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CAPITAL

PROJECT

PRIORITIZATION

6/15/2012

Edmonton, Alberta, Canada

International City and County Management Association (ICMA)

Leadership ICMA Class of 2012


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Capital Project Prioritization

Page 1

Table of Contents

EXECUTIVE SUMMARY 3

INTRODUCTION 4

Who We Are .......................................................................................... 4

Scope of Project .................................................................................... 5

Methodology ......................................................................................... 5

Limitations ............................................................................................ 5

Overview of Peer Cities and Professional Organizations ........................ 6

TIMELINE 7

Best Practices and Peer Research .......................................................... 7

Recommendations ................................................................................ 8

PREPARATION OF PROJECTS 12

Best Practices and Peer Research ........................................................ 12

Recommendations .............................................................................. 13

EVALUATION OF PROJECTS 15



OTHER FINDINGS ON TECHNOLOGY ASSETS 20



CONCLUSION 22

REFERENCES 24

APPENDICES 27

A Timeline Research ......................................................................... 27

B Definitions of Renewal and Growth ................................................ 30


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C Tacoma Comprehensive Plan Questions ........................................ 31

D Austin CIP Prioritization Questionnaire ......................................... 32

EFt. Lauderdale Memo to Council on Matrix .................................... 33


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EXECUTIVE SUMMARY

The Leadership ICMA Team (LICMA Team) assigned to this project was tasked with examining the capital

project prioritization process in Edmonton, Alberta, Canada and recommending potential process

improvements. This task was approached through an on-site visit to Edmonton to document the currentCIP process along with peer city and professional association research focused on isolating best practices

and recommended improvements.

The LICMA Teams research and eventual recommendations are focused on three key areas involved with

the CIP process. They are Timeline, Preparation of Projects, and Evaluation of Projects. These areas

encompass the major steps included in Edmontons CIP process and allow for a step by step analysis of

recommended process improvements.

The LICMA Team found through its research that Edmonton is currently a leader in CIP process as defined

by industry best practices and among the peer cities identified through the project research. This

leadership in CIP process is highlighted by several key strengths that were identified by the capital staff in

Edmonton and endorsed by the LICMA Team. These strengths include: a high acumen at identifying capitalneeds, an unbiased approach to decision making, a strong willingness to look at how capital project

planning fits into the big picture, an experienced and dedicated staff, and strong corporate level review.

However, despite these strengths, Edmonton encountered challenges as it attempted to update its process

during the last planning cycle. These challenges are normal for any organization as it attempts to change

process, and the recommendations of the LICMA Team are aimed at addressing these challenges.

The first challenge identified during the research was that of improving Council input and participation in

the capital process to better understand their priorities and challenges in regard to capital budgeting and

capital projects. The LICMA Team is recommending an amended timeline for the CIP process which

includes earlier discussion with the City Council in order to gain their input and perspective. In addition,the team is also recommending that these earlier discussions with the City Council include a process of

completing a weighted scoring matrix of strategic vision priorities.

The next challenge facing Edmonton is balancing the effectiveness of capital project business cases with the

staff time dedicated to preparing them. The LICMA Teams recommendation to address this challenge

focuses on limiting the amount of content that can be included in each topic area, standardizing the

business case summary sheet, and including a checklist of criteria within the business case that correlate

with the Citys comprehensive planning and strategic visioning efforts.

Another major challenge addressed by the LICMA Team is the size and makeup of the CPPC. In its current

form, the CPPC can be viewed as large and somewhat amorphous, and this condition leads to a dilution of

the process. The LICMA Team recommends either reducing the membership of the CPPC or breaking it intotwo groups that can act as two filter stages for the projects.

Overall, the LICMA Team believes that Edmontons CIP team and process is currently operating at a very

high level and is very effective. Other communities can, and do, currently view Edmonton as a model for

CIP process and planning. However, by considering the implementation of the recommendations that are


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included in this report, the LICMA Team feels that Edmonton can further advance the effectiveness of their

already rigorous and successful process.

INTRODUCTION

Who We Are

Leadership ICMA (LICMA) is a two-year development program for early career local government

professionals. The program covers leadership philosophy, personal integrity, high-performance

organization management models, team-building, strategic planning, and project management. The

final phase of the program consists of consulting for a local government organization with a real-world

challenge.

Leigh Byford is the Team Lead/Project Contact. She graduated with a Master of Public Affairs from the

Lyndon B. Johnson School at the University of Texas. She manages more than $400 million in

operating budgets and associated performance measures for the Police Department, Parks andRecreation, and Communication and Technology Management Department for the City of Austin, TX.

Leigh also coordinates all public engagement and outreach on the operating budget. Leigh brings

strong organizational and analytical skills to the team.

E.A. Hoppe currently serves as the Assistant Director of Community Services in Richardson, TX, a

community of nearly 100,000 in the greater Dallas/Ft. Worth region. Functional areas for the

department include redevelopment and revitalization initiatives, code enforcement, building

inspection, and environmental sustainability. E.A. attained a Master of Public Administration degree

from the University of North Texas and a Baccalaureate from Austin College (Sherman, TX) in Business

and Finance. E.A. brings structural and analytical skills to the project team.

Rolando Fernandez serves as the Assistant Director for the Contract Management Department in the

City of Austin, TX, which is responsible for administering the procurement of professional and

construction services and executing and managing contracts essential for the delivery of efficient

capital improvements while complying with all City and Texas State statutes and policies. Rolando

earned his Master of Public Administration from the St. Marys University and has six years in local

government experience. Rolando brings to the team nearly two years in Capital Improvement Projects

procurement, contracting, and implementation and nearly fourteen years of project management

experience.

Adam Chapdelaine currently serves as the Town Manager of Arlington, MA, a town of 42,000 people,

approximately 10 miles north of Boston. He has earned his M.B.A. from Suffolk University and hasserved in various governmental positions for the past nine years. Adam brings a combination of

analytical ability and organizational problem solving to the team.


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Scope of Project

The LICMA Edmonton Capital Projects Team was tasked with evaluating Edmontons framework for

prioritizing capital projects, conducting research on best practices and emerging trends, and

proposing recommendations to Edmonton for improving their process. After visiting Edmonton, thescope was refined to:

Create an outline providing the recommended structure for the initial discussions between theCorporate Leadership Team (CLT) and Capital Projects Planning Committee (CPPC), includingthe overall level of funding, the corporate, Council and departmental priorities, and thecommunication strategies and timeline with Council.

Develop/recommend a timeline for a multi-year CIP with a rolling Progress Update Program tothe City Council, allowing for reasonable deadlines and process flow.

Assist with the initial messaging (transmittal letter/kick-off event) from the CLT to the CPPC byhelping to develop:

Revised Business Case and scoring templates streamline to reduce strain onstaff resources

Enhanced definitions of growth, renewal, and functionality also providingguidelines on to how to differentiate between them

Assist with guidance to Branch Managers on how to incorporate Council and CLTperspective (The Ways) into initial prioritization documentation.

Assist with developing recommendations for the structure and membership of the CPPC as wellas their function in the prioritization process.

Methodology

The LICMA Team performed an on-site assessment of the Edmonton capital planning process using

facilitated group discussions with the CLT and CPPC and documented existing conditions and

strategies being utilized. Following this assessment, the LICMA team began research on a number of

peer cities in Canada and the United States to isolate best practices and trends in capital project

prioritization. The team also investigated practices recommended by several professional

organizations. This combined research resulted in the teams findings, which are contained within this

report, as well as their recommendations for Edmontons process.

Limitations

While conducting the research for this project, several limitations became clear. First, there are no

clearly defined best practices for balancing renewal projects versus growth projects. Second, while

scoring matrices and risk models provide valuable information for decision makers, these tools are no

substitute for local knowledge and experience about specific asset categories or the public desires for


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service levels. Third, Edmonton became interested in exploring specific challenges with information

technology capital planning, but a detailed analysis is outside the scope of this project. These

limitations are addressed further in later sections of the report.

