DEVELOPING CAPITAL INVESTMENT PLANS

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• DEVELOPING CAPITAL INVESTMENT PLANS

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Outline

• Identify Services and Needs
• Asset Inventory
• Gap Analysis and Project Selection
• Project Substantiation
• Project Prioritization
• Capital and OM Cost Estimating
• Draft Capital Plan and Plan Approval

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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

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Identify Services

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

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Identify Services

• Water and sewer delivery/pick-up,
• Solid waste storage and pick-up,
• Road maintenance,
• Recreation program, etc

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Identify Needs

• Whats more importantgood roads or recreation
  facilities?
• What infrastructure is a must for communities?
• Is it important to link infrastructure needs to
  community service?

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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

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Identify Existing Assets

• Asset inventory should include
• Buildings Contents
• Mobile Equipment
• Water/sewer/solid waste infrastructure
• Roads/Bridges/Signs

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Identify Existing Assets

• Infrastructure Information Sources
• NORCIX Information (Bldg and ME)
• Community Infrastructure Assessment
• PWS Water Systems Review
• Inventory

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Asset Useful Life

• What is the remaining life of your
• arena?
• office building?
• mobile equipment ?
• What affects the useful life of an asset?

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Identify Gaps
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Identify Gaps

• Identify Infrastructure Gaps
• Identify Projects
• Identify Projects

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Ensure Compatibility

• Consider
• How all projects are connected to existing
  infrastructure.
• The OM implications of new infrastructure or
  betterments.

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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?

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Project Substantiation
Documenting the

• What
• Why

• What
• Why

• How Much
• When
• Of your project
• Project Substantiation

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Project Prioritization

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

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Project Prioritization

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

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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

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Develop Capital Cost Estimates

• General rule
• As project approaches implementation the accuracy
  of the estimate increases.

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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

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Cost Information Resources

• Capital, OM, 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

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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)

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Cost Estimates (Capital OM)

• Example Grader
• Capital Cost 250 K (Initial Purchase)
• OM Cost 30 K (Annual)
• Energy Cost (Fuel) 10 K (Annual)
• 6yrs of OM Initial Capital Cost
• example

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Project Substantiation

• Documenting the
• What
• Why
• How Much
• When
• Of your project
• Project Substantiation

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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

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Identify Funding Sources

• Corporate Contributions
• Green Project Grants
• Identify Capital Reserve in Budget

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Feasibility Check

• Are projects achievable considering all factors?
• Is their enough OM funding to sustain the asset?
• Capital Policy includes section on Feasibility.

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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?

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Cash Flow Projects

• Fit projects into available budget.
• example

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Project Substantiation

• Documenting the
• What
• Why
• How Much
• When
• Of your project
• Project Substantiation

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Plan Approval

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

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Plan Approval

• Consultation complete.
• This is your approved working capital plan.

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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.

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Thank You!

• QUESTIONS