Town of Newtown, CT Chapter 310 Capital Improvement Plan

[HISTORY: Adopted by the Legislative Council of the Town of Newtown 11-4-2020[1]. Amendments noted where applicable.]

[1] Editor's Note: The ordinance adopted this date also superseded former Ch. 310, Capital Improvement Plan, adopted 3-6-1997, as amended.

§ 310-1 Purpose.

This policy is designed to assure that Newtown's needs are fully considered in the capital planning process. It helps to assure the sustainability of Newtown's infrastructure by establishing a process for addressing major maintenance, construction, replacement and capital asset acquisition. It strengthens Newtown's borrowing position by demonstrating sound fiscal management and showing the Town's commitment to maximizing benefit to the public within its resource constraints. It establishes a framework in which stakeholders understand their roles, responsibilities, and expectations for the process and end result. It also promotes sound, long-term operational and capital financing strategies.

§ 310-2 Goal.

A. The goal in adopting this regulation is to:

(1) Prioritize, on a Town-wide basis, proposed major capital assets/projects;

(2) Establish a consistent level of spending for such capital assets/projects;

(3) Integrate financial planning, budgeting and debt issuance for the Town;

(4) Encourage careful project design.

B. This Capital Improvement Plan (CIP) regulation hereby:

(1) Creates a process by which the Board of Finance adopts a proactive position regarding capital expenditures of the Town of Newtown;

(2) Creates a process by which the Board of Finance evaluates, modifies, postpones or eliminates, prioritizes, and monitors proposed capital assets/projects;

(3) Creates a process by which the Board of Finance and Legislative Council work compatibly in enacting the above Subsection B(1) and (2).

§ 310-3 Overview.

A. The Capital Improvement Plan (CIP) is Newtown's five-year program of major capital asset/project acquisitions of a nonrecurring nature. The CIP is based on assigned priorities that consider Town: plans, needs, desires and mandates in the context of current and anticipated financial capability to finance such improvements. A "capital improvement" is defined as any expenditure for equipment, buildings, infrastructure, land acquisition, plan or project in which the total cost exceeds $200,000.

B. The CIP shall be reviewed at least annually. The need or idea for capital assets/projects may originate from department heads, boards or commissions. These capital assets/projects items are compiled by the Board of Selectmen and Board of Education. After review and endorsement by the respective boards, each Board presents their proposed CIP to the Board of Finance. Following the presentations, a combined CIP, along with analysis by the Finance Director, is presented to the Board of Finance. The Board of Finance shall review and may amend the CIP, which is then presented to the Legislative Council for review, amendment and approval.

C. A "major capital asset/project" is defined in § 310-6.

D. Once the Legislative Council has approved the CIP, the CIP outlines the Town's official intent to fund these expenditures in the subsequent years' budgets. Certain items may be subject to approval by referendum and/or require bonding authorizations.

E. Adopting a CIP does not end with the first year. Changing needs, priorities, emergencies, cost changes, funding shortfall, mandates, technology or other circumstances may require changes, deletions or additions to the CIP annually.

F. The CIP achieves the following objectives as a component of the Town's budget and financial planning process:

(1) Minimizes borrowing costs by supporting a high bond rating;

(2) Reduces the need for "crash programs" to finance Town capital assets/projects;

(3) Focuses attention on community goals, needs and capabilities;

(4) Guides future community growth and development;

(5) Ensures that projects are well planned in advance of construction;

(6) Provides for the orderly replacement of capital assets;

(7) Encourages a more efficient governmental administration as well as maintains a sound and stable financial program;

(8) Promotes transparency regarding planned major capital assets/projects and their costs.

§ 310-4 Implementation and amendments.

Notwithstanding that capital asset/project ideas or needs may originate as indicated in § 310-3, the Board of Finance is responsible for implementing the purpose and goals expressed above in §§ 310-1 and 310-2 and all changes, additions and deletions to the CIP. In addition, among others, the Town Financial Director, First Selectman, Chairman of the Board of Education, Superintendent of Schools and Legislative Council members may advise the Board of Finance but do not have voting privileges. The final approval and funding appropriation for the CIP is vested in the Legislative Council, unless expressed otherwise in this CIP policy.