Overview of Peer Cities and Professional Organizations

The table below shows the eleven North American cities the team chose as peers for Edmonton. Using

each citys online capital planning information and seeking opportunities for personal contact to

answer a set of survey questions, the team collected information about each city.

City Population CIP Budget

Austin, TX 812,025 $600M

Baltimore, MD 650,000 $765M

Boston, MA 610,000 $1.8B

Calgary, AB 1,100,000 $6.02B (5yrs)

Edmonton, AB 812, 200 $2.8B (3yrs)

Fort Lauderdale, FL 165,000 $105M

Greensboro, NC 280,000 $213.97M

Milwaukee, WI 595,000 $1.35B

Phoenix, AZ 1,400,000 $1.3B

San Jose, CA 989,000 $2.4B (5yrs)

Tacoma, WA 199,826 $1.6B (5yrs)

Winnipeg, MB 684,000 $2.6B (5yrs)

The team also reviewed books, articles and case studies by several professional organizations the

International City/County Management Association, the Government Finance Officers Association, and

the Federation of Canadian Municipalities and National Research Council.

The remainder of this report is divided into sections on timeline of the capital planning process,

preparation of projects at the department level, evaluation of projects at the corporate level, and other

findings. Appendices and a list of references are included after the conclusion.


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TIMELINE

Best Practices and Peer Research

A Capital Improvement Plan (Program), or CIP, is a short-range plan, usually four to ten years, whichallows municipalities to plan for, implement, and sustain capital projects. A well managed CIP

program provides numerous benefits to include:

Systematic evaluation of all potential projects at the same time.

Ability to stabilize debt and consolidate projects to reduce borrowing costs.

A focus on preserving a governmental entity'sinfrastructure while ensuring the efficient use of

public funds.

An opportunity to promote collaboration amongst departments.

Local governments should prepare comprehensive multi-year capital plans to ensure adequate long-

term management of assets. At minimum, a plan should cover three years, but preferably covers fiveor more.3The GFOA espouses that city staff, executive leadership, and the governing body review the

status of projects in the capital budget periodically, although it does not specify how often. Reports

should include whether the project is on budget, on schedule, has been modified for changes in service

level, and any other major changes.12It is generally recommended that cities begin reviewing potential

capital projects up to a year in advance of the budget allocation for thorough vetting and to avoid the

last minute cancellation of projects that were not carefully evaluated.

Edmontons CIP process currently encompasses a three year period and each CIP fiscal year parallels

the Budget Development process that operates on the fiscal year from January to December. Noted

below are milestones of the current CIP development process:

START

DATEEND DATE PROJECT PHASE

Jan-11 Mar-11 Data collection for renewal needs.

Mar-11 Apr-11 Developed Rating Criteria focused on the Corporate Outcomes.

1-May-11 31-May-11 Develop rating criteria based on the provincial model.

22-Jun-11 22-Jun-11 Direction setting meeting with Council.

Jun-11 5-Jul-11Growth Projects prioritization rating templates and renewal project listing completed

and submitted to Budget Office.

7-Jul-11 8-Jul-11 Peer Review for Growth Projects completed.

11-Jul-11 31-Aug-11Departments/Budget Office prepares draft Capital Investment Agenda and proposed

Capital Budget projects for CLT review.
http://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Public_fundshttp://en.wikipedia.org/wiki/Public_fundshttp://en.wikipedia.org/wiki/Infrastructure


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1-Sep-11Draft Capital Investment Agenda and Project list distributed to CLT and CPPC

members for review.

1-Sep-11 Complete Draft Business Cases for recommended projects.

6-Sep-11 Meeting with CLT to confirm the project list.

7-Sep-11 9-Sep-11Finalize project list based on CLT direction and submit to CFO for validation with CLT

members.

26-Sep-11New Project Profiles are submitted to budget office for review and distribution to CLT

members.

12-Sep-11 30-Sep-11 Finalize Capital Investment Agenda and Draft Capital Budget Documents.

3-Oct-11Distribute Capital Investment Agenda and Capital Budget Documents to CLT and

CPPC for final comment and feedback.

6-Oct-11 Final discussion and feedback received via CLT meeting.

7-Oct-11 14-Oct-11 Prepare presentation for Council.

17-Oct-11 21-Oct-11Information session with Council in private to review the details of the Capital

Investment Agenda and the Capital Budget.

26-Oct-11 Release of Capital Budget - Public presentation of the Capital Budget to Council.

24-Nov-11 25-Nov-11 Council Capital Budget Deliberations.

1-Dec-11 31-Jan-12 Finalize all approved Budget Documents based on Council approved budget.

Recommendations

The LICMA Team recommended timeline provides enhancements to what is already a very focused

and deliberate CIP development process managed by Edmonton. These enhancements respond to

input on the timeline received prior to and during our meetings with members of the Infrastructure

Team, Financial Services, the Corporate Leadership Team, and the Capital Project Planning Committee.

A review of best practice for CIP programs finds that five-year programs are most commonly found in

municipal governments within the United States and that local governments adopt a capital budgetannually in relation to the multi-year capital improvement plan. However, based on our site visit and

focused conversations with Edmonton CIP staff about the functionality and long-term approach to CIP

development and financing, we also researched municipal bond driven CIP programs. These programs

have a broader range of years with the most common being in the range of five to ten years. Municipal

bonds are securities that are issued for the purpose of financing the infrastructure needs of the issuing


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municipality such as streets, sewer and water systems, power utilities, and various other public

projects. They require a vote in general elections and must be approved by a plurality or majority of

voters, depending on the specific project in question. For example, in November 19, 2011, the City of

Vancouver held a municipal election where voters were asked to vote on whether the City could

borrow $180 million (about 25% of the $702 million Capital Plan). Voters approved the request thusallowing the City to borrow the money. In our research we found cities like San Francisco, California,

who addresses CIP through a ten-year bond supported capital plan. The City received voter approval

for its FY 2012-2021 of $24.8 billion in funding across all service areas and departments.

Based on our research findings, the LICMA Team believes the City of Edmonton would benefit from

encompassing a timeline of ten years as those found in municipal bond programs but disregard the

voter approval mechanism. Edmontons scale and thorough review process of capital project planning

mirrors that of municipal bond programs, but Edmonton is not required to seek voter approval as in

the United States.

The ten-year CIP timeline would include a three-year rolling update and appropriation. During the

presentation of the three-year CIP, Edmonton should provide an update of the ongoing projects that

includes the GFOAs best practices of reporting on the budget, the schedule, and any changes to service

level. Edmontons CIP review with Council should also coincide with the review of the progress for the

Citys strategic plan, The Ways. Also, the nexus of lining capital planning with Council elections was

not mentioned in best practice research and none of the peer cities aligned their CIP with their varying

local election cycles. For practical purposes, Edmonton should arrange the dates so that consultation

with Council does not immediately come before or after an election. If the province of Alberta moves to

four year cycles for Council terms, it should not otherwise impact the CIP, especially since there will be

a three-year update with Council.

In response to the need for better communication with Council and a better understanding of theirpriorities and challenges, the LICMA Team recommends a milestone earlier in the timeline that allows

for the Corporate Leadership Team to communicate with Council to determine their needs via a

process of them completing a weighted scoring matrix of strategic vision priorities . We found several of

the peer cities put Council development of priorities at the beginning of the timeline. Greensboro and

Ft. Lauderdale meet with the Council to discuss projects, criteria and financing capacity. Phoenix holds

public meetings with Council members in their district locations. Almost all of the cities incorporated

Council direction by linking the CIP to a strategic/comprehensive plan or to the Mayor or governing

bodys strategic goals.

To further enhance communication between the Corporate Leadership Team and Departments, the

LICMA Team recommends a milestone in the timeline that allows for the Corporate Leadership Teamto host a CIP Kick-off event with department level staff at the start of the CIP development process to

communicate:

Timeline, including deadlines and deliverables.

Process for how projects will move from preparation to evaluation to potential adoption.


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Council and CLT perspective with focus on integrating The Way.

Brief on business case form expectations.

Defining Growth vs. Renewal projects.

