CIP Process Needs Revision

To the Editor:

Lacking a strategic/long-range plan explains why our current Capital Improvement Plan (CIP) procedure requires revision. There are those who would argue “if it’s not broke, don’t fix it,” and I’m inclined to agree with that axiom; however, our current procedure seems to favor those who are involved in the process of approving the CIP rather than those who will have to pay for it.

It goes without saying that in order for a CIP to be effective it should be in accordance with some form of longer-range plan. Not having such a plan makes a difficult task even more difficult. I can’t understand why our current policies and procedures are being defended so vigorously. Certainly, we would all agree that almost any policy or procedure can be improved. My concern is that our current CIP procedure eliminates significant levels of evaluation. We don’t have a formal approach to prioritizing projects, or the ability to technically evaluate a project’s benefit to the town. Oh, I’m sure this will awaken those who will say “we do.” When that happens, ask them to provide the return on investment calculations performed prior to approving a project. Ask them to quantify the cost benefit to the town. Further, we don’t have the ability to revisit previously approved projects to determine if they are still applicable in light of current technical advances and economic conditions. We have heard in the past that if we don’t continue to fund a particular project that we would be wasting all the money previously spent. What that assumes is that future monies spent will correct what a poor evaluation originally approved. The industrial term for money previously spent is called “sunk costs.” If industry approved projects based on considering sunk costs, few new projects would get approved because we would continue to through good money after bad. We need the ability to say stop, this project is not turning out to be what we planned and therefore it should be canceled. We currently do not do that.

Approving capital projects is a daunting task. It takes a lot of work and financial evaluation. Having been responsible for corporate financial planning, I can tell you that if I had presented a project for approval without having performed a complete financial review, including a return on investment analysis, an evaluation of why a particular project was presented over another or what the cost/benefit would be to the corporation, I would have been politely escorted to the door.

Unfortunately we cannot escort our elected officials to the door until the next election, but we can require that they perform the evaluations necessary in spending our money. The CIP process needs revision. Ask those who are running in this election to present how they will improve our CIP policy and procedure.

Visit our website, www.independentpartyofnewtown.com, ask us questions, give us your ideas. We want to hear from you. We can work together for a better Newtown.

Albert P. Roznicki

169 Hanover Road, Newtown                                 September 9, 2009