News & Insights

A Capital Improvement Plan (CIP) is one of the most critical strategic tools available to local government. Whether for a city, village, township, or county, the CIP answers the fundamental questions of leadership: what major infrastructure costs are coming, and how will we pay for them?  

While some view a CIP as a mere “wish list,” it is actually a high-stakes strategy document that links land use planning, long-term budgeting, and financial credibility.  

The Statutory Mandate  

In Michigan, the Michigan Planning Enabling Act requires most local governments to adopt a CIP. Under Section 65, any city or village with a master plan must prepare and adopt an annual CIP. For townships, the requirement is mandatory if the community owns or operates a water or sewer system, either alone or jointly with another unit of government.  

The Act charges the planning commission with identifying public structures and improvements needed over the next six years, ensuring that roads, utilities, parks, and facilities are developed in a coordinated manner. While counties operate under different frameworks, state-level guidance from the Department of Treasury reinforces that rigorous financial planning and transparency are essential for all units of government to remain fiscally healthy and qualify for state resources.  

Budgeting with Clarity  

Regardless of specific legal mandates, no local government can responsibly manage its finances without a CIP. Roads, bridges, fleet vehicles, and technology systems are predictable costs. Without a multi-year plan, a government is “budgeting with blind spots.”  

Outside of personnel costs, capital investments are often a community’s largest and most volatile expenses. Without a CIP, budgeting becomes reactive. Maintenance is deferred until systems fail, emergency borrowing becomes necessary, and the board or council loses the ability to prioritize effectively. Systematic planning reduces the “total cost of ownership”—it is nearly always cheaper to maintain an asset through its lifecycle than to pay for emergency replacement.  

Building Public Trust  

The CIP is also a powerful communication tool. It provides the necessary context for large fund balances or utility rate increases. What might look like “excess cash” to a taxpayer is often revealed by the CIP as a committed reserve for an upcoming road project or facility upgrade. By documenting these needs in a transparent, plain-language document, local officials can demonstrate that they are stewards of public funds with a clear vision for the future.  

Strategic Leadership with Maner Costerisan 

Ultimately, the CIP is not about projects; it is about credibility. It aligns strategy with dollars, reduces surprises, and builds trust with residents and stakeholders. Governing boards and planning commissions should treat the CIP as a core leadership responsibility, review it annually, and ensure it actively drives budget decisions. An effective CIP includes project rankings to resolve competing priorities, identified funding sources, and a planning horizon that often looks 10 to 20 years into the future to capture the full lifecycle of the costliest assets.  

A community that plans its capital investments is not just managing its infrastructure; it is managing its future. However, navigating the intersection of statutory requirements and financial modeling can be complex.  

The government experts at Maner Costerisan can help your community develop a robust, compliant, and actionable CIP that strengthens your financial standing and provides a clear roadmap for the years ahead. Contact us at maner@manercpa.com for more information.