The business case criteria that correlate with the Citys comprehensive planning and strategic

visioning efforts(legal requirements, safety, grant funding, master plans, etc.).Following the CIP Kick-off event, the Corporate Leadership Team should follow-up with a Transmittal

Memo addressed to General Managers and their respective teams to echo in writing the message

delivered at the Kick-off event. In some cities, such as Austin and Baltimore, the transmittal memo

accompanies a CIP Manual with detailed direction and expectations. While a manual can take time to

develop, once it is created it can easily be updated with new details each cycle before the Kick-off

event. These steps would help ensure that Departments clearly understand the process, expectations,

and deliverables. Example manuals will be provided to Edmonton as addenda to this report.

The following revised timeline outlines the proposed milestones for Edmonton:

STARTDATE

END DATE PROJECT PHASE

JanuaryYear 1

MayYear 1

Data Collection: Establish renewal needs. Responsibility of departments andthe infrastructure team.

MayYear 1

JulyYear 1

Assess Financial Capacity and develop a financing plan: Responsibility ofCorporate Leadership Team, Finance Office and Capital Planning Office.

AugustYear 1

SeptemberYear 1

Council Perspective: Corporate Leadership Team communicates with Councilto determine their priorities and challenges. Completion of prioritizationscoring matrix.

OctoberYear 1

DecemberYear 2

Priorities, Vision, Rating Criteria: Responsibility of Corporate Leadership

Team, Finance Office and Capital Planning Office to interpret priorities:

Council Priorities

Departmental vs. Corporate: How do they align with Councils priorities?

Alignment with The Ways Guidelines/Vision and strategic goals.

Modify rating criteria if necessary.

January

Year 2

January

Year 2

Corporate Leadership Communicates CIP Vision to Departments: CorporateLeadership Team hosts a CIP Kick-off event and provides a follow-up

Transmittal Memo for General Managers and their respective CIP teams tocommunicate important guidelines.

FebruaryYear 2

JuneYear 2

Departments take inventory of existing capital needs. General Managersshould prioritize their CIP based on their service delivery needs.Consideration should be given to:

CLT Vision derived from kick-off event and transmittal memo.

Requirements for Growth.


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Complete Business Case Form for each CIP project.

JuneYear 2

JuneYear 2

All project deliverables are due to the Budget Office.

JulyYear 2

AugustYear 2

Budget Office Review: Allows for initial review Questions and Answers withDepartment to ensure complete information has been submitted.

SeptemberYear 2

NovemberYear 2

Draft Documents: Departments/Budget Office prepares draft CapitalInvestment Agenda and proposed Capital Budget projects.

JanuaryYear 3

FebruaryYear 3

CPPC Review and Prioritization: Draft Capital Investment Agenda and Project

list distributed to CPPC for prioritization using rating criteria.

MarchYear 3

MarchYear 3

CLT Consideration: Budget Office meets with CLT to review and confirm CIPpriority list derived from CPPC.

AprilYear 3

AprilYear 3

Final CIP List: Finalize project list based on CLT direction and submit to CFOfor validation with CLT members.

MayYear 3

JuneYear 3

Draft Documents: Finalize Capital Investment Agenda and Draft CapitalBudget Documents.

JulyYear 3

AugustYear 3

Finalize Documents: Distribute Capital Investment Agenda and Capital.Budget Documents to CLT and CPPC for final comment and feedback. Preparefinal documents.

SeptemberYear 3

SeptemberYear 3

Council Review: Prepare presentation for Council. Information session withCouncil in private to review the details of the Capital Investment Agenda andthe Capital Budget.

OctoberYear 3

OctoberYear 3

Council Deliberation: Capital Budget Deliberations.

DecemberYear 3

DecemberYear 3

Approved Documents: Finalize all approved Budget Documents based on

Council approved budget.

We believe these recommended changes to the timeline will help to alleviate communication issues

and deadline pressures that were a challenge for Edmonton in the most recent CIP development.


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PREPARATION OF PROJECTS


Evaluation and prioritization of capital projects is inevitably necessary in organizations because thesize and volume of projects typically exceeds available resources. 1 However, how projects are

evaluated and prioritized takes many forms. As part of the project submittal, ICMA recommends staff

submit a cost-benefit analysis. Some organizations may call an expanded version of this a business

case. While it may be difficult to identify all costs and benefits for public goods, a business case is still

an opportunity to vet out all aspects of a project. ICMA recommends the following five core pieces of a

business case1:

1.

Define the service-level objectives of the project.

2.

Identify alternatives to the project.

3.

Identify all costs and benefits associated with each alternative.

4.

Forecast future streams of costs and benefits over the expected useful life of the asset,

including operational costs.

5. Choose the alternative with the largest benefit in comparison with cost.

The GFOA also outlines twelve core pieces for preparing capital projects which are in line with ICMAs

core five. Additional detail includes relating the project to the citys long-term plans, developing a

timeline for the project, location and land use plans for the project, and identifying partners in the

project such as a federal source of funding or a joint venture with a nearby jurisdiction.2

Business cases range from the most rigorous mathematical formulas including discount rates, internal

rates of return, and opportunity cost, to flexible versions with a qualitative set of questions andanswers. Cost projections should include any potential assistance from partnerships, operations and

maintenance of the asset, and should anticipate costs of inflation in multi-phase projects. 3,4 InfraGuide

notes this business sector practice is becoming more common in municipalities and concurs with the

ICMA on presenting several alternatives for meeting the service need and that the case should make a

recommendation.4These cases can be more time intensive for staff and they may need training on how

to do it, but it can yield better information.4

In the LICMA Team research of peer organizations we found that most were not using business cases

as a distinct part of preparing capital projects. Austin, Ft. Lauderdale, Winnipeg, Greensboro and

Tacoma use business cases, but most are one or two pages. Typical information included project name

and other identifying information, a brief narrative description or justification, and project costs andfunding sources.

While not all using the business case method per se, Austin, Tacoma, Ft. Lauderdale, Winnipeg, Boston,

Greensboro and Phoenix include estimated operational costs of a completed project during project

preparation and when reporting to the public. According to InfraGuide, other examples of Canadian


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cities including operations and maintenance cost estimates in their project evaluation are Vancouver,

Toronto, Okotoks, and Caledon.

Recommendations

Edmontons business cases are quite extensive in comparison to other cities, some reaching upwards

of 50 pages with appendices. While Edmontons thorough business cases follow many of the best

practices outlined by professional organizations, the burden of staff to prepare such extensive work

and then review it at the CPPC level causes pressure on deadlines and overshadows the process.

Edmonton was also candid in revealing that some areas did not complete business cases at all. To meet

the timeline explained in the previous section and alleviate pressure on staff, the LICMA Team

recommends that Edmonton streamline the project preparation phase through several methods.

First, limit each of the twelve sections of the business case to one page maximum per section. If a

department wishes to provide additional supplemental material it can be attached as an appendix, but

the critical aspects such as description, cost, alternative plans and recommendations should besummarized in one page or less.

Second, the Executive Summary section of the case should be standardized to briefly summarize each

of the remaining sections. The CPPC and the CLT should be able to understand the most important

aspects of the project by reading only the executive summary.

Third, the business case template should be updated to include achecklist of criteria that correlate with

the Citys comprehensive planning and strategic visioning efforts, as further described in a later section.

Department staff should be using the scoring matrix as a guideline when developing projects. The

Checklist should be very user friendly so that Department staff can easily complete the questionnaire,

with an assisting Budget Office personnel member applying the appropriate scoring matrixprioritization, and the CPPC later verifying the correct application of scoring.

Even with robust business cases, it may not be clear which projects should be prioritized above others

due to the many and varied requests. ICMA recognizes six mainstream practices for prioritizing

capital budget requests, several of which are supported by other professional organizations. These

prioritization methods are explored later in the prioritization section.

