Capital Planning System Applied to Municipal Infrastructure

Abstract

Public owners are challenged by limited and constrained capital sourcesfor acquiring and sustaining infrastructure facilities. They alsogenerally lack supporting automation tools and techniques for analyzingcapital investment and project execution decisions, elucidating theimpact of these decisions in a holistic manner, and leveragingalternative delivery methods and financing means for competitiveadvantage. An automated decision support system in development atMassachusetts Institute of Technology provides an integrated planningframework for public owners and engineers to confront these issues. Thesystem, called CHOICES, models life cycle cash flows of capital projectsusing variable delivery methods and finance options and aggregates themwith forecasted operating revenues and expenses at a portfolio level.This paper describes the application of CHOICES to a municipality inMassachusetts. Capital program scenarios were developed using pace ofexecution and alternate funding sources as primary considerations.Development and analyses of the scenarios suggest that the currentmunicipal environment hinders local infrastructure management andprocurement. This is a first-order problem; its solution is likely tooutweigh the choice of project delivery for many municipal governments,and it forces municipalities to consider a wide array of alternativesfor fulfilling local requirements.