The Capital Improvements Program in New Hampshire

League of Women Voters^®
of the Upper Valley

The Capital Improvements Program in New Hampshire

Question and answers about CIP programs in NH

What is a CIP. Authorization. Purpose. Preparation. Adoption. Relationship. Reference.

What is a Capital Improvement Program (CIP)?

The capital improvement program, known by the acronym CIP, links local infrastructure investments with master plan goals, land use ordinances, and economic development. A capital improvement program bridges the gap between planning and spending, between the visions of the master plan and the fiscal realities of improving and expanding community facilities.
A CIP is an outline of anticipated expenditures for capital projects projected over a period of at least 6 years.
Capital projects are those that relate to infrastructure and purchase of land and, in some cases, engineering studies. Capital projects do NOT include regular maintenance and operations.

Authorization

RSA 674:5 empowers the local legislative body to authorize the planning board to prepare and amend capital improvement programs + only in communities that have adopted a master plan. As an alternative, the legislative body may authorize the governing body to appoint a capital improvement program committee to prepare a CIP. This committee must have at least one member of the planning board and may include but is not limited to other members of the planning board, the budget committee, or the town or city governing body.

Purpose of a Capital Improvement Plan

The main purpose of the CIP is to aid the mayor or selectmen and the budget committee in their consideration of the annual budget.
The CIP must classify projects according to the urgency and need for realization, and must recommend a time sequence for implementation. The CIP may also contain the estimated cost of each project, as well as the sources of revenue. The program must be based on information submitted by the departments and agencies of the municipality and must take into account public facility needs indicated by the prospective development shown in the master plan of the municipality or as permitted by other municipal land use controls.
Among the many incentives to a capital improvement programming effort are the following benefits to the community:

Preserving public health, safety and welfare
Anticipating the demands of growth
Improving communication and coordination
Avoiding undue tax increases
Developing a fair distribution of capital costs
Building a foundation for growth management and impact fees
Identifying "scattered and premature" development
Supporting economic development

Preparation of the CIP

While preparing the capital improvement program, the planning board or committee must consult with the mayor or the board of selectmen and other local agencies or boards including the school board, and must review the recommendations of the master plan in relation to the proposed capital improvements.
Also, whenever the planning board or capital improvement program committee is authorized to prepare a CIP, all municipal departments and every affected school district MUST, upon request of the board, provide a statement of all capital projects it proposes to undertake during the term of the program. The planning board or committee must then study each proposed capital project, and advise and make recommendations to the department, authority, agency, or school district board, department or agency, concerning the relation of its project to the capital improvement program being prepared.

Adoption

New Hampshire RSAs 674:5 through 674:8 describe the preparation and effect of the CIP, but contain no specific guidelines for the adoption of a capital improvement program or capital budget. It is recommended that the program be adopted by the planning board under the same process it would use for the master plan. Generally, this procedure requires at least one public hearing, after which the planning board may adopt the master plan, unless there are substantive changes made as a result of the comments received at the public hearing. A certified copy of the plan is then filed with the city or town clerk, and a copy field with the Office of Energy and Planning. While adoption procedures are absent from the statute, New Hampshire RSA 675:9 specifically requires that a copy of any "capital improvement plan" which is adopted must be filed with the Office of Energy and Planning.
8 steps for the completion of a CIP
1. Organize for the CIP process
2. Define capital projects
3. Perform a fiscal analysis
4. Review the master plan
5. Communicate with departments
6. Review proposed capital projects
7. Prepare a 6-year project schedule

Relationship of Adoption to Other Land Use Regulations

While the statutes do not specify an adoption procedure for a CIP, the laws governing implementation of certain land use regulatory procedures do require CIP adoption. An adopted CIP may also have a functional role in the review of subdivisions and their impacts on community services and costs.
Impact Fees. "In order for a municipality to adopt an impact fee ordinance, it must have enacted a capital improvement program pursuant to RSA 674:5-7." (RSA 674:21, V(b); emphasis added in bold face). This section refers to impact fees adopted as an innovative land use control within the zoning ordinance.
Growth Management: Timing of Development. "Any ordinance imposing such a control may by adopted only after preparation and adoption by the planning board of a master plan and a capital improvement program and shall be based upon a growth management process intended to assess and balance community development needs and consider regional development needs." (RSA 674:22). These requirements underscore the need to review the master plan for projects to be included in the capital improvement program. For the CIP to support a growth management ordinance, it should demonstrate that the capital improvements in the CIP have allowed for expansion of facilities to accommodate a reasonable share of the growth of the region.
Growth Management: Interim Regulation. "In unusual circumstances requiring prompt attention and for the purpose of developing or altering a growth management process under RSA 674:22, or a master plan or capital improvement program, a city, town or county...may adopt an ordinance imposing interim regulations upon development as provided in this section." (RSA 674:23). It is clear that in unusual circumstances, presumably those in which a large scale development or rapid pace of development could threaten to overwhelm community services, a community may invoke interim regulations for growth management to allow it time to prepare and adopt an appropriate capital improvement program.

Reference

The Planning Board in NH: Handbook for Local Officials, OPE, 2007, pp II-6 to II-8

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