning calls attention to the deficiencies of the department and stimulates action to correct them.
  
  
• It provides an over-all perspective as to the development pattern of the department, and thus enables the staff to take a long-range view of their future activities and responsibilities.
  
  
• Programming promotes coordination of all projects, which allows for bulk orders and grouping of similar projects, thus reducing cost.
  
  
• Programming aids in assuring that projects are not undertaken to soon, before the need raisers, and not to late, after certain cost may be inflated or the cost of maintaining under the current condition exceeds any line item amount in the operating budget.
  
  
• As plans can be prepared in advance, it will enable the administration to take better advantage of any funding and/or revenues available.
  
  
• It can enable the department to undertake additional projects scheduled for later years in a period of surplus revenues should such a situation arise.

What is a Capital Improvement Plan?

A CIP is a plan for a pre-determined number of years for capital expenditures needed to replace, renovate, expand or improve facilities within a department. The CIP would also include the purchase of any equipment needed to maintain or improve facilities or for transportation of teams or staff. The development of a structured capital plan is known as programming. As with any CIP, it will need to be reviewed and updated regularly to reflect the department’s latest priorities and cost estimates.

Any CIP needs to have a scope. The program scope should include all needed improvements that would begin during the planning cycle. The plan must be reviewed each year, or more often, at which time projects will be removed that have been completed, new projects added, priorities reassessed, and the program extended one year. The CIP should also include, but may not be limited to a minimum total cost for projects, a life expectancy, impact on operating budget, priority, method of funding, description of the project or purchase and justification. You may also want to break down the cost to include planning/design, construction, equipment and others.

Recommendations for Implementing the CIP:

• Create a database to store all of your projects.
  
  
• Develop forms for project submittals for project request.
  
  
• Designate one person to be responsible for updating the database.
  
  
• Develop procedures for the CIP including a timeline for project submittal; imputing projects into the database, producing a draft of proposed projects, review of projects and priorities and finally a list of approved projects. The approved list of projects should be made available soon enough to allow adequate time to plan and schedule projects.
  
  
• As much as possible, establish an amount of funds that will adequately fund the CIP and remain consistent with the amount of monies available each year.

While there are many needs for facility improvements in most departments, all of these problems cannot be solved at once. However, it is possible to plan for providing for facility improvements within the departments financial capabilities over a reasonable period of time.

Here is an example of a project submittal form I used while working at the University of South Carolina and one I used for the LSU athletics department