Planning and Zoning*A*Syst #9: Capital Improvement Programming (E3104)

Capital Improvement Program (E-3104) provides a review of the process of creating an annual capital improvement program (CIP).

Chapter 1: Introduction

The Community Planning and Zoning Audit is a comprehensive assessment of local government planning and zoning in Michigan. It covers basic topics and practices that members of every local planning and zoning entity should understand and should be doing. Each chapter of the Community Planning and Zoning Audit contains key points in the format of questions, checklists, and tables to assess your community’s land use planning and zoning, including the adoption and amendment process, day-to-day administration and record keeping, and decision making about special land uses, planned unit developments, and site plan reviews.

Purpose of the Audit

The Community Planning and Zoning Audit is intended for use by local units of government in Michigan to help perform a self-evaluation of the basics of the community’s planning and zoning system. The reason for doing an assessment is to learn of shortcomings and problems before they become controversial issues. As a result of going through this booklet, local officials will be alerted to things that need “fixing” and deficiencies in the community’s files. The document helps accomplish three objectives:

1. Identify liability risks from not following proper procedures and practices, and not having adequate documentation of those procedures and practices.

2. Learn to better manage the planning and zoning administration in your community.

3. Take corrective steps to improve your planning and zoning system.

Organization and Content

This publication is one of a series of 11 Michigan State University Extension Community Planning and Zoning Audits available to walk a community through a performance audit. Topics are:

1. Basic Setup (MSU Extension bulletin number E-3051) makes sure that your planning commission and zoning board of appeals are set up properly and a system is in place to make sure the community keeps up-to-date.

2. The Plan (E-3052) reviews the process of plan and plan amendment adoption (to make sure that it was done properly) and reviews of an existing plan to determine if it needs to be updated, and reviews what should be in a plan.

3. Planning Coordination (E-3053) covers the process of coordination with neighboring government planning (review of each other’s plans); coordination with state, federal and other government agencies; coordination practices; and joint planning commissions.

4. The Zoning Ordinance (E-3054) reviews the process of zoning ordinance and zoning amendment adoption (to make sure that it was done properly) and what needs to be in the file to document that the proper steps were taken. This publication also reviews what should be in a zoning ordinance.

5. Administrative Structure (E-3055) provides a performance audit for the operation of the planning commission, zoning administrator, and zoning board of appeals. It covers office procedures, job descriptions, filing systems, bylaws, rules of procedure, compliance with the Open Meetings Act, minutes, and process for meetings and decision making.

6. Special Land Uses (E-3056) provides a review of the administrative structure for handling special use permits: pre-applications, applications, public notification, record keeping, and use of standards in making decisions.

7. Planned Unit Development (E-3057) provides a review of the administrative structure for handling planned unit development handled as a special use permit and as a zoning amendment: pre-applications, applications, public notification, record keeping, and use of standards in making special use decisions or basis in the plan for zoning amendment decisions.

8. Site Plan Review (E-3058) provides a review of the administrative structure for handling site plan reviews: applications, public notification, record keeping, and use of standards in making decisions. 9. Capital Improvement Program (E-3104) provides a review of the process of creating an annual capital improvement program (CIP).

10. Subdivision and Land Splitting Reviews (E-3105) provides a review of the administrative structure for handling land divisions, subdivisions or plats, site-condominiums, lot splits, and certified plats: pre-application meetings with the developer, public notification, plat review, record keeping, and use of standards in making decisions.

11. Capital Improvements Review (E-3106) provides a review of the process for the planning commission to review and comment on local government construction projects (which are otherwise not subject to zoning), and outlines how this review can be used as a constructive way to ensure that government-funded projects comply with the adopted plan and local ordinances.

Each of these Community Planning and Zoning Audits is available at http://web2.msue.msu.edu/bulletins/subjectsearch.cfm and http://www.msue.msu.edu/lu and f,rom your county Extension office.

How to use the Audit

The Community Planning and Zoning Audit is not difficult to complete. However, it does take time and the ability to search for and find various records in your local government. The actions taken as a result of this exercise should help reduce liability risk and improve your community’s planning and zoning program.

The Community Planning and Zoning Audit can be utilized by local units of government in a variety of ways. A community can go through this booklet as a group (e.g., the planning commission or a subcommittee) or a community can have an individual do so. The advantage of performing the assessment as a group is that reviewing the community’s documents and files in detail is a great educational experience for local officials. Alternatively, a staff person within the planning department may be able to perform the audit quicker because of having greater familiarity with how the unit or government maintains its records.

Additionally, a community can perform the Community Planning and Zoning Audit with certain chapters reviewed by various groups or individuals. For instance, the planning commission could review a few chapters of the audit while the zoning board of appeals addresses another set, and the legislative body performs the evaluations in the remaining chapters. Regardless of the approach taken, the main idea is to take the time to find out where various documents are and to make sure that proper documentation is on file. Then, where necessary, take action to correct any shortcomings.

