What is the purpose of capital improvement policies?

The purpose of capital improvement policies is primarily to set guidelines for evaluating potential capital projects. These policies are essential for municipalities as they provide a structured framework that helps in assessing the feasibility, priority, and alignment of capital projects with the community’s long-term goals and objectives.

By having a clear set of criteria and guidelines, municipalities can effectively prioritize their capital investments, ensure transparency in the decision-making process, and align resources with the strategic vision of the community. This structured approach helps to ensure that funds are allocated efficiently and that each proposed project is assessed based on its merits, community needs, and availability of funding.

Establishing funding limits for operational expenses typically relates to budgeting work rather than evaluating capital projects. Creating a financial forecast for annual budgets is more aligned with ongoing operational management rather than the specific needs of capital improvements. Defining criteria for employee performance reviews is unrelated to capital improvement policies, which focus on investment in infrastructure and other long-term assets rather than personnel evaluation.