Capital Outlay 101 RM - New Mexico State Agency on Aging

Guidance for 2015 Application
Capital Outlay 101
Asset Management Training
Febuary 2014
Today’s Agenda
1. Capital Outlay Uses and Guidelines
2. Capital Outlay Request Process Overview
3. Legislative Structure and Process
4. Executive Order 2013-006 – Agency
Responsibilities & Grantee Responsibilities
5. Grant Agreement Requirements and Forms
6. 2015 Capital Outlay Request Application
7. Questions & Break
Febuary 2014
Today’s Agenda
Asset Management Introduction – The Big
Asset Inventory – Discussion
A discussion of the components of asset inventories.
Asset Inventory Workshop
The group will be given a handout to work through to get
some inventory data and to learn what is involved in the
process. We will do this in small groups and talk about the
5. Level of Service Discussion
6. A discussion of what goes into Level of Service and how it
relates to the inventory.
Febuary 2014
Capital Outlay 101
Presented by:
Rebecca Martinez
Capital Projects Bureau Chief
Barbara J. Romero
Capital Projects Coordinator
Febuary 2014
 Capital Outlay is funding intended for the acquisition,
improvement, alteration or reconstruction of assets for
long term use, including land, buildings, equipment,
furnishings, and vehicles.
 Capital Outlay funds cannot be used for operating
expenses, salaries, supplies, events, brochures, retroactive
reimbursements of previous payments, loan payments or
for a private non governmental entity.
 The funds are derived from severance tax bonds which are
essentially loans the state acquires with various revenues
pledged by the state to make the loan payments.
 Capital Outlay funds do not require a local match, however
the legislature will look more favorably on the project if the
local government provides fiscal support.
Febuary 2014
Capital Outlay
 Capital Outlay grants smaller than $5000 are not
economically feasible when you consider paperwork,
personnel time and loan requirements factored into
the cost.
 Non-construction projects are granted for 2 years and
all others are for 4 years with no extension for GOB.
 It is imperative that the funds be spent within the
times set in the grant agreement due to the critical and
urgent need for the project.
 Funds are subject to project warranties and conditions
identified in the grant agreement
Febuary 2014
N.M. Const., Article IX, Section 14:
The Anti-Donation Clause
Article 9, Section 14 of the Constitution of New Mexico. The provision
that prohibits the state from making direct grants of aid to entities or
persons, despite the need or value of the project, unless the strict
requirements of the provision are satisfied.
(ie. lease agreement, operating agreement, user agreement at fair market
value determined by the local government and state agency)
The provision provides in pertinent part, "neither the state nor any
county, school district or municipality, except as otherwise provided in
this constitution, shall directly or indirectly lend or pledge its credit or
make any donation to or in aid of any person, association or public or
private corporation"
The constitution "makes no distinction as between 'donations', whether
they be for a good cause or a questionable one. It prohibits them all.
Febuary 2014
How do we ask for
Capital Outlay funds?
 The application categories are; construction, code
compliance, renovation or other improvements, meals
equipment, other equipment and vehicles.
The projects within each category are rated and given a
ALTSD will provide a list of recommended projects for
All projects for new construction will need to be requested
through your local legislator.
The projects are compiled on one bill and introduced by
one or two sponsors. The bill then goes through the
legislative process.
Febuary 2014
A brief overview of the Legislature
 NM Legislature consists of 112 members (70 House of
Representatives and 42 Senate)
House of Representatives serve 2 year terms and the Senate serve
4 year terms.
Capital Outlay Funds are divided in thirds after reserving for
Senior Severance Tax Bonds (TIF, WTB, CIF) and rainy day fund
(1/3 House of Representatives 1/3 Senate 1/3 Executive)
Primary function is to represent the citizens who elect them and
to help solve numerous issues throughout the state.
The Legislature convenes in regular sessions in Santa Fe at noon
on the third Tuesday in January each year. In odd-numbered
years the legislature meets for 60 days and in even-numbered
years for 30 days.
The Governor reserves the right to call a special session
concerning matters contained in the proclamation.
Febuary 2014
Structure of Government
Febuary 2014
Bills and Memorials
The main tools used to pass law or actions are bills and memorials.
The Legislature considers proposals from simple 1 paragraph bills to
over 100-page bills.
There are 3 basic types of measures:
•Bills: Form used to propose laws.
(Requires Governor’s action or signature)
•Memorials: Petition or declaration of intent addressed to another
governmental body.
(Does NOT require Governor’s action to become effective)
•Resolutions: Formal declaration on a subject the legislature cannot or
doesn’t want to control with legislation.