§ 310-5 Presentation of Proposed capital assets/projects to Board of Finance.

A. Proposed capital assets/projects may be brought to the Board of Finance at any time. However, except for exigent circumstances, as determined by the Board of Finance, requests for changes to the approved CIP shall not be considered by the Board of Finance until the next September through November period. If an exigent circumstance arises and necessitates an amendment to the CIP, then that amendment will follow the same CIP approval process: Board of Selectmen/Board of Education approval; Board of Finance approval; Legislative Council approval.

B. The following CIP timing/schedule shall be followed. Small adjustments to the schedule may be made upon approval by the Finance Director and majority vote of each applicable Board or Council involved in the extension of time.

Capital Improvement Plan Timing/Schedule
July/August/September	Board of Selectmen departments prepare their CIP requests
	First Selectman presents the proposed First Selectmen CIP to the Board of Selectmen
	Board of Education develops their CIP based on that Board's policy and procedure
Board of Finance 3rd meeting in September	Board of Education presents its proposed CIP to the Board of Finance
Board of Finance 1st meeting in October	Board of Selectmen presents its proposed CIP to the Board of Finance
	Finance Director presents the combined Town of Newtown CIP along with analysis including a debt forecast schedule
By November 30	Board of Finance presents its recommended CIP to the Legislative Council
By January 31	Legislative Council adopts its approved CIP
	Legislative Council determines which first-year CIP projects go to referendum in April
February/March	Bond resolutions go through the approval process for CIP projects that have been approved for referendum

§ 310-6 Eligible capital asset/project.

To be eligible for inclusion in the CIP, a proposed capital asset/project expenditure shall have an estimated cost that is at least $200,000. Listed below are some of the criteria which would make a request eligible for inclusion in the CIP, assuming the proposed project exceeds the financial requirement set forth above:

A. Incurred debt obligations;

B. Acquisition or lease of land, improvements to land, easements buildings improvements, and/or development rights;

C. Purchase of major equipment including vehicles, machinery, works of art, and historic treasures, with life expectancies of five years or more;

D. New construction improvements, renovations, and demolition of facilities and sites, including engineering, design, permitting, and other pre- and post-construction costs;

E. Major studies requiring the employment of outside professional consultants;

F. Infrastructure improvements (streets, sewers, bridges, sidewalks, technology);

G. Feasibility analysis/design/cost estimates and other professional services relative to anticipated major projects;

H. Ancillary charges necessary to place the capital asset into its intended location and/or condition for use. Ancillary charges include costs that are directly attributable to asset acquisition, such as freight and transportation charges, site preparation costs, and professional fees;

I. Bundling of annual maintenance or dissimilar items in order to reach the $200,000 threshold is strongly discouraged, and shall be called out for discussion prior to consideration of an exception.

§ 310-7 Process.

All requests for inclusion in the CIP should adhere to the following process and be submitted on a form as prescribed by the Town Financial Director. While only the first five years of the plan are to be approved, 10 years of desired capital assets/projects shall be submitted.

A. Each Town department and the Board of Education shall prepare a prioritized list of proposed capital assets/projects along with proposed funding source, summary description, and benefit commentary.

(1) The departments so indicated by Charter, and the Board of Education, shall review with and seek input from relevant Boards, Councils or Committees (e.g., Public Building and Site Commission and Sustainable Energy Commission) prior to submission.

(2) Reviewed lists created by town departments shall be submitted to the First Selectman.

B. The First Selectman will evaluate the town department requests and produce a "First Selectman CIP" to be submitted to the Board of Selectmen for review, adjustment and approval.

C. After presentation of the First Selectman CIP, the Board of Selectmen will identify, prioritize and approve, on a Town-wide basis, purchases it proposes to include in the CIP, excluding items requested by the Board of Education.

D. Board of Education shall prepare and submit to the Board of Finance a prioritized list of proposed capital assets/projects along with their proposed funding source.

E. The requesting department or agency will plan for and be responsible for funding any professional estimating for a project in the operational budget. If applicable, alternative sources of funding can and should be identified, such as the Capital Non-Recurring Account, and be reimbursed upon actual borrowing if appropriate.

