DEVELOPING CAPITAL INVESTMENT PLANS

1. DEVELOPING CAPITAL INVESTMENT PLANS

2. Outline • Identify Services and Needs • Asset Inventory • Gap Analysis and Project Selection • Project Substantiation • Project Prioritization • Capital and O&M Cost Estimating • Draft Capital Plan and Plan Approval

3. What Is Capital Planning? The process will help communities…. • Understand and identify service related infrastructure needs… • Provide a clear vision for administration to follow • Allow greatest number of important needs to be met

4. Identify Services • Good quality of life for citizens • What services to deliver? • Is the service affordable? • Infrastructure required to deliver services?

5. Identify Services • Water and sewer delivery/pick-up, • Solid waste storage and pick-up, • Road maintenance, • Recreation program, etc…

6. Identify Needs • What’s more important…good roads or recreation facilities? • What infrastructure is a must for communities? • Is it important to link infrastructure needs to community service?

7. Identify Needs • Immediate Needs • Grader engine blows • Predictable Growth Need • Population results in lot development • Future Needs • Community interest in a new facility • Facility replacement requirements Identify Services and Needs

8. Identify Existing Assets • Asset inventory should include: • Buildings & Contents • Mobile Equipment • Water/sewer/solid waste infrastructure • Roads/Bridges/Signs

9. Identify Existing Assets Infrastructure Information Sources: • NORCIX Information (Bldg and ME) • Community Infrastructure Assessment • PW&S Water Systems Review Inventory

10. Asset Useful Life • What is the remaining life of your: • arena? • office building? • mobile equipment ? • What affects the useful life of an asset?

11. Identify Gaps ??

12. Identify Gaps • Identify Infrastructure Gaps • Identify Projects Identify Projects

13. Ensure Compatibility Consider… • How all projects are connected to existing infrastructure. • The O&M implications of new infrastructure or betterments.

14. Ensure Compatibility • Consider affects of new infrastructure on old. • Will new water truck fit in garage? • Will granular stockpile be ready for lot development? • Can new pool use heating system from arena? • Do assets need to be disposed of?

15. Project Substantiation • How Much • When Of your project…… Project Substantiation Documenting the: • What • Why • What • Why

16. Project Prioritization What project outweighs another? • Health and Safety vs Community Development …balance • Water Plant or Youth Centre? • Road Development or Library?

17. Project Prioritization Sample Criteria to assess projects… • Health and Sanitation • Wellness • Basic Safety Needs • Legal Requirements • Project Need/Urgency • Public Support Prioritize Projects

18. Develop Capital Cost Estimates • Capital Infrastructure Cost Estimating • Several methodologies used • Varying degrees of accuracy • Capital Equipment Cost Estimating • Use marketplace including factors such as: • Freight • Pre-delivery inspections • Custom Specifications, etc…

19. Develop Capital Cost Estimates • General rule: • As project approaches implementation the accuracy of the estimate increases.

20. Cost Estimating • A, B, C, D Class Cost Estimates • Class D: Accuracy 30-35% • Preliminary approval • Class C: Accuracy 20-25% • Planning, definition of project requirements, approval • Class B: Accuracy 10-20% • Approval,budgetary control, design cost control • Class A: Accuracy 5-20% • Evaluate tenders for cost control during construction

21. Cost Information Resources • Capital, O&M, and Energy • GNWT - MACA and PWS • Engineering - Consultant or through planning study • Power - NWT Power Corp. • Construction - Historic values, NWT Construction Association. • Mechanical servicing/inspections - Past invoices • Tools/supplies - Catalogues/Internet

22. Total Cost of Capital • Capital • Initial purchase or construction cost • Operations and Maintenance • Maintenance and repair (per yr) • Staff Time (per yr) • Fuel, Power costs (per yr)

23. Cost Estimates (Capital & O&M) Example – Grader Capital Cost = 250 K (Initial Purchase) O&M Cost = 30 K (Annual) Energy Cost (Fuel) = 10 K (Annual) 6yrs of O&M = Initial Capital Cost example

24. Project Substantiation Documenting the: • What • Why • How Much • When Of your project…… Project Substantiation

25. Identify Funding Sources • New Deal provides opportunity for innovation. • Local property taxation revenue now an option. • Be aware of all of potential funding sources: • Territorial • Federal • Municipal – FCM

26. Identify Funding Sources • Corporate Contributions • Green Project Grants • Identify Capital Reserve in Budget

27. Feasibility Check • Are projects achievable considering all factors? • Is their enough O&M funding to sustain the asset? • Capital Policy includes section on Feasibility.

28. Draft Capital Plan • Take the priority project list and fit into a plan. • May have to move/drop projects to future years. • Decisions will need to be made. • What needs to be done now and in the future?

29. Cash Flow Projects • Fit projects into available budget. example

30. Project Substantiation Documenting the: • What • Why • How Much • When Of your project…… Project Substantiation

31. Plan Approval • Typically SAO presents to council for approval. • Consultant and other staff may assist if required. • Opportunity to discuss and address “minor” issues.

32. Plan Approval • Consultation complete. • This is your approved working capital plan.

33. Next Steps - 20 Year Forecast • Capital Plans - focus on 1 to 5 years. • Larger plans will include future years (up to 20) • Maps out longer term plan for community. • Delayed projects can be kept on plan.

34. Thank You! QUESTIONS