(Does NOT require Governor’s action to become effective)
Febuary 2014
Bill passage
 Bill introduction – bill is assigned a #, read twice, printed, and referred to the
proper committee through either the House or Senate (deadline February 5, 2014)
 Committee review – bill is reviewed by 1 or more committees in the House or
Senate. The committee can approve the bill, amend it, forward it to the next
committee with no recommendations or kill the bill by tabling it
 Final vote – If the bill passes it will move to either the House or Senate and
repeats the entire process and either singed or vetoed.
 Enrolling and Engrossing – – bills that pass both House and Senate require
the Speaker of the House and President Pro Tempore of the Senate signature
then it is sent to the Governor for action.
 Governors desk - The Governor can sign the bill making it law, veto it, lineitem veto if it contains an appropriation. Bills not signed within 3 days
becomes law if the legislature is still in session (Session ends February 20, 2014) .
Once the legislature has convened the Governor has 20 days to sign the bill.
Unsigned bills are vetoed (March 12, 2014).
 Signed bills – bills signed by the Governor will become law 90 days after the
legislature adjourns (May 21, 2014). The legislature can also indicate an emergency
clause which makes the law effective immediately upon signature by the
Governor or another specified date. (usually July 1)
Febuary 2014
Severance Tax Bond
 Funds are derived from royalties paid by companies
that severe a natural resource from the earth such as
oil, gas. timber, mineral products like copper, gypsum,
 Use of the funds are subject to the State Board of
Finance Bond Project Disbursement Rule NMSA
Febuary 2014
General Obligation Bonds
 2015 is a General Obligation (GO) bond year.
 The GO allows the state to borrow money to finance capital
improvement projects. Voted on by the electorate. The
principal and interest on the bonds are paid out of property
 This requires a bond issue to be included on the general
election ballot.
 (If passed) Funds will be available after the bonds are sold
either in Spring or Winter following the election.
 Use of the funds are subject to the State Board of Finance
Bond Project Disbursement Rule NMSA
Febuary 2014
What does Capital Outlay pay for?
 For new construction of a public facility
 Improvements to a fixed asset
 Land acquisition
 Improvements to roads
 Information technology
 Rolling stock (vehicles, fire and emergency, service
vehicles and heavy equipment)
 Code compliance
 ADA compliance improvements
Febuary 2014
How do we get the $$
 The Department will issue a grant agreement once it
has determined that the fiscal agent is in compliance
with the Executive Order 2013-006
 The grant agreement will identify the citation of the
law, the appropriation amount, legislative intent,
expiration date, and the terms and conditions of the
use of funds.
 Fiscal Agent will need to submit a scope of work for
each project identifying timeframes and milestones.
 Capital Outlay funds are on a reimbursement basis.
(You must expend the funds first and then submit a request to ALTSD including invoices, cancelled
checks and copies of contracts on the approved request form.)
Febuary 2014
Executive Order 2013-006
On May 2, 2013, Governor Susana Martinez signed the EO
establishing uniform funding criteria and grant management and
oversight requirements for grants of State capital outlay
appropriations by State agencies to other entities
 Ensure that grantee has sound fiscal practices.
 Ensure grantee submits audits, budgets and financial reports
timely - if applicable
Agency review of audit to determine deficiencies that would
limit the ability to administer the grant
Unconstitutional outcomes – Anti donation violation issues
Protect public funds
Projects are certified as eligible prior to bond sale
Uniform grant management practices are met
Febuary 2014
Executive Order 2013-006
Agency Responsibilities
 Complete a funding questionnaire for each grantee
 Determine if the grantee has the resources to implement the
grant agreement if not then a suitable fiscal agent
Review audit for deficiencies identified in the opinion letter,
financial statements, management discussion and analysis, and
supplemental information, internal control, schedule of findings
and questioned costs, summary of prior year findings and
implement special conditions as part of the grant agreement
Monitor grantees compliance with uniform funding criteria and
mitigate non-compliance
Receive approval of deviations from any of the policies and
procedures from DFA Cabinet Secretary prior to implementation
Monitor the private use of state capital assets
Revise and utilize new grant agreement template
Febuary 2014
Executive Order 2013-006
Grantee Responsibilities
 Provide a comprehensive scope of work, including the
timeline and names with contact information for
Grantee staff responsible for the project
Compliance with the Executive Order 2013-006
Compliance with Infrastructure Capital Improvement
Plan (ICIP)
Review and compliance with the grant agreement
Reporting requirements
Expenditure requirements
Febuary 2014
Capital Outlay Process
(Once Approved by the Legislature and the Executive)
The selected projects and funded
requests are forwarded to Governor
for approval and signature.
Upon receipt of the GA, the ALTSD
Cabinet Secretary signs off on the
contract and forwards a copy of the
GA to the local government giving
notice to proceed with the project
and begin expenditures against the
ALTSD Capital Outlay Bureau
provides project monitoring with
periodic site visits to assure
progress and compliance with the
legislative intent.