F. The Board of Selectmen and the Board of Education shall also include in the request(s) for each capital asset/project, with increasing detail for nearest years the identification of planned funding: bonding, general funds, special revenue funds, and any grants, revenues or reimbursements anticipated and project description and project justification.

G. The Town Finance Director shall:

(1) Review and compile the Board of Selectmen Proposed CIP and Board of Education Proposed CIP lists into a "Combined CIP" for presentation to the Board of Finance.

(2) Prepare a financial impact statement. including a bond forecast schedule which shows the effect of the Combined CIP on future annual debt payments for at least five years, to ensure adherence to the Town Debt Service Policy.

(3) Prepare debt service scenarios for consideration relative to the Debt Service Policy goals.

H. The Board of Selectmen and Board of Education will each present their capital assets/project requests and the prioritized Combined CIP to the Board of Finance. The Finance Director will present the bond forecast schedule and other analysis.

I. The Board of Finance will review the Combined CIP.

(1) It may reduce a capital assets/project cost and scope; it may transfer capital assets/projects between CIP years, and it may add or eliminate a capital asset/project. Moving or adding a capital asset/project to Year One should be strictly scrutinized.

(2) The Board of Finance will then sort, within each CIP year, the recommended capital assets/project, based on prioritization as provided from the Board of Selectmen and Board of Education as well as cost and other considerations, and establish a time frame for proceeding with each purchase in view of the financial implications of such a purchase, expenditure or project.

(3) Consideration shall be given to:

(a) Debt Service Policy.

(b) Necessary maintenance of existing facilities.

(c) Essential public services such as those related to safety.

(d) Budgetary impacts of changes in debt service.

(4) Rejected capital assets/projects can be resubmitted to the appropriate Board at the first step of the process next fiscal year. If postponed, the request shall be reviewed by the Board of Finance with respect to its new priority level the following fiscal year.

J. In odd years if the election of a First Selectman results in the election of a person other than the First Selectman who presented the CIP to the Board of Finance in October of that year, that new First Selectman may request changes to the first year of the CIP under review by the Board of Finance and Legislative Council.

K. The Board of Finance will present their recommended CIP to the Legislative Council by November 30. The Finance Director will also present to the Legislative Council the bond forecast schedule (updated for any Board of Finance actions).

L. The Legislative Council will review the Board of Finance recommended CIP. It may accept it in its entirety. It may reduce, transfer between CIP years, eliminate or add capital asset(s)/project(s). As the Legislative Council is ultimately responsible for the Debt Service Policy and sending the budgets to referendum, special consideration will be given to those respective impacts. Moving or adding a capital asset/project to Year One will be strictly scrutinized.

M. Upon any change of the Board of Finance's recommended CIP by the Legislative Council, the Legislative Council shall return its proposed CIP with changes to the Board of Finance for review and recommendation before final approval by the Legislative Council.

(1) The failure of the Board of Finance to make any recommendations within 10 days of the Legislative Council's proposed CIP, then the Legislative Council may act without additional recommendation from the Board of Finance.

(2) No matter the number of CIP changes by the Legislative Council, the Board of Finance shall have only one post-November 30 review and recommendation.

N. The Legislative Council shall adopt a Town-wide CIP and, by January 31, shall determine which capital assets/projects from Year One of the CIP should go to referendum. If the Legislative Council has not passed the final CIP plan by January 31, the Board of Finance recommended CIP presented to the Legislative Council shall be the final adopted Town-wide CIP.

O. The following should be considered when determining which capital assets/projects go to referendum:

(1) Projects that require multiple years of funding or that exceed Legislative Council fiscal authority;

(2) Capital assets/projects which, because of their significant cost, may limit the Legislative Council's fiscal authority;

(3) Time-sensitive projects;

(4) Safety and security importance.

§ 310-8 Prioritization.

