Adopted Budget Book FY 23-24 Final with TOC links - Flipbook - Page 115
Budget-In-Brief → CiTy buDgeT Planning ProCess
Capital Projects Operating Budget Impact
The Capital Fund budget is used to account for financial resources related to the acquisition or
construction of major capital facilities by the City. A capital project is generally non-recurring in
nature and may include the purchase of land, site development, engineering and design fees,
construction, and equipment. Capital projects produce assets with useful lives longer than one year.
Operating costs associated with implementation of projects are a fundamental part of the capital
projects fund budget, and of the overall budget development process. Operating impacts of capital
projects are determined as a project develops and included in the annual budget. Capital projects
can have a major impact on maintenance, utilities, other contractual services, operating supplies
costs and operating itself, as well as impact on insurance and debt services. In recent years, due
to fiscal constraints, the City has focused the Capital Budget on maintaining existing infrastructure,
such as roads and building maintenance projects. Typically, these types of recurring capital projects have only maintenance impact on the operations.
An exception is the City’s Information Technology projects. These projects provide ongoing funding
for systematic replacement of City’s information and communication systems, and operating impacts
include maintenance costs and software support for the replacement purchases. These projects may
produce ongoing operational savings.
New construction or major improvements, do generally require additional operating expenditures
such as electricity, building insurance, or general maintenance. On the following page are estimated impacts of operating costs for FY 2024 capital projects, and they represent positive or negative impacts on operating costs.
The total capital projects cost for FY 2023-24 is $26,787,515
Capital Projects Operating Impact as following:
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Maintenance Cost Impact (increase): $3,282,846
Utilities Cost (increase): $7,437,942
Other Contractual Services Cost (increase): $6,126,730
Operating Supplies Cost (increase): $495,800
Insurance Cost (decrease): $(141,670)
Debt Service Cost (decrease): $(802,487)
Total Operating Impacted Cost: $11,161,161
The Total Capital Projects Operating Budget Impact is a result in between the total Capital
Projects Costs and Capital Projects Impact: $15,026,354 (see details on the next page).
The analysis of the total capital projects operating budget impact highlights the need for strategic decision-making that goes along with short-term objectives and long-term sustainability.
Thoroughly examining the financial impacts of capital projects on the operating budget underscores the importance of responsible allocation to avoid potential strains on daily operations. This
assessment empowers decision-makers to make well-informed selections that are in line with the
organization’s strategic objectives while ensuring the continuous delivery of vital services to the
community remains safeguarded.
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City of Eustis, Florida
Adopted Budget
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