Legislation passed earlier this year requires townships to adopt a capital improvement plan if the cash balances in each any of its capital improvement funds exceed (1) 150% of the township’s estimated annual budget and (2) $200,000. Capital improvement funds include any township fund from which capital improvements may be paid, such as township general, fire, cumulative fire, cumulative building and parks funds.
The capital plan must include at least three future years after the year of adoption; for example, if a plan is adopted in 2019 it must include capital improvements for the years 2020 through 2022. In addition to the amount and description of the proposed expenditures, the plan must identify the source of revenue (including property tax) to be dedicated to the capital expenditures.
The Township Board is required to hold a public hearing on the proposed plan prior to adoption. After adoption, the Township must submit the plan to the State Department of Local Government Finance. The deadline to adopt a capital improvement plan is September 30, 2020. Failure to adopt a plan will result in the inability to levy property tax for capital improvement funds for the at least ensuing year.
If you have questions about capital improvement plans or need assistance with preparing a plan, please contact us.