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Local Government and School Accountability

Capital Planning and Budgeting

A Tutorial for Local Government Officials

Module 3 - From Plans to Projects
Beyond the First Year

After the initial capital plan has been completed and projects are underway, a review of the planning process should be undertaken to determine whether changes should be made to improve the process. This step is particularly important for governments developing a capital plan for the first time. All participants in the planning process should be given the opportunity to provide input as to what aspects of the process have worked well and what should be modified.

At a minimum, the multiyear capital plan should be reviewed annually. As the current year passes and projects are completed (or not), the needs of the next year come more into focus. Year four is now year three, year three is now year two, and so on. Vague long-term goals and objectives are coming closer to reality. Initial work may need to be started (and funded) for a project to be completed two years hence. A new budget will have to be developed and approved for the upcoming fiscal year.

Asset performance should also be evaluated. Over time, have the capital purchases and projects produced the expected results? Have long-term goals been met? Are changes necessary? Our Local Government Management Guide on Capital Assets [pdf] gives guidance on asset performance, protection, and maintenance, as well as risk assessment, which can help local officials to answer these questions.

Local officials should monitor the external environment to help them anticipate changes that might impact the later years of the capital program. Changes in technology or equipment can make portions of the plan obsolete. Changes in anticipated State and federal funding can impact the number and priority of planned projects. Circumstances may change within the local government that directly affects the needs of the community. Citizen input may signal a change in direction. Stakeholders and decision makers should be apprised of these external factors that can change the focus of capital plans.

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