J. CAPITAL INVESTMENT PROGRAM
It is the responsibility of the Capital Investment Committee to arrive at a "Prioritized List" of proposed capital expenditures for each fiscal year, to be recommended to the Board of Selectmen and Budget Committee. The recommendations are prioritized by reviewing all requests that are being considered by the Town Manager and Board of Selectmen. Each year, the Committee reviews all capital expenditure requests for items or projects that have a total cost greater than $7,500. The review process involves analyzing each project with regard to its effect on the quality of municipal services, impact on the tax rate, and on future operating budgets in the context of a ten-year projection for capital expenditures based on department head requests, considering the life expectancy of each vehicle or piece of equipment.
The Town of Sebago avoids borrowing money or leasing equipment whenever possible. Paying interest on a lease/purchase or, bonding for these items is spending good money for a bad purpose. Capital Reserve funds should be requested and FUNDED every year at the appropriate level so as to have the cash available to buy necessary equipment for the Town of Sebago.
The time to set aside funds for future expenditures is now. A wait and see attitude cannot accommodate a reasonable fiscal policy knowing that we have significant purchases to make in the future years. The economic viability of the Town and its future tax rates are continuously imperiled without good economic planning. We made a significant progress in our efforts to address the issues facing the Town in the coming years; we must fund these issues appropriately each and every year to avoid tax rate spikes in future years.
Road repaving and repair work should not be subject to this process because it is infrastructure work. It is advisable to have a 10 or 12 year paving schedule for road maintenance so the Board of Selectmen, the Department of Public Works, the Budget Committee and Town residents all have a clear understanding of what needs to be accomplished in future years.
Raiding the undesignated fund balance is never the appropriate way to fund any reserve account. Our fund balance should be maintained somewhere within the range of $950,000 to $1,250,000 to have two or three months of expenses on hand at all times. To withdraw money from the undesignated fund balance to fund reserve accounts when the balance is below $1,000,000 is not in the Town's best interests. Sebago is significantly below the Town's goal of having three times our highest monthly expenditures, as recommended by the professional auditors.
Having the necessary capital reserves would also provide economic flexibility by avoiding the need to raid the fund balance in order to obtain matching funds for future grants.
Replacement dates should be established for all Town equipment and both the replacement and the funding for those replacements adhered to regularly. The Capital Investment Program (CIP) takes the political will of the Board of Selectmen and the Budget Committee to convince the people at Town Meeting that this is the fiscally responsible way to proceed.