Capital Improvement Planning and Asset Management Flashcards

When preparing a capital improvement plan, which approach ensures that projects align with the agency's long-term strategic goals?

Answer: Linking each proposed capital project to adopted strategic plan goals and community needs assessments

A defensible CIP connects proposed projects to strategic plan priorities and documented community needs, ensuring capital investments advance the agency's mission and withstand public scrutiny.

What is 'life-cycle costing' in the context of capital asset management?

Answer: Estimating all costs associated with an asset from acquisition through operation, maintenance, and disposal

Life-cycle costing accounts for acquisition, installation, operation, maintenance, rehabilitation, and disposal costs to give decision-makers a complete financial picture before committing to a capital investment.

A general obligation (GO) bond for parks capital projects is typically repaid through:

Answer: Property taxes levied on residents within the jurisdiction

General obligation bonds are backed by the full faith and credit of the issuing government and are repaid through property tax revenues, often requiring voter approval.

Which document typically accompanies a parks capital project to analyze whether projected revenues or benefits justify the proposed investment?

Answer: Cost-benefit analysis or feasibility study

A cost-benefit analysis or feasibility study evaluates projected costs against anticipated financial returns, usage, and community benefits, helping leadership and governing bodies make informed investment decisions.

Which term describes the annual budget allocation specifically reserved to fund future capital asset replacements without taking on debt?

Answer: Capital replacement reserve fund

A capital replacement reserve fund (or sinking fund) accumulates contributions annually so that when an asset reaches the end of its useful life, funds are available for replacement without requiring new borrowing.

In a parks CIP, what does a 'five-year forecast' typically show?

Answer: Planned capital projects, estimated costs, funding sources, and phasing over a five-year period

A five-year CIP forecast presents each planned capital project with its estimated cost, identified funding source (bonds, grants, reserves), and the year(s) in which expenditures will occur, enabling long-range financial planning.

A parks executive is evaluating whether to renovate an aging community center or build a new one. Which factor is LEAST relevant to this capital decision?

Answer: Social media follower count for the facility's Instagram page

Social media metrics are a marketing indicator and do not inform the financial and service-level analysis required for a capital investment decision between renovation and replacement.