Transcript North Carolina Capital Improvement Program

North Carolina Capital Improvement Program
Office of State Budget and Management
Capital Improvement Program
OFFICE OF STATE BUDGET AND MANAGEMENT
Annual Conference
October 17, 2007
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North Carolina Capital Improvement Program
Office of State Budget and Management
Outline
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Review of the 2007 Legislative Session
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Funding History
2007-08 Capital Budget
Special Indebtedness & Debt Affordability
Special Indebtedness (COPs) 2004-07
2003 Repair & Renovation Cops
Changes to the Executive Budget Act
Capital Improvement Plan and the 2008-09
Budget Process
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North Carolina Capital Improvement Program
Office of State Budget and Management
History of Authorized Capital Funds
Total Capital Funds (millions)
$1,400
$1,147.7
$1,200
$1,044.9
$1,000
$776
$800
$590.2
$600
Special
Financing
$400
R&R Reserve
Account
$259.9
$180
$200
Appropriations
$31.2
$0
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
Fiscal Year
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North Carolina Capital Improvement Program
Office of State Budget and Management
History of R&R Funding
R&R Funding (millions)
$350
$315
$300
$222
$250
$200
$150
$100
$125
$135 $145
$90 $100
$145
$77
$50
$8.6
$0
$0
97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08
Fiscal Year
R&R Reserve Account
Special Financing (COPS)
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North Carolina Capital Improvement Program
Office of State Budget and Management
2007-08 Capital Budget
Appropriations
Debt Financing
Approved Budget
Unfunded
Previously Funded
Receipts/ Gifts
subtotal
UNC Self-liquidating
subtotal
Repairs & Renovations
Total
State Agencies
97,592,100
188,007,800
285,599,900
211,594,362
6,724,233
62,022,998
565,941,493
565,941,493
78,300,000
644,241,493
UNC System
133,149,000
481,140,225
614,289,225
649,835,000
55,104,225
40,100,000
1,359,328,450
334,681,000
1,694,009,450
66,700,000
1,760,709,450
Totals
230,741,100
669,148,025
899,889,125
861,429,362
61,828,458
102,122,998
1,925,269,943
334,681,000
2,259,950,943
145,000,000
2,404,950,943
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North Carolina Capital Improvement Program
Office of State Budget and Management
Capital Improvements & Debt
Affordability
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CIP impacted by State’s Debt Capacity
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Debt ratios and retirement of existing debt
Availability of unallocated reserves
Revenue Projections
Debt Related Considerations
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Amount of bond/COPs proceeds required
Economic benefit of the project and revenues
generated from project
Balance “Pay-as-go” and debt
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North Carolina Capital Improvement Program
Office of State Budget and Management
Debt Affordability Advisory Committee
Recommendations
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Debt Service/Revenue Target of 4%
Net Tax-Supported Debt Capacity Using 4.0% Target Ratio
(Millions of dollars)
Fiscal Year
Total Additional Debt Capacity
per Year
Debt Capacity Available each
and Every Year
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2007
2008
2009
2010
2011
1,032.1
149.1
50.4
56.3
520.2
384.0
384.0
384.0
384.0
384.0
Rebuild Unallocated Reserves
Six-year Capital Improvement Plan
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North Carolina Capital Improvement Program
Office of State Budget and Management
2007 COPs Authorized
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Total - $669,148,025
Maximum prior to 7/1/08 - $284,360,750
Additional 2008-09 - $245,030,900
Additional 2009-10 - $139,756,375
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North Carolina Capital Improvement Program
Office of State Budget and Management
Special Indebtedness - COPs
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Legislature authorizes debt
DOA, OSBM, and State Treasurer review and
must concur to bring to:
Council of State for Approval
COPS debt sales are scheduled to meet cash
flow requirements of the projects and
Stay within Debt Affordability limits
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North Carolina Capital Improvement Program
Office of State Budget and Management
Current COPs Projects
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2005- 14 projects including land purchases, total
authorization $706 million includ. Prison and
Psychiatric Hospital
2006- 11 total projects; 10 that may begin to
requisition funds, including land purchases, total
authorization $719,168,700
2007-17 projects including 1 project for land and
1 supplement to a prior project. Not yet
authorized by Council of State as of 10/17/07.
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North Carolina Capital Improvement Program
Office of State Budget and Management
COPs Sales
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Initial sale July 2005 for $200 million
2nd sale Oct 2006 for $201 million
Recent sale Oct 2007 for $200 million
Next sale planned for Spring 2008
Debt sales are timed based on the cash flow
needs provided by the agencies and universities
to OSBM.
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North Carolina Capital Improvement Program
Office of State Budget and Management
COPs Funding Status
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To date $385,606,779 has been expended on
2005 and 2006 projects
2005-$346,870,936
2006- $38,735,843
The first two projects scheduled to be completed
are Prison #6 and the Central Regional
Psychiatric Hospital in Butner, which fall under
the 2005 projects
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North Carolina Capital Improvement Program
Office of State Budget and Management
Reminders for COPs
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Private Use- The private use of facilities funded by special
indebtedness is greatly restricted as long as the debt is outstanding.
Any private use needs OSBM’s approval to verify the percentage
used and to make sure the tax-exempt status of the debt is
maintained.
Copies of all invoices must be kept for six years after the debt is
repaid. If the debt is repaid in 20 years, invoices must be kept for 26
years.
It is the State’s policy that proceeds from special indebtedness
cannot be used to compensate or support the salaries of in-house
facilities staff or other state employees for services related to
completing the projects.
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North Carolina Capital Improvement Program
Office of State Budget and Management
Cash Flows
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Projected cash needs are essential in timing
debt sales, so any updated information on the
project and the progress of it is always
appreciated.
