AACOG Block 3 Practice Exam

A Capital Improvement Program is a multi-year plan for capital projects that informs annual appropriation and debt planning. It lays out planned infrastructure and other large-scale investments, with project descriptions, estimated costs, expected benefits, timing, and funding sources. Because these projects are costly and span several years, the CIP helps prioritize needs, map out cash flow, and decide how to finance them—whether through current revenues, grants, or borrowed funds.

The annual budget uses the CIP as a guide for near-term investments, allocating funds in the capital portion, planning debt service, and ensuring operating budgets are aligned with any ongoing maintenance or staffing needs that arise from new projects. In short, the CIP provides the forward-looking project and financing plan that shapes the yearly budget, rather than replacing it.