Demystifying the CIP Jim Nichols, P.E., ICMA-CM Assistant City Manager City of Midland, Texas Chair, APWA Engineering and Technology Committee any municipalities and public agencies have some form of capital plan that they generate to govern the implementation of major public improvement projects. These plans take all different forms, shapes and sizes depending on the many factors including the dollars available in the capital budget, staff expertise and available resources, to name just a few. But regardless of the type of plan that is used, there are a number of myths and misconceptions that can greatly hinder its effectiveness. The following are some of the “urban legends” associated with CIPs as well as suggested practices that can make it truly useful, user-friendly, and manageable. 1. “CIP” stands for Capital Improvement Plan. Though the acronym, CIP, is often referred to as a “plan,” this may not be the best way to describe it. Instead of thinking of the CIP as a rigid planning document comprised of capital projects, it can be more beneficial to look at the CIP as a Capital Improvement PROGRAM. When the CIP is approached from a programmatic perspective, it can then encompass the many facets of capital projects that go beyond just getting something constructed. Key components of capital projects including funding sources, overall project schedules and sequencing, resource availability, and project coordination can all be woven into the program and thus ensure that projects can be effectively managed. 2. If an outside consultant is used to manage capital projects 32 APWA Reporter
June 2012
then there will be no drain on internal staff. Oftentimes, administrators and elected officials will make the assumption that the use of outside consultants to manage and oversee CIP projects will completely free up internal staff to work on other competing priorities. And it is true that hired professionals can greatly relieve the workload on government staff compared to performing those same functions completely inhouse. However, what is sometimes lost in the equation is the need for someone to manage the external project manager. When a consultant is used to shepherd projects through to completion, there are progress meetings to be held, invoices to review, and unforeseen issues to address. These all require internal staff time. And depending on the political sensitivity of the projects being managed, the necessary staff time may be considerable. So regardless of when and where consultant services are used to assist in the implementation of CIP projects, be sure that internal resource demands are taken into account. 3. The CIP should just focus on a year’s worth of projects. Sometimes a CIP can just look like a list of projects. And when this occurs, it can create unrealistic expectations as to when and how projects will be delivered. Elected officials and the general public may be led to believe that all of the projects on the CIP will be completed within that particular fiscal year. With the complexity of projects being undertaken at the local level, we often see them extend well beyond a single year, especially when you consider all of the phases
including design, construction, closeout, etc. To only focus on projects over the course of a single year eliminates the ability to coordinate various phases and elements between different projects and also doesn’t allow longterm planning to occur. In addition, one of the less-considered factors to be reviewed in the development of a CIP is “resource leveling.” This is the evaluation of internal staff resources needed to manage projects within the CIP. The consideration of available resources allows the projects in the CIP to be shifted to match not only available funds but also the available staffing (i.e., “leveling”). This, in turn, prevents the need to have dramatic increases and decreases in staffing based on unnecessary peaks and valleys of CIP projects. A suggested way of developing and looking at the CIP is over a five-year period (though some agencies may choose to go much further into the future). Beyond the five-year horizon, a “bullpen” of outyear projects that fall outside that window can be maintained. And each year, as the CIP is updated, year two shifts into becoming the new year one with the rest of the CIP moving forward as well. Projects from the out-years are then brought forward to populate the new fifth year. In addition, as the CIP is updated each year, projects can be moved back and forth and in and out of the program based on changes in priorities, funding needs and so on. It is imperative that the CIP not be looked at as a rigid plan with no flexibility. Instead, it is a living document that ebbs and flows with the needs of the agency that is managing it.
