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Capital Projects Funding and Fees

Cash Management

The primary objective of the CPDC Capital Projects Cash Management website (CSU staff only; login required) is to provide one location for all capital project approvals (BOT or Delegated), and allocations for the academic capital program. 

The site includes Allocation (AO) and Cash Posting (CPO) orders and supporting attachments, including the cash transfer letters (CSU staff only; login required) project cashflow form, and relevant systemwide memoranda and Board of Trustees capital outlay resolutions. These can be found on the site under "Resources" (CSU staff only; login required). 

Information on spend-down requirements for tax-exempt bonds, expiring and reversion dates for state appropriations, and record-retention guidelines is included as well.


Project Types:

Academic Projects: Includes both academic and instructional support campus structures, including administration, library and student administration buildings; classrooms; and infrastructure improvements.

Self-Support Projects: Includes all auxiliary enterprise programs, such as parking, housing, extended education, student union, health facilities projects. This also includes auxiliary organization, public-private partnerships, and donor- and grant-funded projects.

The quarterly CPDC Cash Flow Form is required to secure short- and long-term financing and should be submitted to CPDC planners and the department of Financing & Treasury at the CSU Chancellor's Office.


Funding Types and Spending Hierarchy for Multi-Funded Projects:

In order to meet the reporting requirements outlined in chapter 15, campuses should spend based on availability of money and utilize a spending hierarchy to meet spending benchmarks. Below is an illustration of a recommended spending priority.

Financed funding: Includes  - http://calstate.edu/FT:


Commercial Paper (CP) – Short-Term Financing

​The CSU implemented a tax-exempt commercial paper program as bridge funding until SRB are sold.  The CP program is focused on providing a cost-effective financing vehicle to complement the existing long term financing program.

​Tax-Exempt: These funds should be spent first to meet the IRS spending requirements.


​Taxable: While taxable bonds do not have IRS spenddown requirements, there is a cost of borrowing. Campuses are advised to spend taxable bond proceeds in a timely manner.


CSU Systemwide Revenue Bonds (SRB) – Long-Term Financing

Systemwide Revenue Bonds (SRB) issued by the Board of Trustees is the primary source of financing for academic facilities renewal and capital improvement projects. Operating funds are set aside and approved by the Board of Trustees to pay for the debt service on SRB long-term financing which may be augmented by commercial paper (CP) short-term financing.


Tax-Exempt: These funds should be spent first to meet the IRS spending requirements. Refer to the AO for requirements.

 

​Taxable: While taxable bonds do not have IRS spenddown requirements, there is a cost of borrowing. Campuses are advised to spend taxable bond proceeds in a timely manner.

 

State General Obligation Bonds

The cash for capital projects funded from general obligation bonds is disbursed from the proceeds of bond sales. Not currently active 

 

Public Works Board (lease revenue bond) -  State Sponsored Long Term Debt - Not currently active


Resources:

Form/Template:​

Non-financed funding includes:

General Fund Deferred Maintenance: As part of the governor's budget, the state has appropriated general funds to the CSU for deferred maintenance projects pre-approved by the California Department of Finance. Appropriated funds from the Budget Act: Campuses need to evaluate if a project has General Fund appropriation(s) with earlier available to or reversion dates than bond funds. If so, the timing in the spending of these funds needs to be coordinated with the timing in the spending of the bond funds.

Cash/Short Term Investments: Use of short term investments should be used AFTER all debt proceeds are expended; 2) use to fund preliminary plans and working drawings  2.) used to float capital projects costs until the SCO claim is received, and 3) as required by EO 994, to set aside reserves to fund future project costs for university facilities and infrastructure improvements. The reserve can also fund cost overruns or contractor claims.

Systemwide Reserves (PayGo) - (CSU)

Campus Reserves (Campus - M & Campus -I)

​​​Revenue: Current year student tuition fee revenue

​Reserves: An accumulated net carryforward of revenue less expenses, or net income (equity)

​​Interest earnings: Earnings on tuition fees


​​Supplemental Funding: Additional money earning a higher rate of return than SWFIT and SMIF. Usually held with the Auxiliary Organization (aka Foundation) such as donor funds.


CPDC Administrative Fee

​​As outlined in Fiscal Resources for Campus Development 9034.01, Campus facilities may recover their direct and indirect costs such as testing, inspection, printing, project management fees, and administrative costs from the Campus Contract Management Service budget. The Campus Contract Management Service budget of seven (7) percent of the total construction budget is developed in CPDC Form 2-7 (Capital Outlay Estimate).This can be found under Campus Contract Management Service line which includes the CPDC Administrative Fee. The fee falls under the Construction phase.

​The fee is to be allocated:​

  • ​​Academic projects1: 5.5% for campus and 1.5% for CPDC​
  • Auxiliary Enterprise & Organization2: 6.5% for campus and 0.5%3 for CPDC​

In addition, the Builders Risk Insurance Program (BRIP), and seismic insurance premiums are assessed once the project is enrolled in the insurance program, typically at the time of awarding construction. 

Notes:

1-Academic projects include university facilities for instruction, instructional support, academic support, plant operations, etc.

2-Auxiliary Enterprise & Organization includes facilities to support foundation, research, grants, donor, parking, housing, student union and extended education.

​3- Exceptions occur when state funding supports projects such as childcare and affordable housing were the Chancellor's Office advocates, facilitates, and obtains state funding on behalf of these programs.


Reference:​

Form/Template:​