Upon completion, if your community still has questions or wants help, please contact your county Extension office. They can contact the Michigan State University Land Use Team to provide further assistance and educational programming.

Organization and Content

The Community Planning and Zoning Audit contains the following chapters:

1. Introduction. 
2. The Plan. 
3. Smart Growth

The audit is based on Michigan Public Act 110 of 2006, as amended (the Michigan Zoning Enabling Act, M.C.L. 125.3101 et seq.), Public Act 33 of 2008 (the Michigan Planning Enabling Act, M.C.L. 125.8101 et seq.), recommendations from members of the MSU Extension Land Use Team, and intergovernmental coordination and plan content “best planning practices” derived from a proposed Coordinated Planning Act developed by the Michigan Association of Planning.

The Community Planning and Zoning Audit is not designed to be a substitute for reading and understanding the Michigan Zoning Enabling Act or the Michigan Planning Enabling Act. Nor is this document a substitute for legal advice or for professional planner services. It is important to document each step of the process in planning and zoning a community. Keep detailed minutes, affidavits of publication and mailing, open meeting notices, letters of transmittal, and communications all on file so that years from now they are still available.

Defined Terms

Appeals board” means the zoning board of appeals (ZBA).

Certified” (resolution, minutes, ordinance, etc.) means the keeper of the records for the local unit of government (secretary of the planning commission or clerk of the local unit of government for the planning commission or the clerk of the municipality for the legislative body) provides an affidavit that the copy provided is a true and accurate copy of the document.

Elected official” means a member of a legislative body.

Legislative body” refers to the county board of commissioners of a county, the board of trustees of a township, the council of a city or village, or any other similar duly elected representative body of a county, township, city, or village.

Local unit of government” means a county, township, city, or village.

Municipality” means a city, village, or township.

Plan” means any plan or master plan adopted under the Michigan Planning Enabling Act or one of the three former planning acts, regardless of what it is titled.

Planning commission” means a zoning board, zoning commission,1 planning commission, or planning board.2

1On or before July 1, 2011, the duties of the zoning commission or zoning board shall be transferred to a planning commission. Thus, the zoning commission or zoning board will no longer exist (M.C.L. 125.3301(2)). 
2Starting on Sept 1, 2008, “planning boards” need to be named “planning commissions” even if a charter, ordinance, or resolution says otherwise (M.C.L. 125.3811(1)).

Chapter 2: Capital Improvement Programming

The purpose of this chapter is to help determine if best planning practices and minimum legal requirements are being used to create, adopt, and update capital improvement programs. A capital improvement program (CIP) is a prioritization of various infrastructure and public improvement projects that need to be constructed to successfully implement a community’s adopted plan. The expenses for constructing the physical facilities and infrastructure are often substantial and are spread over several years. The expenses incurred are a capital expense (not part of the operating budget) and need to be prioritized across the whole community to protect the public interests. A capital improvement program covers a six-year time period. The capital improvement program should take into consideration the requirements of all of the departments and agencies in the local government and shall include, in general order of priority, the public improvement projects that will be undertaken in the ensuing six-year period.

All local units of government, except those townships that alone or jointly with one or more local units of government do not own or operate a water supply or sewage disposal system, are required to prepare and update a capital improvement program each year.

You will need the following items for this review:

• Copy of the formally adopted master plan.

• Copy of the documents or legislative body meeting minutes showing the body or individual responsible for preparing capital improvement programs.

• Copy of the present capital improvement program.

Question

Affirmative (we are doing it) answer

Negative (need to correct) answer

Action to correct has been done

1. Is there a master plan that has been adopted by the planning commission following each of the proper steps for adoption (see Plan *A* Syst Community Planning and Zoning Audit #2: The Plan)?

Yes

Good. Go to the next question.

No

Having a plan on which capital improvement expenditures is based is a best planning practice. Consideration to amend this should be a priority

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

2. Does the township alone or jointly with one or more local units of government own or operate a water supply or sewage disposal system?

Yes or N/A

Continue to next question.

No

As per the Michigan Planning Enabling Act, the township is exempt from preparing and updating a capital improvement program each year. However, as a best practice, the township may still choose to prepare an annual CIP.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

3. Is the planning commission of the city, village, township, or county responsible for preparing, adopting, and updating the CIP annually?

Yes

Good. Go to question #6.

No

As per the Michigan Planning Enabling Act, the legislative body by local unit of government charter or otherwise can expressly exempt the planning commission from CIP duties. Go to question #4 to determine compliance with CIP preparation requirements.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

4. If the legislative body does not want the planning commission to prepare CIPs, then has the legislative body by local unit of government charter or otherwise expressly exempted the planning commission from annually preparing a CIP?