Before moving on to the prioritization of projects, another step in preparing projects is to put them in

basic categories according to whether they are for the upkeep of existing assets or whether they

increase the asset portfolio and the operating budget obligation of the municipality.5 According to a

report by the Province of Quebecs Minister of Transport and Infrastructure, the average age ofCanadas core public infrastructure peaked in 2001 at 17 years. The report estimates that 50 percent

of Canadas infrastructure, much of which belongs to municipalities, will reach its useful life in 2027

and acknowledges that at this point, after a major economic recession, now is a critical time for Canada

to make decisions about infrastructure funding.6Canadas InfraGuide agrees, [Municipalities require]


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inclusive renewal programs that are long term and continuous. Infrastructure renewal programs must

go beyond merely catching up, they must promote long term infrastructure sustainability.7

However, it is important for municipalities to provide infrastructure to support growth as well, for

their economies and for the quality of life of their residents. When looking across professional

organizations and studies of cities, one does not find specific recommended policies for allocatingscarce financial resources among growth or renewal projects, only a general sense that renewal should

come first, and growth can be delayed temporarily if necessary.8 It can be difficult to find balance,

especially if the total cost of projects exceeds available funding, or if a significant number of assets

need replacement at the same time.

Infrastructure condition assessments inform a renewal program. There are many types of programs

and rating scales that can help assess the condition of assets, the probability of failure, and the risk

associated with the maintenance investment of the asset. 9 An advanced asset management strategy

includes risk assessments to plan for renewal/replacement, and includes performance measures to

incorporate service level objectives.9

Edmontons Risk-based Infrastructure Management System (RIMS) model is a leading example of such

advanced asset management systems. It uses the condition of assets to predict future amounts of

reinvestment for certain condition levels and associated risk if certain levels of investment are

delayed. If the RIMS model can be incorporated into the capital planning process along with the goals

outlined in each of Edmontons five Ways, it should provide a sound set of information for which to

begin prioritizing projects with limited funding resources and to tell an overall story about the state of

local infrastructure and the impact of decisions made today on the future of the city.

Limitations on the RIMS model include addressing functionality changes or demand changes in

expected service levels. However, these kinds of changes could be linked to goals in the The Way and

thus still incorporated into scoring mechanisms.

In researching peer cities we found that few had formal definitions of projects or adopted policies on

the allocation of funding to certain types of projects in the capital improvement plans. Milwaukee and

Boston had the most robust set of definitions. (See Appendix B)

Edmontons four definitions of growth, renewal, functionality and upgrade largely encompass the

same meaning as Milwaukee and Bostons project category defin itions. Additionally, Edmontons

recommended 60% renewal, 40% growth split of appropriated funding is typical of the trends we saw

among other cities. With the RIMS model, Edmonton has the best tool to provide risk-based

information to management and Council. RIMS, combined with relating The Ways into prioritized

scoring of strategic goals, will be a leading effort toward finding balance between renewal and growth.


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EVALUATION OF PROJECTS


ICMA recognizes six mainstream practices for prioritizing capital budget requests, several of which aresupported by other professional organizations. Many Cities incorporate multiple elements of each

strategy, hybridizing their prioritization process to suit their needs.

First, experienced-based judgment, as the name implies, is based on the knowledge of small group of

city staff. This process is often used by small- and medium-sized cities and has its obvious short-

comings in not adding value to a process for numerous or complex projects, as well as not having a

full-bodied set of criteria to explain the choices to others.1While this method is not recommended or

widely used for large cities, experience and good judgment still play a role during other prioritization

practices. Decision-making bodies of larger cities, such as Edmontons CPPC and CLT group s, still

employ experience and local knowledge when evaluating projects.

Second, the departmental service-level objectives method prioritizes projects according to their ability

to meet goals in a specific department or service area. Each service area may then be assigned a

certain allocation of dollars to stretch as far as they can down the list of projects. While this method

allows some projects to be implemented in every area, it does not support situations where the most

important projects may be concentrated in only a few areas due to reasons such as public health and

safety or serious infrastructure deficiencies. This allocation method limits the ability to meet

jurisdiction-wide goals.1 This method is commonly described as the envelope method of capital

project prioritization. The GFOA recommends that departments have the ability to initially rank

projects for their service areas, but other factors should also be applied and corporate level goals

should be utilized to ensure that the goals of the elected bodies, and thus the public, are being met.3

Third and fourth, by organizing projects according to broad categories of need and urgency of need,

there is an attempt to set criteria for high-priority projects across the organization and fund those

projects. Examples of high priority projects are those required by law, that protect public health and

safety, or that otherwise meet a top goal for the community. The GFOA also recommends prioritizing

projects with state/provincial or federal legal mandates.3Another possible criterion is when a project

has some other financial resources available, such as federal or provincial grant funding, or private

contributions by community groups.1 In our peer research we found that other cities often utilize

outside funding assistance as a key criteria for capital project selection. However, the practice of how

this selection occurred varied greatly. Some municipalities relied more on individual departments,

typically managing their own grants and outside funding resources, to prioritize their projects tomaximize outside funding assistance. Others, using a more corporate-based decision process, used

this as just one criterion among many. Our research indicated many cities experienced resentment

from departments whose projects rarely qualified for outside funding assistance and consequently

perennially were out ranked by others that received funding from outside sources.


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Other common categories of need found in other cities include (Adapted from City of Ft. Lauderdale,

Florida: Multi-year Community Investment Plan, We Build Community):

Consistency with existing, approved plans Promotes or accelerates sustainable economic development

Improves traffic, mobility, connectivity, pedestrian and cyclist safety Addresses environmental concerns (GHG reduction, resource reduction, water

conservation, waste reduction) Meets Federal, Provincial or legal requirements Meets life, safety and/or health requirements Project feasibility Relevant performance measures Costs (internal source, grant funding, operating cost reduction/increase) Extent of benefit

As mentioned earlier, using an asset management system to provide information for decision making

is a best practice, especially when gathering information for renewal projects and urgency ofreplacement. These systems are most helpful for large cities, like Edmonton, with vast networks of

assets. The often intense initial effort to set it up is worth the benefit of having a comprehensive set of

information with which to inform project prioritization.4

Commonly, projects that meet urgency of need for replacing core infrastructure, whether it be a

wastewater plant or servers that house the organizations data, do not have as much tangible feeling

for Council Members or residents. Organizations prioritization systems must be able to balance

replacement projects needed to keep core services operating, with new projects that add visible

community value. Definitions and trends in balancing renewal projects versus growth projects are

explored in the preparation section of this report.

The GFOA also recommends re-evaluating capital projects approved in previous multi-year capital

plans. Urgent needs or conditions can certainly change from year to year, both operationally and

politically.3

To achieve a more balanced list of priorities, many large communities use the fifth method, a weighted

rating system. In this method, each criterion is assigned a numeric weight or range of possible

minimum and maximum values. Putting together the value for each criterion then results in a totaled

score for each project used to rank the projects.1

Canadas InfraGuide and the GFOA also recommend a weighted ranking system.4Some attributes in a

weighted system include the consequences of failure, the opportunity to combine with other projects(replace sewer then road), the opportunity for alternative or supplemental funding, and return on

investment. 7,5,3

Budget, planning, and finance staff usually design the system, and the county or city manager

approves it before it is used to prioritize projects for inclusion in the capital budget and CIP. In some

local governments, the governing board as well as the county or city manager approves the specific


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ranking criteria and weights. In others, the governing board approves the use of the rating system but

does not review and approve the specific criteria and weights used to rank requests.1Some version of

a staff committee is then used to review the ordered ranking of projects. It is normal for there to be

some adjustment at this juncture, as the process is not totally objective and rankings may change as

group discussion evolves.1

According to InfraGuides research, elected officials most often chose external funding source, impact

on property taxes or user fees, and economic growth as the key parameters, for prioritizing projects.

