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Capital Improvement Program (CIP) Overview The Montana Legislature has passed legislation which allows a municipality to set aside up to ten percent (10%) of its general all-purpose levy for replacement and acquisition of property, plant or equipment costing in excess of five thousand dollars ($5,000.00) with a life expectancy of five years or more. To set up a capital improvement fund the City is required to formally adopt a Capital Improvement Program (CIP). The main advantage of this method of financing is that funds can be earmarked and carried from one year to the next. If it is recognized that renovation of a public building will be needed in five years, an amount can be set aside annually so the project can be funded at the end of five years. The CIP fund also allows a project to be done in phases, with funds allocated for architectural planning the first year and construction in later years. The Capital Improvement Program is a 5-year planning document designed to guide decisions concerning capital expenditures and not cast in stone. This is a planning document and, as for all planning documents, it is subject to revision in order to reflect changes in community needs and service requirements, environmental factors and Council priorities. The first year of the Plan is intended to accurately reflect that year’s anticipated appropriation for major capital projects and is called the Capital Budget. The subsequent four years represent an anticipated capital need during the period as submitted by Department Heads. The CIP must be reviewed and revised each year in order to add new projects and revise priorities. The process of determining major capital needs and establishing a financial program extending beyond the annual budget encourages department managers to examine long-range needs and allows the City to develop more coherent city-wide fiscal policies. The CIP provides a basis to compare and rank projects and provides opportunities to explore alternate funding sources, since most capital improvement requests exceed the available revenues. Further, the document is not intended to be cast in stone when the Council adopts it. This is a planning document and, as with all planning documents, it is subject to revision in order to reflect changes in community needs and service requirements, environmental factors, and Council priorities. The Council will be requested from time to time to make revisions to the plan. Staff, as well as Council members, may develop these requests themselves.