Yes

Good. Go to the next question.

No

This is required by the Michigan Planning Enabling Act.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

5. If the planning commission has been expressly exempted from annually preparing a CIP, then:

1. Does the legislative body annually prepare a CIP separate from or as part of the annual budget?

OR

2. Has the legislative body delegated the preparation of the CIP to the chief elected official or a non-elected administrative official?

Yes

Good. Go to the next question.

No

This is required by the Michigan Planning Enabling Act. If the legislative body has expressly exempted the planning commission from preparing a CIP and the responsibility is not delegated elsewhere, then the legislative body must prepare a CIP annually.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

Getting ready to Prepare the Capital Improvement Program

6. Does the planning commission, legislative body, or individual responsible for annually preparing a CIP set up a CIP advisory committee consisting of volunteers from the community or a combination of volunteers and representatives from each department within the local unit of government?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

7. Is the planning department or staff (if one exists) involved in preparing and coordinating the capital improvement process and plan on behalf of the planning commission, legislative body, or individual responsible for annually preparing a CIP or the CIP advisory committee?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

8. Does the planning commission, legislative body, or individual responsible for annually preparing a CIP include the following individuals, agencies, and departments in preparing the capital improvement plan?

1. Chief executive (city manager, township manager, county controller/administrator, supervisor, city mayor, village president, etc.).

2. All departments within the government (department heads)

3. Finance and budget department: the financial office or the person responsible for conducting the financial analysis and projections on costs and revenues for a capital improvement program and determining the best possible means to finance each capital project.

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

9. At the start of the CIP process, does the planning commission, legislative body, or individual responsible for annually preparing a CIP prepare an inventory of all existing capital facilities?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

10. To assist with the preparation of this inventory, does the planning commission, legislative body, or individual responsible for annually preparing a CIP request, from each agency or department of the local unit of government that has authority for public structures or improvements, information on the existing level of service for each infrastructure element?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

11. Does the planning commission, legislative body, or individual responsible for annually preparing a CIP request, from each agency or department of the local unit of government that has authority for public structures or improvements, an annual inventory of desired public improvement projects with lists, plans, and estimates of time and cost involved?

Yes

Good. Go to the next question.

No

This is required by the Michigan Planning Enabling Act. The agency or department of the local unit of government upon request is required to furnish information about public structures and improvements to the planning commission, legislative body, or individual responsible for annually preparing a CIP. Start to do so immediately.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

12. Before starting the process of organizing the public structures and improvements in a general order of priority, does the planning commission, legislative body, or individual responsible for annually preparing a CIP make use of expert advice and information from the planning department and/or contracted private consultants on some of the following elements?

1. Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements and Management’s Discussing and Analysis For State and Local Governments.

2. Population studies.

3. Economic studies.

4. Land use maps.

5. Future plans.

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

Prioritizing and Preparing the Capital Improvement Program

13. Before preparing a draft CIP, does the planning commission, legislative body, or individual responsible for annually preparing a CIP review each project to determine the conformance of the projects with the community comprehensive plan, development policies, and the objectives and goals of the community?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

14. Does the planning commission, legislative body, or individual responsible for annually preparing a CIP develop a formal set of criteria to rank the projects in order of importance that at a minimum considers the following?

1. Description, location, and purpose of the project.

2. Justification for the need for the project.

3. An explanation of its relationship to other projects.

4. The cost of the project (submit detailed budget).

5. Estimation of annual income from project.

6. Estimation of annual operation costs for the project.

7. Status of plans/specifications for the project and how long it will last or how long it will take to complete.

8. The year that construction of the project should start.

9. The rank/importance of the project within the department submitting it.

10. Cost/benefit ratio.

11. Whether the project addresses identified community concerns such as environmental, health and safety impacts, and energy consumption.

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

15. Before preparing a draft CIP, does the planning commission, legislative body, or individual responsible for annually preparing a CIP provide an opportunity for agencies to present their arguments for including any given project in the program?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

16. Does the prioritized draft CIP include at a minimum the following elements?

1. A ranking of selected projects based on established priority criteria and available funding.

2. Name and location of proposed public facilities.

3. Date of construction.

4. Sponsor or department responsible.

5. Project summary.

6. Approximate cost of construction.

7. Funding source for each project

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

17. Does the draft CIP identify projects to be undertaken in the coming year as part of the capital budget?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

18. Does the draft CIP include the remaining selected projects as part of the capital improvement program for the subsequent five years?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

19. Does the planning commission, legislative body, or individual responsible for annually preparing a CIP incorporate some form of public review into the decision-making process – e.g., a public hearing on the proposed CIP?

Yes

Good. Go to the next question.

