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F I S C A L I M P A C T R E P O R T

SPONSOR Griego

DATE TYPED 3/11/05

HB

SHORT TITLE Government Infrastructure Renovation Plans

SM 37

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Department of Health (DOH)

Commissioner of Public Lands (CPL)

Public Education Department (PED)

SUMMARY

Synopsis of Bill

Senate Memorial 37 would ask the DFA to develop a plan and establish mechanisms for gov-

ernmental entities to enter into agreements for the restoration of deteriorated civil infrastructure

for which renovation costs are less than the replacement value, that provide for the financing of

the restoration, and that include performance guarantees. The memorial further asks that gov-

ernmental entities join into joint powers agreements or other contractual arrangements to reno-

vate the deteriorated civil infrastructure, that provide for the financing of civil infrastructure res-

toration, and that provide, as part of the financing, performance guarantees provided by a third

party or risk-pooling provider.

Significant Issues

DFA noted that it appears that this legislation is intended to formally encourage the restoration of

depreciated or deteriorated civil infrastructure assets, specifically in instances where the restora-

Senate Memorial 37 -- Page 2

tion costs are less than the replacement value and where the restorations can be backed by a per-

formance guarantee of a third party or risk pooling provider. The Local Government Division's

Infrastructure Capital Improvement Plan (ICIP) identifies over $1.6 billion in infrastructure

needs for FY 2005, and $6.1 billion in needs through FY 2009.

PED indicated that, as related to school districts, the memorial duplicates efforts already being

accomplished through the Public Schools Facilities Authority (PSFA) and the Public School

Capital Outlay Council (PSCOC) for schools. All school districts are required to prepare and

implement a facilities master plan and a five-year preventative maintenance plan in order to qual-

ify for PSCOC awards. The PSFA assists districts in establishing preventative maintenance plans

that prolong the useful life of the districts’ buildings. A long-term plan and program along with

a permanent revenue stream already are in place for school districts to maintain, renovate and

construct classroom facilities that meet the current statewide adequacy standards.

PERFORMANCE IMPLICATIONS

DOH indicated that SM37 affects the DOH strategic plan in Program Area 2: Health Care Deliv-

ery – Public Health Division, Strategic Direction: Improve access to health services. Many of

the Public Health Division’s health offices are located in county-owned facilities. Some of these

facilities could benefit from renovation.

FISCAL IMPLICATIONS

No direct fiscal impact on state government.

DH/rs