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Capital Improvements Guide

Fiscally Ready Communities Best Practices
Capital Improvements Guide

The Fiscally Ready Communities Capital Improvements policy guide supplements the local government’s process of developing a Capital Improvements Plan.

Fiscally Ready Communities Capital Improvements

A Capital Improvements Plan (CIP) is required by the Michigan Planning Enabling Act (PA 33 of 2008) for all cities, villages and some townships. A CIP must be adopted annually and show public structures and improvements in the order of their priority for the next six years. The recommendations outlined in the CIP should be based upon goals and recommendations contained with the community master plan.

PA 33 of 2008 requires the local planning commission (unless locally exempted) to develop the CIP. If the planning commission is exempted, then the legislative body or their designee must develop the CIP. If a township owns (or jointly owns) a water supply or sewage disposal system, it must have a CIP.

Michigan State University Extension has a useful checklist for the adoption of a capital improvements plan. Additional resources about a capital improvements plan can be found at MEDC’s Redevelopment Ready Communities Capital Improvements guide (Michigan Economic Development Corporation, n.d.).

Recommended Capital Improvements Policies

  • A policy stating that a CIP be developed and approved prior to adoption of the annual budget so recommendations in the CIP may be prioritized for funding.
  • A policy stating that the local planning commission and the legislative body must approve the CIP.

Capital Improvements Planning Process

  1. Identify process and roles best suited for community with available capacity
  2. Kick off meeting (opportunity for public involvement)
  3. Department heads complete project application forms
  4. Policy group scores all project application forms
  5. Administrative team ranks projects based on priority for community and available funding and drafts capital improvements plan
  6. Planning commission reviews and gives final edits to administrative team (opportunity for public involvement)
  7. Planning Commission adopts the capital improvements plan
  8. Governing body accepts the capital improvements plan
  9. Governing body adopts the municipal budget