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II. PURPOSE <br />A capital improvement is a major expenditure of municipal funds for the <br />acquisition or betterment to public lands, buildings, or other improvements <br />used as a city hall, town hall, library, public safety, or public works facility, <br />which has a useful life of 5 years or more. For the purposes of the CIP Act, <br />capital improvements do not include light rail transit or related activities, <br />parks, road/bridges, administrative buildings other than city or town hall, or <br />land for those facilities. A Capital Improvement Plan ("CIP") is a document <br />designed to anticipate capital improvement expenditures and schedule them <br />over a five-year period so that they may be purchased in the most efficient <br />and cost effective method possible. A CIP allows the matching of <br />expenditures with anticipated income. As potential expenditures are <br />reviewed, the municipality considers the benefits, costs, alternatives and <br />impact on operating expenditures. <br />The City of Ramsey, Minnesota (the "City") believes the capital <br />improvement process is an important element of responsible fiscal <br />management. Major capital expenditures can be anticipated and coordinated <br />so as to minimize potentially adverse financial impacts caused by the timing <br />and magnitude of capital outlays. This coordination of capital expenditures <br />is important to the City in achieving its goals of adequate physical assets and <br />sound fiscal management. In these financially difficult times good planning <br />is essential for the wise use of limited financial resources. <br />The Capital Improvement Plan is designed to be updated on an annual basis. <br />In this manner, it becomes an ongoing fiscal planning tool that continually <br />anticipated future capital expenditures and funding sources. <br />Ehlers & Associates, Inc. Page 4 <br />