The Board of Selectmen, Board of Education, Board of Finance and Legislative Council should consider the following guidelines when recommending the prioritization of individual capital items (in no particular order):

A. Projects implementing approved Town plans such the Plan of Conservation and Development and the Fairfield Hills Master Plan;

B. Capital items that are one phase of a multiphase project that are expected to exceed Council authority in total should receive priority consideration for referendum;

C. Significant consideration shall be given to the most costly of the remaining capital items which should go to referendum;

D. Items that are time-sensitive should receive priority consideration for referendum;

E. The cost of the purchase;

F. The impact of the purchase versus the benefit to the Town;

G. The year it will be implemented;

H. The source of financing;

I. Public safety;

J. Existing infrastructure;

K. Economic development;

L. Quality of life;

M. Regulatory compliance;

N. Impact on current and future operational budgets;

O. The benefit or risk to the Town should the purchase not be made.

§ 310-9 Town Budget.

All purchases that are proposed for the ensuing fiscal year and included in the final Town-wide CIP by the Legislative Council shall be included as a proposed expenditure in the budget presented to the Board of Finance. Except for exigent circumstances, any capital improvement expenditure that falls within § 310-6 of this plan regulation and is not contained in the CIP shall not be considered for implementation until included in the CIP.

§ 310-10 Capital asset/project process.

A. The processes used to authorize bonding and appropriations for a capital asset/project are controlled by a series of checks and balances exercised by the executive, finance, and legislative arms of the Town government. These processes are established to ensure that each project or purchase with significant costs is evaluated and examined by persons elected to represent the best interests of the community. Every project accepted into the Capital Improvement Plan, as approved by the Board of Selectmen, Board of Education, Board of Finance and Legislative Council is subject to the same rigorous review. Except for emergency situations, a consistent and documented process should be used to advance every capital project or asset purchase from inception to execution by its requesting agent.

B. Projects or purchases approved for inclusion in the CIP typically progress from the introductory phase in Year Five to the execution phase in Year One. As in § 310-7, Years One through Five are part of the CIP approval and Years Six through 10 are informational only. However, priorities may change between each annual review. Projects in Year One on the CIP are intended for implementation during that fiscal year. Capital projects to be implemented must go through the bonding and special appropriations processes, as determined by Charter § 6-35.

C. Steps in this process for projects readying for implementation include:

(1) A special appropriation request for a capital project is initiated by the First Selectman (or, less commonly, by the Legislative Council);

(a) A special appropriation includes the method of financing. If the method of financing is bonding, then the resolution is called a bonding resolution and is drawn up by bond counsel. All other special appropriation resolutions are drawn up by the Finance Director.

(b) An impact statement is included with special appropriation requests.

(2) The special appropriation is considered and voted upon by the Board of Selectmen.

(3) If the Board of Selectmen approves the special appropriation, it is then submitted to the Board of Finance for discussion and action;

(4) If approved, the appropriation request then moves to the Legislative Council;

(a) Per § 6-35(d) of the Town Charter, the Legislative Council shall have the power to make special and emergency appropriations, in an amount not in excess of $1,500,000 for any one purpose during a fiscal year. Said amount shall be cumulative during the fiscal year as to all appropriations related to said purpose. The total of special and emergency appropriations made by the Legislative Council for all purposes during a fiscal year shall not exceed an amount equal to one mil on the most recently completed Grand List.

(b) Any amount exceeding either of these limits must be submitted to referendum for voter approval.

D. Management/oversight of capital/projects: The Public Building and Site Commission shall have control of supervision and construction of capital projects. Should the Public Building and Site Commission determine that it is unable to take on this responsibility, then other building committee or owner's representative may be appointed by the Board of Selectmen or Board of Education.

(1) The Public Building and Site Commission or other authorized building committee will establish appropriate advisory committees; will prepare and issue appropriate requests for quotations and requests for proposals; and will select professionals and develop contracts with attorney and purchasing agent's input.

(2) Contracts in conjunction with all such capital projects shall be authorized by the First Selectman, with approval of the Board of Selectmen, or Board of Education.

E. Project planning and bidding: Once the special appropriation process is complete and approved by the appropriate levels of government, assignment of the project to the Public Building and Site Commission or other building committee may take place, followed by project planning, including the issuance of public bids.