Memorandum

City of Lawrence

City Manager’s Office

TO:	Diane Stoddard, Interim City Manager
CC:	Casey Toomay, Assistant City Manager Ashley Lonnberg, Senior Accountant
FROM:	Bryan Kidney, Finance Director Ashley Lonnberg, Senior Accountant
DATE:	February 25, 2016
RE:	Capital Improvement Program scoring matrix and draft of 2017 budget calendar

Background

The Capital Improvement Plan (CIP) is a planning tool to assist in the provision of city services. The CIP provides a method by which the community may look beyond year-to-year budgeting to determine what, when, where and how future improvements to city infrastructure may be made. Additionally, the CIP assists the City in taking advantage of alternative financing methods for these larger infrastructural projects, including federal and state assistance.

The CIP is a list of major public improvement projects. It attempts to look ahead to determine the needs for public improvements, and then schedule them within the capabilities of the City’s financial resources.

As part of the budgeting process each year, the City Commission considers which projects to fund in that particular year.  The CIP project list is flexible, and is should be subject to annual appropriation.

CIP Process prior to 2017

Up until the 2010 budget, the City used a comprehensive scoring system to prioritize CIP projects. For the 2010-2016 budgets projects were presented individually during the annual budget process. During this period, projects were divided into three groups:

1. A debt CIP with only projects that were be debt financed

2. A sales tax reserve CIP with only projects to be paid from a portion of the county sales tax

3. An infrastructure sales tax CIP with only projects to be paid from the city’s special infrastructure sales tax

This grouping did not include long-term plans for projects to be paid for from other sources. This method also did not allow for a comprehensive approach to planning.

The 2017-2021 CIP

Staff proposes bringing back the comprehensive CIP scoring system (see proposed scoring system) that was in place prior to 2010 and adding the latest industry best practices.

The prior scoring system grouped governing body goals and project value into one score. The scoring is now adjusted to allow separate consideration of both the:

1. Governing Body goals and if legally mandated, and
2. Project’s individual value.

Once all projects are scored, they are then charted to determine how well they meet the above criteria as shown on the attached sample graph.

There are four quadrants a project could land in depending on its score versus the median of all scores.

• First priority - projects with above median score in meeting governing body goals/ legal mandate and above median project value score.

• Second priority – projects with an above median score in meeting a governing body goal/legal mandate but lower than median project value score.

• Third priority – projects with a lower than median score in meeting a governing body goal/legal mandate but above median project value score

• Fourth priority – projects with lower than median score in meeting a governing body goal/legal mandate and lower than median project value score.

The 2017-2021 CIP will be a comprehensive planning tool that will include all items over $75,000 with at least a five year life. These projects will be presented regardless of funding source. Once top priorities are set, the finance team will then develop a recommended funding plan.

2017-2021 CIP and 2017 Budget Calendar

Attached is the proposed calendars for the 2017-2021 CIP and 2017 budget process. Red calendar items are proposed commission meeting; green items are proposed commission study sessions; and blue items are proposed citizen education meetings.