This series features expert-led, action-oriented explainers focused on key finance topics. The series is intended to help leaders learn about the topic, apply proven practices, and access hands-on tools that can strengthen their approach. Learn more about the series here.
Capital Planning is a comprehensive strategy to plan, fund, build, acquire, maintain, and transition all natural, capital, and infrastructure assets.
As explained in the GFOA Best Practice on Capital Asset Management “the term capital assets is used to describe assets that are used in operations and that have initial useful lives extending beyond a single reporting period. Capital assets include major government facilities, infrastructure, equipment and networks that enable the delivery of public sector services.” More specifically, as stated in Statement No. 34 of the Governmental Accounting Standards Board assets also include “land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.” The GFOA Best Practices page also goes on to say “the performance and continued use of these capital assets is essential to the health, safety, economic development and quality of life of those receiving services.” The American Society of Civil Engineers conducts research on capital assets. Their findings are published in their Report Card for America’s Infrastructure. This report card provides information about the state of infrastructure across the country.
A Capital Improvement Plan (CIP) describes the capital investments the government intends to make over a multi-year period. Per GFOA’s Multi-Year Capital Planning document “a CIP is the basis from which final capital budgeting decisions flow annually. GFOA recommends that state and local governments prepare and adopt comprehensive, fiscally sustainable, and multi-year capital plans to ensure effective management of capital assets.
"The performance and continued use of these capital assets is essential to the health, safety, economic development and quality of life of those receiving services." (GFOA)
A prudent multi-year capital plan identifies and prioritizes expected needs based on a strategic plan, establishes project scope and cost, details estimated amounts of funding from various sources, and projects future operating and maintenance costs. A capital plan should cover a period of at least five or more.”
Governments who have never had a capital plan can start with three steps. First, governments should start with what they own by completing an Asset Register, which is a tool to show basic information about all capital assets. Common questions on an Asset Register include: What do you own, where is it located, what condition is it in, and what will it cost to replace?
Second, governments can work to establish basic capital planning policies standards for the CIP to establish a framework in which stakeholders understand their roles, responsibilities, and expectations for the process. Ideally, such policies also include guidelines for coordinating capital projects and promoting sound, long-term operational, and capital funding strategies. Third, governments can articulate how projects will be selected for inclusion into the CIP. This includes building processes to evaluate needs and projects that take into account desired level of service, funds, transparent criteria, criticality, and schedule.
The city of Tampa offers a strong example of how these capital planning practices can be put into action. As noted in its Capital Improvement Program (CIP), “capital improvement projects have a vital relationship to the degree and direction of community development.” The city’s approach reflects both thoughtful planning and clear communication. Tampa incorporates many of the best practices outlined above, particularly in how it engages the public. Its online, public-facing Capital Improvement Program Viewer is a standout tool that helps residents easily understand where and how investments are being made across the city. The platform is intuitive, regularly updated, and designed with accessibility in mind. In addition to an interactive map showing the location of projects, it includes a helpful FAQ and glossary to make capital planning concepts more approachable for a broader audience.
Kyle Wedberg, Senior Manager, Research & Consulting at the Government Finance Officers Association, has a professional career that has focused on government, education, and public service. He began his career as a City Year AmeriCorps volunteer in Boston, MA and later joined the staff and led new site development and the startup of City Year Baton Rouge, New Orleans, Johannesburg, and Los Angeles. He has served as a Senior Budget Analyst in the Office of Budget and Management for the City of Chicago; Deputy Chief Financial Officer of the School District of Philadelphia; Chief Administrative Officer of the Louisiana Recovery School District; and President and Chief Executive Officer of NOCCA-a performing and visual arts high school and agency of the State of Louisiana- where he was recognized as the outstanding national art school leader. Kyle is past chair of the New Orleans City Planning Commission and Volunteer Louisiana; chair of the National Art Schools Network; was an Aspen/Pahara fellow, a Norman C. Francis Leadership Fellow, and a Coro Fellow. In his spare time he enjoys being with his wife and son above all else, but also experiencing the arts, sights, sounds, food, and culture of New Orleans and any place he is fortunate enough to visit. Kyle walks this world having seen and experienced the New Orleans Saints and Chicago Cubs as World Champions. Kyle has a BA from St. Olaf College, an MPA from the University of Massachusetts at Amherst, and a Ph.D. in Public Policy from the Southern University and A&M College Nelson Mandela School of Government.
This resource was created for educational purposes only as part of the Rural & Small Cities Program, with the support of the Robert Wood Johnson Foundation. The views and perspectives presented in this resource are those of the author and the Public Finance Initiative team. The Public Finance Initiative acknowledges staff members Lourdes German, Katy Hansen, Richard Figueroa and Peter Hamlin for their contributions to this resource.
