Loading...
HomeMy WebLinkAboutAgenda - 05-04-1999 - 7e• ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No. I - e ACTION AGENDA ITEM ABSTRACT Meeting Date: May 4, 1999 SUBJECT: Value Engineering; Possibilities for County- funded projects DEPARTMENT: PURCHASING AND Public Hearing: No CENTRAL SERVICES Budget Amendment Reqd? No ATTACHMENT(S): 1. Value Engineering Report (School /County work session) 2. Excerpt from "County Government in North Carolina" Third Edition regarding Capital funding for schools. INFORMATION CONTACT: County Manager's office ext. 2300 Pam Jones, extension 2652 Telephone Number - Hillsborough 732 -8181 Chapel Hill 967 -9251 Mebane 227 -2031 Durham 688 -7331 Purpose: To investigate ways to ensure that construction and major renovation projects funded by the County are properly designed to meet both County and School needs within available resources. Background: The Board has heretofore expressed concern about the cost of some County and School projects funded by the County. In the wake of student population projections, it will become increasingly fiscally problematic to continue to fund schools using the same procedures as those used in the past. In an effort to ensure that public money is spent to the most advantageous end, the County Manager has explored the possibility of using value engineering as a core process of any County or School project funded by the County. A report outlining the value- engineering concept in some detail was shared with the Commissioners and both School Boards during a work session on March 31, 1999. A copy of that report is attached for your information. (Attachment 1) Based on discussion at the work session, it would appear that the value- engineering concept has merit with County funded projects. For the purposes of this abstract, County staff has assumed that the value engineering concept will be pursued on all County or School projects involving new construction or major renovation projects, heretofore defined as those with a project cost exceeding $100,000, unless that threshold is waived by the Board. For your information, $100,000 is the threshold at which advertised, sealed bids are required for construction and /or renovation work. In order for value engineering to be a credible part of any project, a certain number of issues require advance decisions: 2 1. Clear desired outcomes must be articulated in advance of any value engineering initiative. Presented glow are some outcomes that the Board may choose to endorse for value engineered projects. • We wish to ensure that an independent review of each building system is incorporated into the fabric of the design phase from concept through construction. Reviews could include, but would not be limited to the following: • HVAC systems • Materials used in construction (brick vs. block vs. stucco etc.) • Best delivery times /methods for materials during construction • Design function vs. Design fashion • Future use potential (ease of adaptability for changing uses and /or expansion of the building) • We wish to ensure that programmatic specifications as put forward by the planning committee or potential users of a facility are questioned as to their functionality vs. their cost; • We wish to ensure that every cost saving means available to the project is explored for feasibility and implemented when practical. The Board is requested to provide direction regarding: • The accuracy or desirability of the outcomes listed; and • To cite any additional outcomes the Board may wish to include. z The second critical element to initiating value" engineering into County funded projects is identification of the process by which value engineering- LsL carried out. This- is necessary in order to provide clear direction~ to =bothz.tho'-value„-engineer and the entity for-which the service is to be provided. Critical elements of the process include, but may not be limited to the following: • Qualified personnel to value engineer the project; • Clear reporting lines for the value engineer; • Clear scope of work for the value engineer (including clear direction on how the project status is to be communicated; to whom and how often); • Well- articulated means of measuring effectiveness of value engineering function. The recommended service delivery method would have the County contracting with an outside consultant, either a person or a firm. The County would hire this resource and they would address both County and School projects funded by the County. We are aware that the school systems have various means for achieving value engineering. Therefore, we would propose that the Board submit a request for an interrogatory to each school system to determine to what extent value engineering components exist in the planning and construction of their capital projects. This information would provide direction to the consultant as to what should be put in place to achieve the most beneficial results. The Board is requested to: • Provide feedback regarding additional elements that they deem critical and that should be considered as the scope of services for this function is developed; • Confirm that the County should pay for the services and request that the Manager includes it in the County's Capital Investment Plan. 3. The third element critical to ensuring the success of value engineering'' is to discuss steps that the Board could approve to enhance our resource management abilities in light of the potential savings this initiative should yield. As capital funding is discussed, it may be helpful for the Board to refer to the description of the process for budgeting capital costs for the school systems as presented by the Institute of Government. (Attachment 2) The Commissioners have considerable latitude in how the funds are appropriated for capital projects. The value engineering initiative is intended to reduce costs of construction for County and School projects funded--by the County and should be mandatory for all new construction projects and major renovations that exceed $100,000, unless that threshold is waived by the Commissioners. However, since the magnitude of success of this program can only be projected at this time, it may be advisable for the Board to explore alternative ways to allocate funds for the approved projects. For example, currently the project ordinance appropriates funds for the entire project based on a estimate provided to us by the schools. However, should the Board choose to do so, a reserve could be established for the full projected cost of a project, but capital project ordinances would be approved only after the cost had been firmly established by bid, a contract or other highly reliable cost determining means. Essentially, the amount of the appropriation would be equivalent to the amount of money ready to be spent for