Updated cash needs will be requested at the
beginning of each quarter and should show the
cash need per month through the end of the
project.
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North Carolina Capital Improvement Program
Office of State Budget and Management
2003 Repair & Renovation COPs
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History
 In 2003-04, the Legislature authorized special
indebtedness of $300 million for R&R
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No R&R funds for the previous two legislative
sessions
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North Carolina Capital Improvement Program
Office of State Budget and Management
2003 R&R COPs Issuances
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COPS Funds Issued
 April 2004 - $125,000,000
 August 2006 - $100,000,000
 September 2007 – Final sale of $75,000,000
authorized by Council of State
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North Carolina Capital Improvement Program
Office of State Budget and Management
2003 R&R COPS - Project Status
Project Status as of
10/10/07
Number of Projects
Percent of Total
Projects
100% complete
119
28%
75% to 100% complete
175
41%
50% to 75% complete
41
10%
25% to 50% complete
24
6%
Less than 25% complete
53
12%
Projects not started
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4%
Total
430
100%
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North Carolina Capital Improvement Program
Office of State Budget and Management
2003 R&R COPs - Funding Status
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Funding Status as of 10/10/07
 $302,024,739 total budget of COPS
 $234.2 million allotted to agencies/campuses
 $216.5 million expended
 $6.9 million average 2007 monthly expenditures
 $3.9 million average monthly expenditures by state
agencies
 $3 million average monthly expenditures by UNC
system entities
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North Carolina Capital Improvement Program
Office of State Budget and Management
2003 R&R COPs – State Agencies
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State Agency Detail as of 10/10/07.
 Expenditures of $99,047,934
 Allocations of $143,407,475
 Allotments of $107,781,159
 Projects are 69% complete
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North Carolina Capital Improvement Program
Office of State Budget and Management
2003 R&R COPs - Universities
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University System Entities Detail as of 10/10/07.
 Expenditures of $117,467,895
 Allocations of $158,657,204
 Allotments of $126,493,007
 Projects are 74% complete
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North Carolina Capital Improvement Program
Office of State Budget and Management
Changes to the Executive Budget Act
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CIP – Budget Support Document
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Space Analysis
Cash flows
Construction timelines
Maintenance/operating costs or savings for first 5 years
New Reversion Provisions
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1 Year for Planning; 2 Years for Construction
OSBM may grant 12 month extensions
Otherwise, project authorization lapses
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North Carolina Capital Improvement Program
Office of State Budget and Management
Changes to the Executive Budget Act
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Project Reserve Account
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New Capital Project Fund – Excess Capital Appropriations
Budget Director can use for emergency R&R or for cost overruns
Report actions to Gov Ops
C&E Requests
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Consultation with Gov Ops no longer required
Council of State approval is still required
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North Carolina Capital Improvement Program
Office of State Budget and Management
Capital Planning Process
Long Session Biennial Budget
Even Numbered Years
August
Budget Instructions Sent to Agencies
October
Agencies Submit Capital Requests to OSBM
October
OSBM Develops a Capital Needs Inventory
November
OSBM Meets with State Agencies to Discuss Capital Requests and
Agency Prioritization
November-December
OSBM Reviews Capital Project Requests and Applies Criteria to
Develop a Prioritized List of Projects.
December-January
OSBM Develops a Six-Year Capital Improvement Plan that Includes
Funding Sources and is Consistent with the Debt Affordability Study.
Odd-Numbered Years
February
Finalize CIP with Governor and Governor's Staff
February-March
Present the Final Capital Plan to the General Assembly with Biennial
Budget
February-July
General Assembly Regular Session - Consideration of Governor's
Recommended Capital Budget
July
Certification of Biennial Capital Budget
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North Carolina Capital Improvement Program
Office of State Budget and Management
Capital Planning Process
Short Session Budget
Even-Numbered Years
January
Budget Instructions Sent to Agencies
February
Agencies Submit Capital Requests to OSBM
February-March
OSBM Meets with State Agencies to Discuss Capital Requests
and Agency Prioritization
March
OSBM Reviews Capital Project Requests and Applies Criteria to
Develop a Prioritized List of Projects
April
Finalize Short Session Capital Budget with Governor and
Governor's Staff
May-June
General Assembly Short Session - Consideration of Governor's
Recommended Capital Budget
July
Certification of Short Session Capital Budget
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North Carolina Capital Improvement Program
Office of State Budget and Management
Repair & Renovations Process
Every Year
July
Budget Instructions Sent to Agencies.
August
Agencies Submit R&R Requests.
August-September
OSBM Meets with Agencies to Discuss Requests and Prioritization.
September
OSBM Applies R&R Funding Allocation Model.
September-October
OSBM in Collaboration with State Construction Recommends R&R Projects
for Funding.
October
OSBM Consults with Gov Ops on Proposed R&R Allocation for State
Agencies.
October-November
OSBM Makes R&R Funds Available to State Agencies for Approved
Projects.
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North Carolina Capital Improvement Program
Office of State Budget and Management
Conclusions
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General Assembly Recognizing Need for Capital
Planning and Consistent Capital Funding
Increased use of Debt financing
Multi-Year Funding of projects
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Appropriations for Planning/Design
Debt spread over several years for Construction
Within Debt Affordability Guidelines
Change is the Nature of Capital Improvements
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North Carolina Capital Improvement Program
Office of State Budget and Management
Contacts:
Jim Lora
Assistant State Budget Officer
(919) 807- 4735
[email protected]
Adam Brueggemann
Capital Budget Analyst
(919) 807- 4712
[email protected]
Kristen Crosson
Capital Budget Analyst
(919) 807- 4738
[email protected]
Jennifer Wimmer
Capital Budget Analyst
(919) 807- 4764
[email protected]
(919) 733-0640 (fax)
http://www.osbm.state.nc.us
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