No

This is recommended but not required. If desired, this process should be initiated as a best practice as soon as possible.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

20. If the planning commission is the body responsible for preparing and updating the CIP annually, then, after the public review process, does the planning commission, on the basis of the CIP advisory committee (if one was appointed) or administrator/staff recommendations, formally approve and adopt the proposed capital improvement program?

Yes

Good. Go to the next question.

No

The planning commission does not approve the CIP recommended by the planning staff or CIP advisory committee. Go back to Step #8.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

21. After formal adoption of the CIP by the planning commission (if the planning commission of the city, village, township, or county is the body responsible for preparing and updating the CIP annually), is the CIP forwarded as a recommendation to the legislative body for final approval?

Yes

Good. Go to the next question.

No

This is required by the Michigan Planning Enabling Act. The legislative body needs to formally approve and adopt the CIP before it can be implemented. The legislative body also has final authority over what is or is not included in the CIP, so it can adopt the CIP with modifications.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

22. After final approval and adoption by the legislative body, does the planning commission, legislative body, or individual responsible for annually preparing a CIP review and update the CIP annually?

Yes

Good. Go to the next question.

No

This is required by the Michigan Planning Enabling Act. Start to do so immediately.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

23. A few months before the end of the current fiscal year, does the planning commission, legislative body, or individual responsible for annually preparing a CIP review the next year’s proposed capital projects to determine whether the projects still help fulfill the community’s current planning goals and objectives?

Yes

Good. Go to the next question.

No

This is required by the Michigan Planning Enabling Act. Start to do so immediately.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

24. A few months before the end of the current fiscal year, does the planning commission, legislative body, or individual responsible for annually preparing a CIP (with staff assistance, if available) reexamine the entire CIP and prepare an updated CIP with revised costs, funding sources, timings, etc., for a new sixth year?

Yes

Good. Go to the next question.

No

This is required by the Michigan Planning Enabling Act. Start to do so immediately. Go to step #6.

Check this box:

To indicate this is an improvement that needs to be done.

Check this box:

To indicate when improvement is done.

Chapter 3: Smart Growth

The purpose of this section is to provide basic information and introduce communities to the 10 tenets of smart growth. Covered here are the basics necessary for the administration and operation of zoning. If your community is interested in incorporating the principles of smart growth into its ordinances and develop according to the smart growth principles, the Smart Growth Readiness Assessment Tool (SGRAT) can be used to guide your community through an evaluation of the plans and implementation tools currently used to guide growth. This assessment can also help your community identify tools that may help produce a smart pattern of growth in the future.

This document represents the first stage of a community assessment. To go on to the next step in assessing your community’s planning and zoning, you should review the Smart Growth Readiness Assessment Tool on the Internet. Go to http://www.landpolicy.msu.edu/sgrat/.

  1. The Governor’s Land Use Leadership Council used the following smart growth tenets for many of the recommendations contained in its report 4 on land use in Michigan. These 10 tenets can form the basis for establishing a set of state land use goals.
    1. Mix land uses.
    2. Compact building design.
    3. Increase housing choice.
    4. Encourage walking.
    5. Offer transportation variety.
    6. Create a sense of place.
    7. Protect farms, unique natural features, open spaces.
    8. Direct new development to existing communities.
    9. Make development process fair, predictable, efficient.
    10. Involve stakeholders.
  2. What is smart growth?
    1. Smart growth is development that serves the economy, the community, and the environment.
    2. It provides a framework for communities to make informed decisions about how and where they grow.
  3. Why smart growth? It makes dollars and sense because it is financially conservative, environmentally responsible, and socially beneficial.
    1. Financially conservative
      1. Makes responsible use of public money.
      2. Reuses existing buildings.
      3. Uses existing roads and highways.
      4. Uses existing water/sewer infrastructure.
      5. Uses higher density to maximize the value of publicly funded facilities and services.
      6. Keeps taxes and public service costs low.
    2. Environmentally responsible
      1. Uses and/or reuses developed areas.
      2. Keeps impervious surfaces to a minimum by concentrating dense development.
      3. Builds to fit existing land rather than changing the land to fit what is built.
      4. Avoids oversized lots and yards to reduce excessive mowing, fertilizing, etc.
    3. Socially beneficial
      1. Encourages people to live close enough to one another for comfortable interaction.
      2. Designs residential area sfor conversation from the sidewalk to the front porch.
      3. Encourages “eyes on the street” at all hours to reduce crime and fear of crime.

4Smart Growth Network. Getting to Smart Growth. Washington, D.C.: Smart Growth Network. [Online, cited 8/3/03.] Available at: http://www.smartgrowth.org/PDF/GETTOSG.pdf For more details and examples, see http://www.smartgrowth.org/pdf/gettosg.pdf<./sup>

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