One of the primary reasons for a CIP is that the stakes are high because the projects are usually very large and very expensive. A second reason is that decisions made will impact the county financially for years. A third reason is that spending will vary from year to year because needs vary from year to year. A fourth reason is that the asset service life is long and should meet the citizens’ needs for the life expectancy of the asset. A secondary reason for a CIP is that the implementation of the projects will take time because of potential financing and purchasing or construction time.
In summary, reasons for a CIP include:
As of 2008, 91 of the 95 counties in Tennessee were in debt. This indebtedness is the result of capital improvements made within those counties. As of 2008, at least sixteen counties have a specific revenue source that annually funds a capital improvement fund(s). This is an increase of seven additional counties since 2006. Both of these statistics confirm that capital projects will continue to be a part of the annual operations of counties and should be considered in the overall planning process of a county’s finances.
It is highly recommended that a county develop a Capital Improvement Plan.