Explaining the Five-Year Capital Plan

by Kathy Savolt -

Last month the Board of Trustees (BOT) approved a Five-Year Capital Plan for 2025-2029. See HERE. So, what’s the big deal?  Well, it is quite possible that it’s the first time ever the Village has a multi-year plan for capital expenditures.  It is certainly the first capital plan in 25 years.

What are Capital Expenditures?

Merriam-Webster defines capital expenditure as an amount paid out that creates a long-term benefit.  Long-term is defined as lasting more than the current year. 

Typically, the Village classifies large equipment, vehicles, and infrastructure and other improvement projects as capital expenditures.  Simply put, this is similar to what individuals do in their own lives – taking on a home mortgage or a car loan and then paying principal and interest over the term of the loan.

New York State (NYS) Finance Law allows municipalities to issue debt to fund capital expenditures that have a “period of probable usefulness” beyond the current year.  The length of the borrowing corresponds to the period of usefulness.

Capital Budget vs. Operating Budget

As The Mamaroneck Observer has previously reported (see HERE) each year the Village prepares and the BOT votes on both an operating budget and a capital budget as required by NYS law.

The Operating Budget is for basic and recurring expenses such as salaries, benefits, and supplies.  The Capital Budget, while separate from the Operating Budget, does play an integral part in each year’s annual operating budget and our tax rate.  As debt is used to fund most capital expenditures, it must be repaid.  This year, principal and interest payments are 11% of the Village’s Operating Budget.

What’s the Difference between a Five-Year Plan and the Capital Budget?

By law, the BOT must pass both annual budgets that determine the tax rate and our property taxes.  In past years, Village staff would compile a list of projects and label it a capital budget.  It seemed that whichever projects were ready to go were approved until either the year ended, or someone decided they had spent enough for that year.  All previous attempts to do better planning failed.

The 2025-2029 Five-Year Plan includes the first year’s budget and estimates for the following four years.  This allows the BOT and Village staff to project debt payments, set priorities and search for alternative funding for projects.

The Five-Year Plan is designed to be a “rolling” plan.  Each year, the old year will be dropped and a new Year 5 added.  Developing and employing a multi-year capital plan is basically standard operating procedure for municipalities and businesses.

The Capital Budget is the plan for the current year.  

What’s in the Five-Year Plan?

The total amount for the five years is $100,804,419 with $11 million in anticipated grant or other funding and $90 million funded by the Village.  The Village is committed to aggressively pursuing grant and other funding for all years.

Flood mitigation efforts comprise 49% of the total five-year spending which reflects the priority announced by the BOT.

The 2025/26 Capital Budget

The first year, now the 2025/26 Capital Budget, totals just over $3.9 million with 54% of the funds allocated to flood mitigation efforts.  The remainder of the budget is split among several departments including Engineering (sidewalks and crosswalks), Recreation (funded by Rec Fees), and Public Safety.

This $3.9 million total is funded primarily through grants and other sources (75%) and the remaining 25% will be funded by debt.

There will most surely be changes along the way but this first Five-Year Plan is a positive step.