Executive management typically chose, the impact on operation and maintenance, health and safety

risks, and effective levels of service. The public considered, the impact on property taxes or user

fees, public health and safety risks, and effective levels of service.7

Finally, using the advancement of organizational goals established by the governing board and the

community as the main criteria or one of the heaviest weighted criteria in a ranking system is also

common. Critical to the success of any formal priority system is gaining the understanding and

support of elected officials. It is the role of the city manager and finance officer to clearly articulate

how these objectives should be incorporated into the process.1,2 Using a strategic or master plan to

guide decisions is also recommended by InfraGuide and the GFOA.3,4 For instance, in Ft. Lauderdale,

Florida, the City Council ranks a mix of prioritization criteria for basic program attributes (legal

requirements, project feasibility, costs and other funding sources, performance measures, consistency

with other approved plans) and balances that with an additional weightings system involving the

impact on established strategic goals (infrastructure, environment, neighborhoods,

business/economic development, public safety).

When a weighted scoring matrix is utilized for the capital planning process, it is common for the

elected officials to review and approve the objectives used for prioritizing projects and participate in

facilitated sessions in which they set the system weights. Government entities that utilize thesemethods often also collect and manage specific capital project data that correlates to these objectives.

The key outputs from the system can even include an optimal funding curve which shows the set of

projects estimated to produce the greatest benefits for any given funding level. 10 However, all

prioritization systems are imperfect, as they are an aid for making decisions, not a decision making

device. When utilized, entities are better able to demonstrate to elected officials that investments in

infrastructure produce benefits that far outweigh the costs.10

Since master plans are the foundation of economic development, land acquisition and use,

transportation, and other major services that come to fruition through capital infrastructure, the GFOA

recommends that staffers directly relate elements of current master plan(s) into capital improvement

project requests. The CIP should be viewed as a financial blueprint that helps prioritize needs toachieve implementation of the public improvements identified in the master plan. The level of funding

in the CIP defines the financial capacity to reach the desired goals set forth in the master plan.11The

professional organizations also recommend using plans and service level goals developed by the

governing board and the community as a guide for developing capital projects. We found that the

majority of peer research cities are observing this practice. Milwaukee, Baltimore, and Ft. Lauderdale


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use the Mayor or Councils adopted strategic goals to guide project development at the departmental

level. Tacoma and San Jose staff look to the adopted master plan for their communities. Austin uses

departmental master plans, but will soon adopt a new comprehensive citywide plan that will be used

to guide capital planning. Greensboro meets with the Council in work sessions to receive direction and

guidance, while Phoenix staff meets with Council members and the community in district meetingsthroughout the planning year.

The LICMA team believes that Edmonton is accomplishing an interconnect with departmental master

plans and the CIP. The Edmonton CIP utilizes a set term, is subject to review and defines service level

goals with performance measures.4However, additional enhancements can be made in integrating this

with the decision-making process, even deep into the departmental prioritization and business case

development process.

Recommendations

Edmonton has recently evolved from a predominantly envelope type prioritization system to a morerobust system whereby a committee composed of departmental representatives from across the

organization prioritize capital projects based off of perceived organizational urgency and need. In

addition, over the last several years, components of the organizations strategic vision, The Ways, have

been adopted and its ethos has permeated the thinking of this prioritization committee. This has

enhanced the degree of corporate cooperation and unified goals in relation to capital projects.

However, shortcomings and difficulties have been identified and further refinement of the process has

been sought.

In interviews with the CPPC and the CLT, both groups explained how the newly formed CPPC group

and review process can be cumbersome. The group is very large and to some degree amorphous

throughout the entirety of the process. A significant amount of time and due diligence is dedicated tothe Edmonton Capital planning and evaluation process, which is a good thing. However, because of

competing priorities for time, the individual members of the CPPC may filter in and out of the multiday

evaluation process, with various departmental representatives filling in. This can lead to a somewhat

haphazard and inconsistent evaluation overall. The LICMA team recommends a reduction in the

overall membership of the CPPC, or perhaps breaking the CPPC process into two different filter

groups; a first filter and a second filter. The first committee being composed of a larger group made

up of individuals below the director or agency head level, with a second committee being made up of

directors and being more rigid in attendance and scope. The team also believes streamlining the

business case process may allow for less frequent and more productive meetings, which may help

improve consistent attendance.

The LICMA Team recommends that a checklist of The Ways strategic visioning criteria is incorporated

directly into the business case development process, preferably via a user-intuitive software system or

a template file. A system of simple yes and no questions, perhaps limited to less than 25, can quickly

identify to both the department preparing the project documentation as well as the CPPC, whether or


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not the project is accomplishing some of the major tenants of the corporate level strategic goals

outlined in The Ways. An example of this type of system can be found via the 14 questions the City of

Tacoma, Washington, utilizes in their capital project entry system (Appendix C) to ensure projects

comply with their very stringent, and state mandated, growth management policies. Another example

is the City of Austins prioritization questionnaire designed to demonstrate if projects support certainstrategic goals (Appendix D). An example adaptation for Edmonton could be, Does the project help

achieve a 3 year or 10 year target goal in one or more of the The Ways? with space in the template for

listing the goals or, if a computer program is used, selection areas could auto populate pre-loaded

goals from each Way.

The LICMA Team is recommending a switch to an ongoing preparation of the Capital Budget database

of projects upon replacement of the current database system. As such, an extensive amount of work

will be needed at the onset to build this database. However, after this initial effort, the ongoing effort

to maintain and update this database will be much more streamlined and the number of new entries

will be reduced. The LICMA team further recommends that each department continue to be assigned a

Budget and Finance representative to assist with and review their Capital Project submission, as abusiness case, to ensure that the appropriate level of due diligence and emphasis of corporate level

goals has been accomplished. While additional staff specific to Capital Planning are not being

recommended, the LICMA team is recommending this be a short term sub-assignment during the

Capital Planning project submission timeline. This will assist with the consistency of submissions and

eventually with the evaluation process of the CPPC.

A weighted matrix of strategic priorities should be established with the City Council during each three-

year cycle in relation to Capital Planning. While a corporate directive that allelements of The Ways

are essential, interconnected, and equal, some elements must naturally be weighted more than others

in the process of prioritizing the appropriate projects to fund with a limited amount of available

funding. The political entity is the only entity qualified to assist with this weighting. In addition, thisprioritization matrix should be completed during the recommended earlier meetings with Council,

prior to the preparation of the Capital budget and Departmental project submission, so that the CLT

can draft appropriate corporate level messaging to reflect changes in prioritization. Thus, a

reprioritization of both newly added capital projects as well as existing projects already identified on

the database can occur on a more periodic basis. The CLT and CPPC will very clearly and quantifiably

know the Capital priorities of the City Council early in the evaluation process, making the process of

confirming the selection of projects by the CLT and City Council easier later in the process. In addition,

departments will very clearly know the political weights of strategic goals as set forth by City Council

direction, and consequently their shifting focus of the elements identified in The Ways, and this

information will filter down into the business case preparation and project submission process,enhancing the overall quality of these submissions and corporate level thinking at the department

level. An excellent example for developing a weighted matrix for strategic goals is established via the

City of Ft. Lauderdale (Appendix E).


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While preparing the business cases the departments should be referencing the comprehensive plan

and the strategic visioning of The Ways documents. Specific elements in those documents should be

referenced so that explicit weighted points can be easily allocated to these projects and further

evaluated via the Budget and Finance Office and/or the CPPC. This will also help insure that the

corporate level priorities of the City, as decided by the City Council and the CLT, are incorporated intothe thinking of the departments project selection and preparation.

As each individual department is developing their business cases and evaluating the prioritization of

their projects, their departmental level master plans that have been completed with public input,

should be incorporated into the process. These should be referenced in the business plan as a cross

check to higher level decision making bodies, such as the CPPC and the CLT. This is an important

component to insure that public input is incorporated into the capital project process. Citizens are of

course allowed to speak at the annual budget process, but the information presented at these meeting

is often very high-level and beyond the scope of what the average citizen can truly comprehend at a

macro-level without spending an extensive amount of time digging into the details of the process and,

quite often, copious amounts of back-up documentation. Thus, a more informed degree of public inputcan be sought at the departmental master plan level, where interested citizens can more easily grasp

the identified needs and express their opinions to be incorporated into the process. A strong impetus

must continue to be placed on the departments to develop these master plans.

