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North Carolina Capital Improvement Program Office of State Budget and Management 1 Capital Improvement Program OFFICE OF STATE BUDGET AND MANAGEMENT Annual.

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Presentation on theme: "North Carolina Capital Improvement Program Office of State Budget and Management 1 Capital Improvement Program OFFICE OF STATE BUDGET AND MANAGEMENT Annual."— Presentation transcript:

1 North Carolina Capital Improvement Program Office of State Budget and Management 1 Capital Improvement Program OFFICE OF STATE BUDGET AND MANAGEMENT Annual Conference October 17, 2007

2 North Carolina Capital Improvement Program Office of State Budget and Management 2 Outline Review of the 2007 Legislative Session  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

3 North Carolina Capital Improvement Program Office of State Budget and Management 3 $259.9 $31.2 $776 $590.2 $180 $1,147.7 $1,044.9

4 North Carolina Capital Improvement Program Office of State Budget and Management 4

5 North Carolina Capital Improvement Program Office of State Budget and Management 5

6 North Carolina Capital Improvement Program Office of State Budget and Management 6 Capital Improvements & Debt Affordability CIP impacted by State’s Debt Capacity  Debt ratios and retirement of existing debt  Availability of unallocated reserves  Revenue Projections Debt Related Considerations  Amount of bond/COPs proceeds required  Economic benefit of the project and revenues generated from project  Balance “Pay-as-go” and debt

7 North Carolina Capital Improvement Program Office of State Budget and Management 7 Debt Affordability Advisory Committee Recommendations Debt Service/Revenue Target of 4% Rebuild Unallocated Reserves Six-year Capital Improvement Plan

8 North Carolina Capital Improvement Program Office of State Budget and Management 8 2007 COPs Authorized 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

9 North Carolina Capital Improvement Program Office of State Budget and Management 9 Special Indebtedness - COPs 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

10 North Carolina Capital Improvement Program Office of State Budget and Management 10 Current COPs Projects 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.

11 North Carolina Capital Improvement Program Office of State Budget and Management 11 COPs Sales Initial sale July 2005 for $200 million 2 nd 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.

12 North Carolina Capital Improvement Program Office of State Budget and Management 12 COPs Funding Status 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

13 North Carolina Capital Improvement Program Office of State Budget and Management 13 Reminders for COPs 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.

14 North Carolina Capital Improvement Program Office of State Budget and Management 14 Cash Flows 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.

15 North Carolina Capital Improvement Program Office of State Budget and Management 15 2003 Repair & Renovation COPs History  In 2003-04, the Legislature authorized special indebtedness of $300 million for R&R  No R&R funds for the previous two legislative sessions

16 North Carolina Capital Improvement Program Office of State Budget and Management 16 2003 R&R COPs Issuances 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

17 North Carolina Capital Improvement Program Office of State Budget and Management 17 2003 R&R COPS - Project Status Project Status as of 10/10/07 Number of ProjectsPercent of Total Projects 100% complete11928% 75% to 100% complete17541% 50% to 75% complete4110% 25% to 50% complete246% Less than 25% complete5312% Projects not started184% Total430100%

18 North Carolina Capital Improvement Program Office of State Budget and Management 18 2003 R&R COPs - Funding Status 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

19 North Carolina Capital Improvement Program Office of State Budget and Management 19 2003 R&R COPs – State Agencies 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

20 North Carolina Capital Improvement Program Office of State Budget and Management 20 2003 R&R COPs - Universities 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

21 North Carolina Capital Improvement Program Office of State Budget and Management 21 Changes to the Executive Budget Act CIP – Budget Support Document  Space Analysis  Cash flows  Construction timelines  Maintenance/operating costs or savings for first 5 years New Reversion Provisions  1 Year for Planning; 2 Years for Construction  OSBM may grant 12 month extensions  Otherwise, project authorization lapses

22 North Carolina Capital Improvement Program Office of State Budget and Management 22 Changes to the Executive Budget Act Project Reserve Account  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  Consultation with Gov Ops no longer required  Council of State approval is still required

23 North Carolina Capital Improvement Program Office of State Budget and Management 23 Capital Planning Process Long Session Biennial Budget Even Numbered Years AugustBudget Instructions Sent to Agencies OctoberAgencies Submit Capital Requests to OSBM OctoberOSBM Develops a Capital Needs Inventory NovemberOSBM Meets with State Agencies to Discuss Capital Requests and Agency Prioritization November-DecemberOSBM Reviews Capital Project Requests and Applies Criteria to Develop a Prioritized List of Projects. December-JanuaryOSBM Develops a Six-Year Capital Improvement Plan that Includes Funding Sources and is Consistent with the Debt Affordability Study. Odd-Numbered Years FebruaryFinalize CIP with Governor and Governor's Staff February-MarchPresent the Final Capital Plan to the General Assembly with Biennial Budget February-JulyGeneral Assembly Regular Session - Consideration of Governor's Recommended Capital Budget JulyCertification of Biennial Capital Budget

24 North Carolina Capital Improvement Program Office of State Budget and Management 24 Capital Planning Process Short Session Budget Even-Numbered Years JanuaryBudget Instructions Sent to Agencies FebruaryAgencies Submit Capital Requests to OSBM February-MarchOSBM Meets with State Agencies to Discuss Capital Requests and Agency Prioritization March April OSBM Reviews Capital Project Requests and Applies Criteria to Develop a Prioritized List of Projects Finalize Short Session Capital Budget with Governor and Governor's Staff May-JuneGeneral Assembly Short Session - Consideration of Governor's Recommended Capital Budget JulyCertification of Short Session Capital Budget

25 North Carolina Capital Improvement Program Office of State Budget and Management 25 Repair & Renovations Process Every Year JulyBudget Instructions Sent to Agencies. AugustAgencies Submit R&R Requests. August-SeptemberOSBM Meets with Agencies to Discuss Requests and Prioritization. SeptemberOSBM Applies R&R Funding Allocation Model. September-OctoberOSBM in Collaboration with State Construction Recommends R&R Projects for Funding. OctoberOSBM Consults with Gov Ops on Proposed R&R Allocation for State Agencies. October-NovemberOSBM Makes R&R Funds Available to State Agencies for Approved Projects.

26 North Carolina Capital Improvement Program Office of State Budget and Management 26 Conclusions General Assembly Recognizing Need for Capital Planning and Consistent Capital Funding Increased use of Debt financing Multi-Year Funding of projects  Appropriations for Planning/Design  Debt spread over several years for Construction Within Debt Affordability Guidelines Change is the Nature of Capital Improvements

27 North Carolina Capital Improvement Program Office of State Budget and Management 27 (919) 733-0640 (fax) http://www.osbm.state.nc.us Contacts: Jim Lora Assistant State Budget Officer (919) 807- 4735 Jim.Lora@ncmail.net Adam Brueggemann Capital Budget Analyst (919) 807- 4712 Adam.Brueggemann@ncmail.net Kristen Crosson Capital Budget Analyst (919) 807- 4738 Kristen.Crosson@ncmail.net Jennifer Wimmer Capital Budget Analyst (919) 807- 4764 Jennifer.Wimmer@ncmail.net


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