Learn About the Morris County NJ Capital Budget

Capital BudgetingWhat it is. How it works.

Morris County Office of Public InformationJanuary 2013

Definitions

Morris County’s Capital Program

Morris County’s Capital Planning Process

1Authority

1AuthorityAuthority

• In NJ, a capital budget does not appropriate or authorize the expenditure of any funds.

• All appropriations are made by:– An allocation in the current budget; or– Local ordinances; or– Ordinances specifying the expenditure and funding

source, which may be the Capital Improvement Fund, the capital fund balance, or a reserve for a specific project or improvement.

– Ordinances are adopted by a governing body after a public hearing.

– Bond ordinances require a super-majority to pass.

1Authority

1AuthorityAuthority

Authority to Spend for Capital ProjectsAuthority to Spend for Capital Projects

Understanding Budget TermsUnderstanding Budget Terms

• Capital Program

• Capital Plan

• Capital Budget

• Capital Project

• Facilities Committee

• NJ Division of Local Government Services (DLGS)

Definitions

A Capital ProgramA Capital Program• Provides a long term outlook.

• Is a multi-year planning tool.

• Is an evolving plan that is responsive to changing needs and priorities.

• Shows individual projects, slated into a particular year for planning purposes only.

• By law, must cover a minimum of a six year period at the county level.

• Does not allocate or appropriate any funds.

Definitions

2014 2015 20172016

The Capital PlanThe Capital Plan

20182013

• NJ’s “Local Budget Law” requires each county to adopt a capital plan each year.

• Morris County’s capital plan focuses on public safety, education, and infrastructure projects.

• Morris County’s capital plan anticipates future needs but does not fund them.

Definitions

The Capital BudgetThe Capital Budget• NJ’s “Local Budget Law” requires each

county to adopt a capital budget each year.• Every county uses the same budget format,

designed by DLGS. The capital budget starts on sheet 39.

• The capital budget is the first, or current year, of a capital program.

• A capital budget will contain various anticipated capital projects.

Definitions

Capital ProjectsCapital Projects• Individual capital projects make up the capital

budget.• Examples of capital projects include:

– Road and bridge improvements– Park improvements and renovations, including

design and construction of new recreational facilities– Building improvements, construction (including

County College of Morris, MC School of Technology, as well as various County buildings)

• Capital projects must have a useful life of 5 years or more.

• The maximum useful life is 40 years.

Definitions

Facilities Review CommitteeFacilities Review Committee

• Membership includes 3 Freeholders and county staff

• Meetings are held monthly

• Reviews details of current projects, including on-site visits

• Reviews six-year program and long range project scheduling

• Reviews and monitors capital ordinance schedule for the year

Definitions

Division of Local Government ServicesDivision of Local Government Services

• Provides technical and financial assistance to local governments in budgeting, financial reporting, joint services, purchasing, and management issues.

• Responsible for the financial integrity of all local government units.

• Reviews and approves all municipal, county and fire district budgets.

Definitions

Capital Management: A Full Year ofCapital Management: A Full Year ofPlanning, Budgeting, PurchasingPlanning, Budgeting, Purchasing

Facilities Committee sets capital budget target

Department heads, Constitutional Officers, and agencies submit requests (needs and wants)

Staff prepares spreadsheet for Facilities Committee review

Facilities Committee reviews and makes recommendations

Facilities Committee presents proposed capital budget to Budget Subcommittee

Facilities Committee/Staff develop capital ordinance schedule (vote)

Capital budget is combined with operating budget for introduction, public hearing, approval (vote)

Facilities Committee monitors capital projects and budget throughout the year.

Ordinances introduced per the schedule for public hearing / adoption (vote)


Facilities Committee presents capital budget to Freeholder Board for approval (vote)

Process begins again for next year’s capital program

The Importance of our Capital Program

The objective of a capital program is to

give a clear picture of future capital

requirements, the cost of all projects, the

methods of financing them and the ability

of the county to pay for these projects.


• It enhances the likelihood that Morris County will

continue to obtain a AAA bond rating, which results in

lowered borrowing costs and savings to Morris County

taxpayers.

• It shows a sound, consistent program of improvement

in Morris County, which encourages the investment of

private capital.

• It expands our opportunities to participate in both

Federal and State grant programs.

A good plan is like a road map: it shows the final destination and usually the best way to get there.

H. Stanley JuddAmerican Author



• It provides an opportunity to evaluate capital projects in

light of the county’s ability to pay.

• It assists in maintaining financial stability by distributing

expenditures evenly over a period of time, thus

avoiding major fluctuations in the tax rate.

• It eliminates the need to consider otherwise routine

projects on an emergency basis.

• It avoids conflicts between projects proposed by

different agencies.



• It allows for orderly implementation of the public

improvement portion of the comprehensive plan,

without the imposition of unreasonable financial

burdens.

• It assures maximum utilization and efficient usage of

equipment and other resources through the elimination

of scheduling and resource conflicts.

• It lengthens project lead time, avoiding last minute

delays due to design, negotiation, acquisition, or other

related matters.



Elements of a Capital BudgetElements of a Capital Budget

• The capital budget contains:– The project title– Estimated total cost– Funding amounts reserved in prior years– Planned funding sources for the project

• Possibilities: operating budget, capital improvement fund, capital fund balance, grants, future year funding


Capital Budget ModificationsCapital Budget Modifications

What if priorities change during the year?

If a bond ordinance is necessary, then

• The capital budget must be amended

• Amendments must be on forms prescribed by the DLGS

• The bond ordinance must be approved by the governing body after a public hearing.


Capital Management: A Full Year ofCapital Management: A Full Year ofPlanning, Budgeting, PurchasingPlanning, Budgeting, Purchasing

Facilities Committee sets capital budget target

Department heads, Constitutional Officers, and agencies submit requests (needs and wants)

Staff prepares spreadsheet for Facilities Committee review

Facilities Committee reviews and makes recommendations

Facilities Committee presents proposed capital budget to Budget Subcommittee

Facilities Committee/Staff develop capital ordinance schedule (vote)

Capital budget is combined with operating budget for introduction, public hearing, approval (vote)

Facilities Committee monitors capital projects and budget throughout the year.

Ordinances introduced per the schedule for public hearing / adoption (vote)

Facilities Committee presents capital budget to Freeholder Board for approval (vote)

Process begins again for next year’s capital program

Morris County’s Capital Planning Process

Loudon County VA www.loudoun.gov/

Weber County UT www.co.weber.ut.us/

Washington County MN www.co.washington.mn.us/

Arlington County VA www.arlingtonva.us/

Oakland County MI www.oakgov.com/

Travis County TX www.co.travis.tx.us/

Henrico County VA www.co.henrico.va.us/

Hillsborough County FL www.hillsboroughcounty.org/

King County WA www.kingcounty.gov/

Prince William County VA www.pwcgov.org/

Frederick County MD www.frederickcountymd.gov/

Other AAA Counties (35 total)Other AAA Counties (35 total)

For more information….For more information….

Contact theMorris County

Administrator’s Office

[email protected](973) 285-6040

mailto:[email protected]

Business

Learn About the Morris County NJ Capital Budget