OTHER FINDINGS ON TECHNOLOGY ASSETS


When conducting best practice research on capital budgeting and infrastructure management, much of

the literature written well into the 2000s does not cover information technology (IT) infrastructure as

a basic asset category, nor the intricacies of how to plan for replacement and growth. Whiletechnology infrastructure such as public safety radio systems, network connections, servers, and

enterprise-wide software contracts are very expensive and complicated projects, much like water and

road networks, the useful lifespan is rarely 50 or more years. Technology changes so rapidly that long-

term debt is often not a sensible financing solution. Cities can find it challenging even to fund

organization-wide asset management software used to properly evaluate renewal projects for

traditional infrastructure such as street and bridge networks.

When researching peer cities, we found that most included major IT projects as part of the main multi-

year capital improvement plan. Milwaukee, Phoenix, Boston, Winnipeg, Tacoma, Greensboro and Ft.

Lauderdale include major projects in their capital plan and are funded with combinations of cash and

debt. Examples of projects included public safety radio systems, network security upgrades, enterprisewide software purchases or upgrades and server replacements. Austin reviews IT projects separately

from the main CIP process and funds projects with cash, lease, or limited short-term debt.

In recent years the GFOA has touted a business sector practice called IT Governance for state and local

government to use as a guide for IT strategic planning. IT Governance is an approach to technology


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management that incorporates the people at many levels of an organization, from executives to staff to

customers, into the process of technology planning. IT Governance engages people in an organization

to identify IT needs, prioritize IT projects, and measure results. Advantages of IT Governance include a

lower level of risk due to enhanced input and evaluation of projects and it provides for longer-term IT

planning for the organization.13

In the first two years of Austins IT Governance process, even after extensive review and prioritization

by two IT Governance committees, many new IT projects remained unfunded because of the need to

fund maintenance or critical replacement projects with only a limited amount of funding available to

do so. As Austin moves into the third year of IT Governance, staff continues to refine the process and

think strategically about prioritizing projects and exploring all funding options.

While a fully-fledged examination of updating IT Governance for Edmonton is outside the scope of this

project, some general lessons can be gleaned from the GFOAs basic plan and used as a guide to

identify strengths and weaknesses. First, like any renovation of a process, it takes time to implement

and perfect. Austin is still refining their process after two full budget years. Second, it can be beneficial

- for the purposes of efficiency and broadening the experience of participating staff - to make use of

existing committee structures within the organization. Just as it was once novel to evaluate road and

sewer projects via a cross-section of the organization, so it is now with bringing the unfamiliar and

evolving world of IT to their purview. Third, as has been mentioned previously in this report, it is

essential to establish an ownerof the process and an executive champion. A top executive must

support brining IT out of a silo and into the fold of capital improvement planning. Fourth, effective

written and oral communication with participants is critical to the success of the process, especially to

highlight shared values, provide instructions, and to foster feedback for continuous improvement.

Recommendations

In the future, IT infrastructure will continue to hold its importance in sustaining public services nearly

equal with other assets and functions of an organization.8 Finding a balance between renewal projects

that keep core communications systems running and growth projects that enhance efficiency is a

struggle that applies to IT just as any other asset category. Core systems must stay reliable to keep all

other services functional, but without some growth there is a potential for missed opportunity to

enhance services overall. As such an important and evolving asset category with immense

implications on financial planning, we recommend Edmonton continue to explore integrating its IT

budgeting process into the main capital planning process rather than keep an isolated process. Fairfax

County is an ICMA recognized leader in IT Governance and should be sought out for further

elaboration on how they have implemented best practices for incorporating IT projects into theiroverall corporate decision making process.

The Way espouses operational excellence and names IT as a specific tool for achieving this excellence.

The City of Phoenix incorporates IT as one of ten tenants in its new strategic plan. This tenant

supports improving customer service, increasing operation efficiency and enhances security. While IT


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does not have its own Way in Edmonton, it functionally supports the people in the organization

conducting business to implement The Ways and achieve the goals in the plan.

A potential method to better incorporate IT into strategic prioritization scoring is to ask if the project

supports or enhances a key service area that is a partner in achieving a three or ten year goal set out in

The Ways. Once IT projects have adequate translation in the corporate prioritization of projects,Edmonton can look at modifying the IT Governance process to meet the needs of preparing and

evaluating projects, which in turn will assist with developing a more comprehensive corporate capital

planning process. A set of recommended additional resources for evaluating IT Governance, including

contact information for Fairfax County, is provided in the references section of this report.

Additionally, Edmonton could develop a focused scope of study and submit for a project with the

Leadership ICMA Class of 2013.

CONCLUSION

Edmonton, Alberta, Canada is a leader in CIP process and has been very successful utilizing the processand procedures that are currently in place. However, despite these successes, Edmonton has faced

challenges with its CIP process as it has worked to upgrade and improve them.

The LICMA Team has identified these challenges and has worked to develop recommendations that

are designed to address these challenges and aid Edmonton in moving their CIP process to an even

higher level of performance. As demonstrated through this report, the major challenges and their

recommendations are as follows:

Challenge - Improve Council input and participation in the capital process to better

understand Council priorities and challenges in regard to capital budgeting and capital

projects. Recommendation- Amend the timeline for the CIP process to include earlier discussion with

the Council to gain their input and perspective , include a process of completing a weighted

scoring matrix of strategic vision priorities.

Challenge - Balance the effectiveness of capital project business cases with the staff time

dedicated to preparing them.

Recommendation - Limit the amount of content that can be included in each topic area,

standardize the business case summary sheet, and include a checklist of criteria within the

business case that correlate with the Citys comprehensive planning and strategic visioning efforts.

Challenge - Size and makeup of the CPPC can be viewed as large and somewhat amorphous,

and this condition leads to a dilution of the process.

Recommendation- Reduce the membership of the CPPC or break it into two groups that can

act as two filter stages for project evaluation and ranking.

The LICMA Team has also concluded that there are several key action steps that Edmonton can take to

further improve their CIP process. They are as follows:


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CLT should hold a CIP Kick-off event as a milestone within the process timeline.

Amend current CIP timeline to reflect definitive dates and deadlines.

Update database of projects on an as needed basis.

Develop a CIP manual for use by staff involved with the process.

Create a business case template (incorporate The Ways criteria in template). Provide business case training for branches.

Develop a project scoring matrix with Edmonton specific criteria related to The Ways.

Overall, the LICMA Team has been extremely impressed with the CIP team and process that Edmonton

has in place. The LICMA Team feels that the current practices in Edmonton can be used as a model for

other communities to use as a template for process improvements. However, through the

consideration and potential implementation of our recommendations and action items, we believe that

Edmonton can achieve even more success in capital planning and capital project prioritization.


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REFERENCES

Best Practice Resources

1. Capital Budgeting and Finance: A Guide for Local Governments, J. Marlow, W. Rivenbank, A.

Vogt, 2ndedition 2004, ICMA Press.

2. Capital Project Planning and Evaluation: Expanding the Role of the Finance Officer, J. Casey, M.

Mucha, 2007, Government Finance Officers Association of the United States and Canada.

3.

GFOA Best Practice: Preparing and Adopting Multi-Year Capital Planning, 2006,www.gfoa.org.

4.

InfraGuide Decision Making and Investment Planning: Planning and Defining Municipal

Infrastructure Needs, 2003, Federation of Canadian Municipalities and National Research

Council.

5. GFOA Best Practice: Presentation of the Capital Budget in the Budget Document, 2008,

www.gfoa.org.

6. Building for Prosperity: Public Infrastructure in Canada, Infrastructure Canada.

7.

InfraGuide Decision Making and Investment Planning: Investment Parameters for Municipal

Infrastructure, 2003, Federation of Canadian Municipalities and National Research Council.

8.

Prioritizing Capital Projects in a Suffering Economy, A. Abraham, PM Magazine, May 2009.

9. InfraGuide Decision Making and Investment Planning: Managing Infrastructure Assets, 2005,

Federation of Canadian Municipalities and National Research Council.

10.Prioritizing Projects, Lee Merkhofer, 2005, www.icma.org. For more information on CatawbaCountys experience, contact Barry Edwards at 828.465.8261 or [email protected].

