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Sample Paper on Capital Budgeting

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Sample Paper on Capital Budgeting
Priority 1: Police Holding Cells Retrofit

The weighted ranking of the project above is of significance to Highpoint City. The conditions in this cell are not conducive enough to hold detainees due to dilapidated facilities. It has gotten to a point where detainees have an opportunity to hang themselves from exposed plumbing pipes. This project is of utmost priority because an inspection by State Board Corrections revealed that it was in violation of safety standards. The city needs to hasten this renovation so as to comply with state guidelines.

Priority 2: Downtown Re-roofing Projects

The projected criticality of this project is of significance since it deals with a critical issue of risk management. It is embarrassing for a city to have buildings in its environs that have leaking roofs but house critical city infrastructure. Rainfall has been reported to be above normal, and the condition is projected to worsen. The city has already lost computers valued at $ 137,000 and could lose more if nothing is done about it. It is high time the city stopped postponing this project and embarked on repairing these roofs.

Priority 3: Patching and Slurry Sealing 75 miles of City Streets

I rank this third in schedule because it is necessary for a city to have proper roads that can facilitate transport and contribute positively to the image of the city. Investors often invest more in cities withgood road networks as it is easier to do business in such locations. Repairing roads is an inevitable venture, and as the public works director states, it is cheaper to fix now rather than later.

Priority 4: City Hall Heating and Air Conditioning Replacement

This has been overdue for five years, and it is high time it was given priority. The 23-year old air conditioning system needs to be replaced since the current one can break down at any time. Replacing the old system will be cost efficient in the long run, and an electrical provider is offering to underwrite 25% if the new system comprises of solar power components. 

Priority 5: Repaint and Re-carpet General Services Building

As much as this is tainting the image of the City in a very negative way, it should only be considered after the four above have been addressed. This is because the status of the general services building is not hindering any service delivery. Though the State Occupational Safety and health Administration has issued reports that embarrass the city, they have not shown any alarming scenario that violates safety laws. The city should focus on more pressing matters before considering this project.

Priority 6: City Hall Refurbishing

This should be given a weighted ranking of one because the city has more pressing issues to deal with. The new mayor insists on it because of thesymbolism of a new lordship that is devoted to better customer service. Better customer service means better services to citizens and refurbishing of the office does not accord better services to residents.



Part II: New Capital Assets
Priority 1: Landfill Closure

Highpoint City has to conformto State Regulations. Since it stopped utilizing the two landfills, leaving them unmonitored places the lives of residents at risk since they could get harmed in these locations. To mitigate risk, the project should be accorded the highest priority. In fact, the city is already out of compliance and has only 180 days to adhere to monitoring and closure requirement. If it fails to do that, then they risk a penalty of $10,000 on a daily basis.

Priority 2: Waste Water Treatment Plan and Sewer Extension for new Industrial Park

This is a project that resonates well with the city’s objective of economic development. Opening a new industrial park has many benefits. The project will add and diversify thetax base of the community while stimulating other economic activities. The revenues that are expected from this project will lead to the payoff of sewer extension and wastewater treatment plant. This is a project that is versatile and essential tocommercial growth.

Priority 3: City Fuel Farm

This project is given a third priority because it is targeted towards saving fuel costs for the company and not necessarily for development purposes. This project is necessary because an investment on it would offset construction costs in three years and reduce ongoing costs on fuel by 21% during the fourth year onwards. This ultimately saves the cost that Highpoint City utilizes on fuel thereby having more funds to invest in the development of the city.

Priority 4: Greenly Park

There has been much bidding for the repairs on Greenly Park to take place. Such maintenances are essential for the interests of the locals. Restoration mechanisms and reopening of the park for the public should be given a priority after the above projects so as to return it to his former glory where it was the most visited park on the southern border.

Priority 5: Greenly Park Branch Library

Much bidding has been done for this library, and it would be significant to build it even though funding for the books needed is unavailable for the next three years. Having a structure in place that awaits the delivery of books is beneficial to Greenly Park. Furthermore, if the repairs on Greenly Park are carried out in conjunction with the building of the library, then a 4-7% reduction incost might be effected which is advantages to the city.

Priority 6:Regional Youth Soccer Complex

This project should be given the last priority due to its cost. City staff have done research that shows that there will be increased maintenance costs, and matching funds will be difficult to find. The city cannot afford this, and it will neither add to the property tax base nor generate substantial sales tax revenue.






Part III: Reflective Questions
  1. The primary motivating factor is the value that these projects have towards the residents of Highpoint City. Projects that improve the economic conditions and welfare of the residents are given a higher priority as compared to other projects that only benefit a few members of the society. However, ofprominence is adherence to laws and risk mitigation. Any project that deals with adhering to any safety law and regulation is given the priority so as to avoid noncompliance or any penalties that might arise. Projects intended to serve individual needs and goals are given the last priority.


  1. The class of projects I found easier to place in priority rank is new capital assets. This is because my focus was on how they would generate revenue for the City while reducing the costs of administration and maintenance. Of most concern is adherence to state laws but after that I prioritized on developmental projects that added revenue to the city.


  1. Two stakeholder groups that might have a different priorities are elected officials and community groups. Elected officials might prioritize the refurbishing of city offices as compared to other projects. Community groups might insist that the complex must be built. This should be checked on since individual groups often focus on their needs without focusing on those that benefit the whole society.



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