Financial Planning for Capital Assets

Capital Asset Financial Plan 

A Capital Asset Financial Plan (CAFP) is a financial forecast of repair and replacement needs of a community’s existing infrastructure. It is intended to give communities adequate time to ensure funds are available at the time that infrastructure needs to be replaced. A CAFP is based on an inventory of facilities and identifies an approximate window within which individual facilities may need to be replaced. This window is based upon their useful and depreciated life calculations, along with the need for upsizing for growth, line failures, etc. 

 

Based upon the projected timings of repair and replacement projects, Lewis Young can create a forecast of future expenses and recommend the best methods of funding the projects. These recommendations are derived using combinations of financings, user revenues, impact fees (when applicable), and other City revenues. The CAFP is a very valuable tool as it allows the City to plan for replacement costs well in advance of the need which reduces the impact upon rate payers in the future.

Capital Facilities Finance Plan 

A Capital Facilities Finance Plan (CFFP) focuses on an optimal finance plan for funding future capital projects required to accommodate new growth while also maintaining existing facilities. Horizons for a CFFP can vary from a few years to an anticipated build-out of the land within the entity’s boundaries. The CFFP is based upon a capital facilities plan that is designed to maintain the current levels of service enjoyed by existing residents and perpetuate that level of service into the future. The CFFP takes the project recommendations and determines an optimal method of financing future capital projects using revenues from impact fees, grants, user rates, the general fund, developer exactions and dedications, Special Assessment Areas, pay-as-you-go financing, etc. Lewis Young creates CFFPs to analyze each future project and make recommendations based upon our experience in finding cost-effective methods of financing.