11.GFOA Best Practice: The Role of Master Plans in Capital Improvement Planning, 2008,

www.gfoa.org.

12.

GFOA Best Practice: Incorporating a Capital Project Budget in the Budget Process, 2007,www.gfoa.org.

13.

GFOA Aligning Technology with Business through IT Governance Presentation Guide,

www.gfoa.org.
http://www.gfoa.org/http://www.gfoa.org/http://www.icma.org/mailto:[email protected]://www.gfoa.org/http://www.gfoa.org/http://www.gfoa.org/http://www.gfoa.org/http://www.gfoa.org/http://www.gfoa.org/mailto:[email protected]://www.icma.org/http://www.gfoa.org/http://www.gfoa.org/


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Peer City Resources

Austin, TXhttp://www.austintexas.gov/department/capital-planning/programs

Kimberly Springer, Capital Planning Office,[email protected],512-974-2924

Baltimore, MD

http://baltimorecity.gov/Government/AgenciesDepartments/Planning/CapitalImprovementProjects/CIPE

valuationCriteria.aspx

Sara Paranilam, Capital Planning Budget Analyst, Planning Dept., 410-396-5935

Boston, MA

http://www.cityofboston.gov/budget/

John Hanlon, Office of Budget and Management, 617-635-3490

Calgary, ABhttp://www.calgaryinfrastructure.ca/

Ft. Lauderdale, FL

http://ci.ftlaud.fl.us/documents/cip/2011-2015/index.htm

Greensboro, NC

http://www.greensboro-nc.gov/modules/showdocument.aspx?documentid=10509

Jerome Fletcher,[email protected],336.373.4365

Milwaukee, MN

http://city.milwaukee.gov/BudgetDocuments16655.htmJennifer Meyer, Budget Office, 414-286-3741,[email protected]

Phoenix, AZ

http://phoenix.gov/CITYGOV/budgridx.html ,http://phoenix.gov/BUDGET/bud11cip.html

Kevin Hodgkins, Budget Office,[email protected],602-262-4800,

San Jose, CA

http://www.sanjoseca.gov/budget/FY0809/documents/04.CapitalBudgetGuide.pdf

Walter Rossmann,[email protected],408- 535-8188

Tacoma, WAhttp://www.cityoftacoma.org/Page.aspx?hid=14480

Winnipeg, MB

http://winnipeg.ca/finance/documents_page.stm#Budgets
http://www.austintexas.gov/department/capital-planning/programsmailto:[email protected]:[email protected]://baltimorecity.gov/Government/AgenciesDepartments/Planning/CapitalImprovementProjects/CIPEvaluationCriteria.aspxhttp://baltimorecity.gov/Government/AgenciesDepartments/Planning/CapitalImprovementProjects/CIPEvaluationCriteria.aspxhttp://www.cityofboston.gov/budget/http://www.calgaryinfrastructure.ca/http://ci.ftlaud.fl.us/documents/cip/2011-2015/index.htmhttp://www.greensboro-nc.gov/modules/showdocument.aspx?documentid=10509mailto:[email protected]://city.milwaukee.gov/BudgetDocuments16655.htmmailto:[email protected]://phoenix.gov/CITYGOV/budgridx.htmlhttp://phoenix.gov/BUDGET/bud11cip.htmlmailto:[email protected]://www.sanjoseca.gov/budget/FY0809/documents/04.CapitalBudgetGuide.pdfmailto:[email protected]://www.cityoftacoma.org/Page.aspx?hid=14480http://winnipeg.ca/finance/documents_page.stm#Budgetshttp://winnipeg.ca/finance/documents_page.stm#Budgetshttp://www.cityoftacoma.org/Page.aspx?hid=14480mailto:[email protected]://www.sanjoseca.gov/budget/FY0809/documents/04.CapitalBudgetGuide.pdfmailto:[email protected]://phoenix.gov/BUDGET/bud11cip.htmlhttp://phoenix.gov/CITYGOV/budgridx.htmlmailto:[email protected]://city.milwaukee.gov/BudgetDocuments16655.htmmailto:[email protected]://www.greensboro-nc.gov/modules/showdocument.aspx?documentid=10509http://ci.ftlaud.fl.us/documents/cip/2011-2015/index.htmhttp://www.calgaryinfrastructure.ca/http://www.cityofboston.gov/budget/http://baltimorecity.gov/Government/AgenciesDepartments/Planning/CapitalImprovementProjects/CIPEvaluationCriteria.aspxhttp://baltimorecity.gov/Government/AgenciesDepartments/Planning/CapitalImprovementProjects/CIPEvaluationCriteria.aspxmailto:[email protected]://www.austintexas.gov/department/capital-planning/programs


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IT Governance Resources

IT Budgeting and Decision Making: Maximizing Your Government's Technology Investments , Shayne

Kavanagh, GFOA, 2009.

IT Governance Institutehttp://www.itgi.org/

IT Governance Institute City of Mesa, AZ, Case Study

http://www.itgi.org/Template_ITGIf528.html?Section=Case_Studies1&CONTENTID=9191&TEMPLAT

E=/ContentManagement/ContentDisplay.cfm

IT Governance Institute Board Briefing 2ndEdition

http://www.isaca.org/restricted/Documents/26904_Board_Briefing_final.pdf

Public Technology Institute,http://www.pti.org/

Harvard Business School Ten Principles of IT Governancehttp://hbswk.hbs.edu/archive/4241.htmlSample of North American cities/counties with pronounced IT Governance: Atlanta, GA; Indianapolis,

IN; Oakland County, MI; Nevada County, CA; Phoenix, AZ; Memphis, TN; Tampa, FL; Fairfax County, VA.

Fairfax County Contacts:

David Molchany, Deputy County Executive and CIO,[email protected]

Wanda Gibson, IT Director, 703.324.4521, or 703.324.3380,[email protected]
http://www.itgi.org/http://www.itgi.org/Template_ITGIf528.html?Section=Case_Studies1&CONTENTID=9191&TEMPLATE=/ContentManagement/ContentDisplay.cfmhttp://www.itgi.org/Template_ITGIf528.html?Section=Case_Studies1&CONTENTID=9191&TEMPLATE=/ContentManagement/ContentDisplay.cfmhttp://www.isaca.org/restricted/Documents/26904_Board_Briefing_final.pdfhttp://www.pti.org/http://hbswk.hbs.edu/archive/4241.htmlmailto:[email protected]:[email protected]:[email protected]:[email protected]://hbswk.hbs.edu/archive/4241.htmlhttp://www.pti.org/http://www.isaca.org/restricted/Documents/26904_Board_Briefing_final.pdfhttp://www.itgi.org/Template_ITGIf528.html?Section=Case_Studies1&CONTENTID=9191&TEMPLATE=/ContentManagement/ContentDisplay.cfmhttp://www.itgi.org/Template_ITGIf528.html?Section=Case_Studies1&CONTENTID=9191&TEMPLATE=/ContentManagement/ContentDisplay.cfmhttp://www.itgi.org/


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APPENDICES

Appendix A Timeline Research

Austin, Texas

The City of Austins CIP is developed for a period of five years. It is updated annually and reported on

the Citys web site. The CIP is developed and reported on the sa me time each year (December through

July/August) and does not coincide with Council elections that occur in May.

The Citys annual capital appropriation is proposed with the Citys Proposed Budget in July for

Councils consideration and approved in early September. The City Council can amend the Citys

annual Capital Budget but they do not vote on the CIP plan. The CIP is, however, considered and

recommended by the Citys Planning Commission.

Baltimore, Maryland

The capital planning budget is based on an annually reviewed 6 year rolling plan. The City Council and

their appointed boards review the 6-year capital budget every year. Council elections occur on non-

staggered 4 year terms. The City submits its CIP to the Mayors Office for their review prior to

recommendations being made to the citizen-led Planning Commission. The Finance office releases

capital plan budget targets to the Planning Dept. in late August and early September. The Capital

Planning division of the Planning Dept. releases targets to each Agency in late September (envelope

system). Agencies (departments) are expected to prepare their capital plan priorities and submit them

back to the Capital Planning division by the end of November. Final recommendations are made to the

Planning Commission (6 citizen reps, City Council rep, and Mayors Office rep) in early March. City

Council reviews in June. Capital Planning Budget runs parallel, but slightly ahead of Operating budgetcycle.

