Prioritize your Capital Facilities Projects

Most jurisdictions find that they do not have enough money to cover all of the costs they’ve identified for capital facilities needs.  So before finalizing the Capital Facilities Plan, it is important to prioritize the projects and be sure that those deemed most important are the ones proposed for funding.

The Policy Decision Matrix is an excellent tool for prioritizing projects objectively.  The matrix applies 29 criteria that have been used commonly by many jurisdictions to measure the importance of a project.  Using these criteria can de-politicize decision making.

Note:  This form is a spread sheet.  That means that any jurisdiction can remove criteria or add new criteria.  However, it is highly recommended that no changes be made until after extensive experience applying this matrix in its original form.  The criteria that were selected have been carefully chosen to work in combination and to reflect the most common public sector values.  Also, having a large number of criteria helps in distinguishing among projects.  Cumulative scores sort out differences among proposed projects.  Fewer criteria could result in more projects “tying” for a given score.  Additionally, deleting one or more may change the relative importance of others.  Most jurisdictions have found that the criteria as suggested work quite well and that there is no need for change.

Before you start, notice that the Matrix has two tabs at the bottom:  1) In-put Form and 2) Summary Worksheet.  You will work entirely with the In-put Form.

First, complete the two left hand columns by adding the name of each capital facilities project and category of each project based on its related Comprehensive Plan chapter. 

Example:

In the example above, you see that “Field Number 2” is the first project listed, and its Program Area (the corresponding Comp Plan Chapter) is Parks.

Next, for each project, complete the matrix by filling in an “X” in each applicable cell where the answer to the question is “yes”.

example:

Once all of your projects have been entered on the matrix and the applicable “yes” cells have been filled in, then go to the far right column.  You can then identify the priority order of the projects.

example:

In this example, all of the columns between the project name and the total score were “hidden” so that the total scores are easily readable.

Which project rated highest and the order of priority the jurisdiction would give these projects relative to each other is now evident.  And the reasons are easy to explain, by comparing the criteria used.  Thus, if funding were not available for both projects, the Capital Facilities Plan would specify that the Main Street Sewer Extension would be funded in the utilities category, and that the park restroom project would be funded ahead of the picnic shelter or field projects.

Once the table has been completed, the projects can be sorted for program, making it easy to identify relative priorities within a given area.  To sort by program area, go to the Program Area cell (B-3).  Placing the cursor on that cell, note that there is a down arrow.  Clicking on the down arrow, you can sort by program area.  This brings the selected category to the top of the table and highlights it for ease of consideration.  In the example below, the projects were sorted for Parks.

example:

This makes it very easy to determine in what order projects should be funded within a since Comp Plan or funding category

 Determine when your capital facility project will occur

The timing of your capital projects is a complex mix of factors, including when the project is needed (and why), its priority relative to other projects, when funds are available, and the phasing needed to implement the project.  The timing of every project must be considered relative to the jurisdiction’s ability to fund it – and financing should be planned to accommodate natural phases of work.  Engineering often occurs a year or so ahead of construction.  Public involvement is needed throughout most capital projects.  And so on.

Example:
This hypothetical city has identified two priority projects for the next three to five years.  These include extending an arterial street into a newly annexed area to reduce commuter traffic impacts on the existing primary arterial in the area and construction of a new park for the neighborhood.  There are some mitigation fees available for the street, but these do not cover the full cost of the project; and the city has been able to get a grant for the park, but it covers only a portion of the park costs.  The city has also determined that it is desirable to have the homeowners in the newly annexed area hook up to sewer, though that was a lower priority overall.

In analyzing the project costs, it became clear that conducting the sewer project concurrent with the street construction would generate overall cost savings and reduce citizen frustration with street repairs.  Thus, the city decided to defer the park and emphasize the road and sewer project, planning them concurrently.  The project funding and timing are portrayed on the next page.  You will see:

• By combining the street and sewer projects, the city can save on permit, design and public involvement costs
• In 2009, the city will conduct design, obtain rights of way and permits, and commence public involvement.
• In 2010 and 2011, the city will construct the projects, and this will involve additional citizen engagement.
• The city will obtain separate grants for the sewer and road portions of the combined project
• The city will spend $1 million in mitigation fees collected previously for the transportation portion of the project, a little over $2 million from its street fund, and will use $65,000 of its sewer utility rates for the sewer portion of the project.
• The city also plans to borrow a low-interest loan of $1.5 million, which will be repaid over time with sewer fees collected within the area.
• The park project will be planned for 2011 or 2012.

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