7-1303: Capital Improvement Plan Policy

Departments responsible for preparing Five-Year CIP documents should first identify their long-term (20–30 year) needs. This may be documented in a single Facility Master Plan or in multiple plans addressing specific facility conditions, such as an ADA Compliance Needs Assessment or a Growth Needs Assessment, or specific infrastructure master plans (e.g., Natural Resources Master Plan for the American River Parkway). Once developed, master plans serve as the basis for the Five-Year CIP, helping prioritize projects according to need, funding sources, available grants, area growth, and current facility conditions.

These master plans serve as foundational documents that guide the identification and development of capital needs. All CIP projects, which the County intends to construct, must demonstrate consistency with the County’s General Plan and Climate Action Plan, and with Capital Improvement Plans directly associated with the various Impact Fee programs administered by County departments. Whenever a master plan is revised, the department shall reassess corresponding CIP priorities to ensure continued alignment with adopted long‑term strategies. Should funding not be available to fully implement the master plan, or to complete or update the plan, the projects prioritized should be evaluated from time to time to confirm that they are viable and necessary prior to identifying a funding source and including the project in the Five-Year CIP.

Each project proposed for inclusion in the CIP must include a clearly defined scope, estimated fiscal year of completion, County priority, and an operating budget impact analysis for operation of the completed project. Submissions shall contain full cost estimates that account for acquisition, design, construction, and contingency allowances. If appropriate, project requests shall include an analysis to ensure that cost‑effective and efficient solutions are evaluated. If a project is initially determined to be infeasible because of limited resources, it may be added to an unfunded CIP section. For these projects, departments should list them with an order-of-magnitude estimate to reduce the use of resources for work that would need to be updated in the future should the project be funded.

Projects must be evaluated by the following criteria to then identify the priority:

• Health, Safety and Regulatory Compliance –
  • Required to protect life, safety, or meet legal/regulatory mandates
• Operations and Service Continuity
  • Prevents, resolves and/or improves service disruption or system failures.
  • Creates redundant systems for service continuity.
• Community and Service Impact
  • Directly improves public access, service levels, or community benefit, or resolves operational inefficiencies.
• Financial/Funding availability
  • Projects that have identified funding sources, including those that may be restricted, should have elevated priority.
  • Potential Financial Impact of not completing a project.
  • Energy Efficiency results in cost savings and contributes towards the Climate Action Plan.
• Strategic Investment – aligned with funding availability
  • Advances long-term plans, growth, or increases future capacity
  • Expected end of life of current assets.
• Readiness and Risk Management
  • Prioritized due to timing, coordination, or risk mitigation

Based on the results of the evaluation, projects should then be given priority ranking as follows:

• Priority I – Projects that cannot reasonably be postponed without harmful or unacceptable consequences.
• Priority II – Essential projects meeting clear needs or objectives.
• Priority III – Important projects benefiting the community that can be delayed without impacting basic services.
• Priority IV – Desirable projects that would benefit the community but are not included due to funding limitations.

The prioritization framework shall provide a consistent, defensible basis for allocating limited capital resources.

All projects included in the funded portion of the CIP must have identifiable, credible funding sources sufficient to cover the full project cost. If a project is to be broken up into phases, each phase must be a functional, usable project on its own and be independent of future phases. Each phase of the project should only be incorporated into the CIP when full funding has been identified.

The funding strategy must demonstrate financial feasibility and support the County’s broader fiscal policies.

Capital planning and operational budgeting shall be closely coordinated to ensure that long‑term operating impacts are considered in all capital investment decisions. The operating budget impact analysis should clearly define the following: (1) anticipated revenue enhancements; (2) anticipated staffing needs; (3) utility costs; (4) anticipated savings due to efficiencies or reduction in maintenance costs; (5) routine maintenance obligations; and (6) when applicable, asset‑replacement schedules. Feasibility studies may be required to assess the County’s ability to operate and maintain the facility, or to determine if bond issuance may be viable when debt financing is considered. In some cases, a cost-benefit analysis of renting versus acquiring, or constructing, a facility should be carried out.

Additionally, capital planning and operating budget staff need to work closely together because project inclusion in the CIP does not grant spending authority. Spending authority is provided through the budgeted appropriations and should be reflected in the current Fiscal Year budget.

The CIP functions as a rolling planning document and shall undergo a comprehensive review and update each year. This process shall identify new priorities, remove completed or canceled projects, revise project costs or schedules, and adjust funding assumptions based on updated financial conditions. The annual update must also reflect changes in service demands, infrastructure conditions, and organizational capacity to ensure the CIP remains responsive, relevant, and aligned with County goals.

The CIP will be considered on an annual basis along with the Annual Budget. Board approval of amendments to the CIP are also required.

Amendments to the CIP may be needed from time to time, such as during consideration of the Revised Recommended Budget. The Office of Budget and Debt Management will coordinate additional combined amendments for department convenience and collaboration. Departments may also independently submit off-cycle CIP amendments for Board consideration; however, such amendments also require a determination of consistency with the General Plan from Planning and Environmental Review staff (and  inclusion of this determination in the board letter), and communication with the Office of Budget and Debt Management.

This policy shall be reviewed every five (5) years, or as additional rules regulating Capital Improvement Plans are adopted at the state or federal level.