Boston, Massachusetts

Bostons CIP process encompasses five years with a review and renewal conducted on an annual basis.

Since Boston is a strong Mayor form of government, the Mayor and his staff prepare both the proposed

CIP and annual Budget which are then submitted to the City Council.

Calgary, Alberta

Calgary operates a CIP timeline of five years that ensures appropriate planning for required projects

and their related funding to demonstrate the complete impact of major, multi-year projects. Theannual capital budget is allocated based on the five year capital investment plan and is approved by

Council as part of the three year business planning and budgeting cycle.


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Greensboro, North Carolina

Greensboro operates a ten year CIP. A CIP Team reviews projects monthly and ranks them with a

scoring tool in preparation for a recommendation and discussion to Council that occurs in April with a

follow-up in May and adoption in June. CIP information is provided in report, PowerPoint

Presentation, and spreadsheet format with the approved CIP posted on the Citys website. The CIP is

reviewed and approved annually and does not intentionally tie in with the council elections which are

every two years.

CIP discussions with Council include priority of projects, construction start times, costs, bond issuance

capacity, etc. Staff recommends the projects and their order of completion with debt capacities and

how it will affect the tax rate and Council has the final approval.

The CIP and budgeting process occur parallel to each other. CIP projects are entered in the CIP

database used by employees in February and are vetted by the CIP Team through April. The final, CIP

along with the recommended budget, are submitted to Council in June for their consideration.

Ft. Lauderdale, Florida

Ft. Lauderdale operates a five year Community Investment Plan (CIP). A review and update occurs on

an annual basis. A major step in the CIP development is the prioritization matrix. The City Managers

Office develops and presents to the City Commission a prioritization matrix used to assist with the

evaluation and ranking of CIP project applications. The Commission provides input in regards to what

rating criteria is used as part of the prioritization matrix. The approved prioritization matrix is used to

develop the City Managers recommend CIP for consideration by the Commission.

Milwaukee, Wisconsin

Milwaukee operates as a Council-Mayor form of Government which makes the Mayor lead for

recommending the CIP and Budget to the Council. Milwaukees CIP is a sixyear plan that is reviewed

and updated annually with the operating budget. Any project equal or greater than two million is

reported in the annual budget document. The Accountability in Management (AIM) Team, consisting of

department managers and the Mayor, meet monthly to review project status reports that contain

information on timeline, expenditures and scope. The public and Council can use a web-based

database to find information on approved projects and track them through completion. Councilors

have four years term of office, all at once (not staggered). The most recent election was in 2012, so the

CIP overlaps a term of Council.

Phoenix, Arizona

Phoenix manages a five year CIP process that corresponds to the annual budget process. Departments

prepare and submit their respective projects in January for City Manager review and presentation to

Council in April. The City Manager must then present the recommended CIP to Council three months

before the budget adoption date. The requirement is mandated by state statute and typically lands in

May or June.


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San Jose, California

San Jose develops a five year CIP process that parallels the annual budget process. Updates of the

current fiscal year CIP are provided on an annual basis in report format. The report provides up-to-

date information on all projects, trends and issues of importance to the CIP program, including

schedule and budget constraints.

Tacoma, Washington

Tacoma maintains a five year Capital Facilities Program (CFP) which serves as a planning and financial

plan. It is a prioritization of the capital improvements the city intends to build and a plan for how to

pay. It is an important filter that demonstrates that the Capital Facilities Element of the

Comprehensive Plan is financially realistic. An annual update is developed and presented to the Citys

Planning Commission and to City Council.

Winnipeg, Manitoba

Winnipeg maintains a six year CIP developed and a preliminary capital budget for one year and a five

year forecast. The CIP is developed by the Mayor and the Corporate Finance Office and presented as a

recommendation to all members of Council in November. Prior to this, there is an opportunity for a

public consultation session and a review and recommendation by the Standing Policy Committee.

Council ultimately has the ability to review and provide feedback prior to approval.


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Appendix B Definitions of Renewal and Growth

Canadas InfraGuide defines the three asset categories as follows9:

Rehabilitation Works to rebuild or replace parts or components of an asset, to restore it to arequired functional condition and extend its life, which may incorporate some modification. Generallyinvolves repairing the asset to deliver its original level of service without resorting to significantupgradingor renewal, using available techniques and standards.

ReplacementThe complete replacement of an asset that has reached the end of its service life, toprovide an alternative that satisfies a targeted level of service.

Reinvestment Funds allocated to capital projects that are rebuilding the existing municipalinfrastructure asset base. New capacities and operations are excluded from infrastructurereinvestment decisions.

Milwaukee defines projects as follows:

Preservationa capital improvement project whose major objective is to reconstruct, rehabilitate, or

otherwise restore an existing systemor facility to full functionality.

Expansiona project whose primary objective is to construct a new system or to expand an existing

system or facility to meet increased demands or to enhance development.

In the most recent multi-year plan, Milwaukee allocated 64% of funding to preservation projects and

36% of funding to expansion projects.

Boston defines projects as:

Upkeepprojects that maintain existing assets.

New or Major Renovationnew facilities, new technology systems, major rehabilitations including

greening or sustainability initiatives.

Upgradeimprove existing assets by adding capacity or innovation.

Planningmaster planning facilities or programs to target future investments.

In the current plan Boston allocated resources to these categories by 53 percent, 23 percent, 22percent and one percent respectively.


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Appendix C Tacoma Comprehensive Plan Questions for Business Case

Templates


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Qnumb Q01

Question Text Mixed-Use Centers Is the project located within a mixed-use centeror provides connections between two or more centers?

Qnumb Q02

Question Text Housing Affordability Does the project have a positive impact onthe number, location, and quality of housing opportunities for familiesand individuals throughout the City?

Qnumb Q03

Question Text Multimodal Transportat ion Does the project address multiplemodes of transportation to safely and efficiently move people andgoods by accommodating and encouraging the use of transit, high-occupancy vehicles, bicycles and/or walking?

Qnumb Q04

Question Text Level of Service Will the project improve the level of service of afacility or meet the adopted LOS within the next six years?

Qnumb Q05

Question Text Facility Preservation Would the project preserve an existing capitalfacility, avoiding greater expense in future years?

Qnumb Q06

Question Text Essential Public Facilities If this project is defined as an EssentialPublic Facility, has the siting and planning occurred in compliancewith RCW 36.70A.200 and consistent with the Generalized Land UseElement policies pertaining to Siting Essential Public Facilities?

Qnumb Q07

Question Text Environmental Protection Does this project directly respond to theclimate change, conserve/preserve natural resources includingcritical areas and shorelines, and/or protect or improve air or waterquality?

Qnumb Q08

Question Text Open Space Does the project acquire, develop and improve theoptimum variety and number of recreation and open space facilitiesconsistent with the changing needs of the community?


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Qnumb Q09

Question Text Active Living Is the project designed to accommodate, facilitateand/or promote active living and physical activity, such as walking,bicycling, taking safe routes to school, and other recreational andsports activities?

Qnumb Q10

Question Text Economic Development Will the project make a significant positiveimpact on the local economy and/or tax base?

Qnumb Q11

Question Text Municipal Art Program Does the project qualify for the Municipal ArtProgram (TMC 1.28)?

Qnumb Q12

Question Text Arts and Culture Does this project strengthen the City's arts andcultural environment and attract more individuals to downtownTacoma, mixed-use centers or business districts?

Qnumb Q13

Question Text Historic Preservation will the project enhance and protect a historicbuilding, historic site or archaeological site?

Qnumb Q14

Question Text Cit izen Part icipation Did community members, neighborhood andbusiness district organizations, the general public, and pertinentgovernmental entities participate in the p

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