Notice of funded projects are
forwarded to ALTSD (or other
designated agency).
For projects being funded by the sale of
Severance Tax Bonds (STB) or General
Obligation Bonds (GOB) project certification
for readiness questionnaires are required.
NOTE: GO Bonds must be put on the
November ballot for the electorate to vote on.
GA is then sent back to ALTSD for
continued processing. Budgets are
established with DFA; creation of
purchase documents.
Once the Bonds have been sold, ALTSD
will “draft” the Grant Agreement which is
forwarded to the local or tribal government
for review and signature.
ALTSD Capital Outlay Bureau
provides project monitoring to assure
compliance with the legislative intent.
Providers/local/tribal governments submit
monthly status reports, update the CPMS
quarterly as required and submit certified
draw requests with source documents to
expend funds in a timely manner.
Project completion, final inspection,
and project close out.
Febuary 2014
Grant Agreement Articles
article describes the intent of the law, the appropriation amount and the expiration
DISBURSEMENT TO GRANTEE – This article discusses the ability to make payment and
the requirement to submit a Notice of Obligation. Discusses third party obligations
REPRESENTATIVES – Contact information for grantee and department.
 Article IV – REVERSION DATE, TERM, EARLY TERMINATION – This article identifies the
reversion and the requirement to expend funds on or before that date regardless of a
third party contract
 Article V – EARLY TERMINATION – This article discusses that the department can
terminate the agreement once the project is completed, funds were expended in
full, violation of terms, mishandling of public funds
 Article VI – SUSPENSION OF NEW OR FURTHER OBLIGATIONS - This article discusses the
departments ability to direct the grantee to cease entering into an obligation.
Febuary 2014
Grant Agreement Articles
 Article VII – AMENDMENT – both parties must execute any changes to the grant agreement
if deemed appropriate by agency.
 Article VIII – REPORTS – discusses the paper reporting, paperless reporting (CPMS) and the
final report and requests for additional information and retention period.
 Article IX – REQUEST FOR PAYMENT PROCEDURES AND DEADLINES – process for requesting
reimbursement, supporting documentation and deadlines.
– funds must be spent in accordance with state laws, implemented in accordance with NM
Public Works Act, must not be in violation of the “Anti-Donation Clause”, project cannot be
converted to another use, EEO, Grantee has the ability to receive and expend funds,
authorized signatory, agreement does not conflict with grantees obligations, grantee has
reviewed and agrees with project description, amount and expiration date and is consistent
with the appropriating law, grantee shall abide with all state laws including; conflict of
interest, governmental conduct, whistleblower act, language to be included in all contracts
and subcontracts regarding lobbying.
– Maintain files for 6 years after the project has been completed
 Article XII - IMPROPERLY REIMBURSED FUNDS – department has the ability to request funds
paid to the grantee under fraud, mismanagement, misrepresentation, misuse, or violation of
Febuary 2014
Grant Agreement Articles
 Article XIII – LIABILITY – NM Tort Claims Act (other party’s acts or omissions)
 Article XIV – SCOPE OF AGREEMENT – What is written in the agreement shall
be what governs the use regardless of any other conversations between
grantee and department
AGREEMENT – contingent upon the legislature to authorize and appropriate
WHOLE OR PART BY FUNDS MADE AVAILABLE UNDER THIS AGREEMENT termination clause in all contracts in case department cancels the grant you
have the ability to cancel the contract and pay out the liability for goods and or
services received to that point.
CLAUSES - subject to the State Board of Finance rules and regulations including the
Bond Project Disbursement Rule
Febuary 2014
 Notice of Obligation –
 Request for Payment –
 Scope of Work
Febuary 2014
2015 Capital Outlay Application
 Application
 Guidance
 CO Forms
Febuary 2014
Feb. 3
Feb. 5-27
Apr. 11
2015 Timeline
2015 Capital Outlay Application available on-line at
State-wide Capital Outlay Application Process and Asset
Management Planning
Deadline to submit 2015 Capital Outlay Application to ALTSD
and AAA.
May 16
Project Review Teams (AAA’s) conduct initial capital request
reviews, rate and rank proposed projects, and submit
recommendations to ALTSD for the fundable projects list.
June 16
ALTSD finalize recommendations and prepares the request to
be submitted to DFA.
June 20
ALTSD presents request to the Program Advisory Council.
June 30
ALTSD submits final request to DFA for inclusion in State
Agency Infrastructure Capital Improvement Plan.
Febuary 2014
Aging & Long-Term Services Department
Capital Projects Bureau
P.O. Box 27118
Santa Fe, NM 87502-7118
Rebecca Martinez
Barbara Romero
Mary Chavez
Bureau Chief
Administrative Assistant
505-231-2451 cell
[email protected]
[email protected]
[email protected]
Febuary 2014

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