Draft/Importance of Capital Investment PlanASSUMPTIONS
It is extremely important, from the beginning, to emphasize the importance for an organization to
have a viable Capital Investment Plan or a Capital Improvement Plan. Without the commitment
of a CIP and the associated budget that is available each and every fiscal cycle, a good or
excellent Facilities Plan is a waste of valuable time. An organization needs to be committed to
the upgrade, modernization, and maintenance of their facilities as an ongoing project. Then, and
only then, can a facilities plan be effective. The Facility Plan must be a living document that
keeps the management informed of the status of its facilities.
CHAPTER I - The Facilitv Plan
MAPPING
A map of the City of Kalispell will be produced visibly showing all property owned, leased, or
maintained by the City of Kalispell. All tracts of land will be identified as to whether they have
structures on the property or not. Each tract will be assigned an Item Number (ex. . If
there are structures on the tract of land there will be a suffix number assigned to each structure
(ex. ).
By positioning your cursor on one of the tracts shown on the map and clicking once, a display
box will appear giving you the Item Number and a brief description of the property with minimal
verbiage. If there are multiple structures on the property they will be noted also. By clicking
twice on the tract of land a form will appear listing approximately 30 items describing that
property, its condition, costs, present value, etc.
FACILITY CONDITION REPORT
The FCR will contain a complete history of the facility; when it was built and at what cost; its
current condition with discrepancies listed; what it was constructed with and what facilities are
available inside. This inventory form will give a complete condition report of the structure; how
many people work in the facility; what is the main function of the structure; and who has
responsibility for maintaining the facility.
This form will be the main document used to provide data to the Facility Plan. Since you will
not be able to enter data directly onto the Master Data File or delete data from the Master Data
File, all information must be entered or deleted via the FCR.
The City of Kalispell has not been providing the necessary funding to maintain and upgrade a lot
of its facilities. Those facilities that are under the control of organizations other than the City of
Kalispell, ie., leased by others, have had some renovations and modernization. Most of the
facilities that fall under the jurisdiction of an Enterprise Fund have done some renovate and
modernization of those structures. However, those facilities that are the responsibility of, and
under the control of the General Fund may show a lack of attention.
EVALUATION AND ANALYSIS
When an organization operates on a zero based budget, they normally do not have excess
funding to put towards the modernization and upgrade of their facilities until they have fallen
apart completely and it becomes an emergency situation to bring them up to industry standards.
It is essential for management to put together a system to rank each facility based on its
importance to the goals and objectives of the city so that when a FCR is completed for the
facility the relative benefits or merits of each facility project can be assessed against that set of
criteria. One way would be to have the supervisor of the facility evaluate the projects on a scale
of 1 to 100. Then have the evaluation team evaluate the same projects on the same scale.
Management would then add their scale to the mix. The final rating would be applied by senior
management or city council.
Once the rating criteria is applied to all of the projects, a quantified relative value of each project
will start to emerge, and it becomes clear which projects most closely align with management's
goals and objectives.
Using this evaluation system doesn't mean that the top projects will necessarily be the first
funded. A top project that provides the most value might also be so exorbitantly expensive that
the city is better off not funding it and instead use those funds to complete a series of other
projects farther down the list, which may have less direct alignment and benefit, but
cumulatively provide more overall value than the expensive top project.
SENSITIVITY ANALYSIS
Once the relative value of each project has been defined, the project ratings are reviewed and
often need to be justified to senior management. This is where many decision processes fail.
Senior management may have a slightly different view of the situation or problem. Management
may wonder why a certain project receives a high rating from the supervisor of the facility and
might have the evaluation team go back and justify the evaluation and judgment on some of the
prof ects.
BUDGETING AND RESOURCE ALLOCATION
A decision on a project is not really a decision until resources have been committed to it. At that
point, the benefits of each project have been defined in relationship to the evaluation criteria and
the objectives of the city.
In some cases there will be multiple funding sources, some projects run over the course of
several years and there are also interdependencies among the projects where one project cannot
be started until a supporting project is funded and completed. An example of this would be the
building of a new maintenance facility. This would require the current facility to stay in
operations while the new one is built. The second maintenance facility can not be started until
the first one is completed and put into operations. Most organizations use a master plan to show
a multiple year development. This way the end goal is always visible on the drawing boards.
Once the master plan for the area is approved by senior level management, resourcing can be laid
out for future funding of the projects involved.