a particular function (planning, site development, construction, etc.) 4 While this may involve more paperwork and the Board may be called upon to take action at various milestones in the project rather than just at its commencement, it would appear to provide the County considerably more flexibility in resource management. Savings from the value engineering initiative would then automatically be left in the pool for reallocation to other projects. Should the Board opt to use this resource management tool, the County's Capital Policy would be modified to reflect the Board recommendations. The Board is requested to: • Provide feedback regarding their desire to pursue amended procedures to allocate funds for capital projects; and • To direct staff to prepare amendments to the Capital Policy for consideration by the Board at an upcoming meeting. Next steps: • The staff will reflect the Board decisions on the aforementioned items through a value engineering implementation plan, which will be presented to the Board as an agenda item on May 18. • Assuming the approval of a value engineering implementation plan on May 18, County staff would begin immediately to formulate a Request for Proposal soliciting value engineering services. • Since time is of the essence in getting the value engineer involved in on- going school projects, the staff would make every effort to bring forward the results of the solicitation for Board consideration before the end of the fiscal year. Financial impact: Projected savings when value, engineering is utilized correctly has been. estimated to range from $20 to $70 per every dollar- spent for value engineering. Recommendation: The Manager recommends that the Board take the following action:. • Confirm that the value engineering concept will be pursued on all County or School projects involving new construction or major renovation projects, heretofore defined as those with a project cost exceeding $100,000, unless that threshold is waived by the Commissioners. • Provide direction regarding the accuracy or desirability of the outcomes listed; and cite any additional outcomes that the Board may wish to include (from section 1); • Provide feedback regarding additional elements that are deemed critical in the value engineering process and that should be included as the scope of work for the consultant is formulated (from section 2) • Confirm that the County should pay for the services and request that the Manager includes it in the County's Capital Investment Plan. • Provide feedback regarding the Board's desire to pursue amended capital funding allocation procedures and if so to direct staff to prepare amendments to the Capital Policy for consideration by the Board at an upcoming meeting (from section 3). Memorandum TO: County Commissioners From: John M. Link, Jr. County Manager Date: March 20,1999 RE: Project Management The Board has historically expressed concern about the high cost of construction for County funded projects. Both Board members and County staff have explored ways to address this challenge through various means of project management. I attended a session at a recent City /County manager conference that dealt with value engineering. Based on what I learned during this session, I believe value engineering can fill the gap that we have recognized and allow us to use the County's construction dollars more effectively and efficiently. What is Value Engineering? Value Engineering offers a way to stretch construction dollars and to obtain a much needed second opinion based on a reliable and measurable approach. Value engineering systematically searches out high cost areas in a design and arrives at the best balance between cost, performance and reliability. Value engineering is not a design review. In summary value engineering offers the following benefits: • it follows a Value Engineering job plan that analyzes the project from a variety of angles in order to obtain the best answers for the specific project; • it uses a multi disciplined approach to "see' the project from as many different points of view as possible; • it questions everything. There are no "sacred cows" with value engineering. • it separates "needs' from "desires' • it employs life cycle cost analysis of critical components • it maintains a sensitivity to the design and the designer's point of view when creating • it also, however, analyzes the project from the owner /operator's points of view. - As a general rule of thumb, it is suggested that any project whose estimated constriction cost exceeds $5 million will benefit significantly from the value engineering process. As indicated earlier, Value Engineering is not review of a final design in an effort to cut a project such that it falls within budget. In fact, the continuum of value engineering effectiveness shows it to be most effective if begun during the design concept phase. County Commissioners Project Management Page 2 Savings opportunities Preliminary Final design Design design concept Implementation Costs As listed below, it is a process that shows greatest benefit if employed at several points in the design /construct process: • Early in the schematic design phase; • Concurrently with the engineering review; • When cost data becomes available; • During the working drawings phase (design is approximately 95% complete); and • Throughout construction. A system of checks and balances is maintained by carrying out the process during each of these phases. Mid - stream adjustments are thereby effected with minimal, if any, cost or time impact and a more successful projects are realized. The Process The job plan, which is critical to the successful Value Engineering process encompasses six distinctive phases as follows: 1. Information gathering. • This phase familiarizes the Value Engineering team with the contract plans and specifications. It involves a functional analysis of the project that looks at the total system first and then each of the component parts. Energy utilization models as well as cost models are prepared in advance of this stage and are shared with the Value Engineering team. 2. Speculativetcreative phases. • This phase of the job plan is used to generate many ideas for the project in an effort to remove barriers to a fri3e flow of ideas. 3. Evaluation/analytical phase. • The Value Engineering team will analyze the ideas resulting from the creative session and will select the best ideas for further development. 4. Development/recommendation phase. • The Value Engineering team members prepare alternative designs for consideration with life cycle cost comparisons of the original designs and proposed alternatives. All recommendations are documented with sketches, basic concept and recommendation of alternatives. 5. Report phase. • The Value Engineering team presents the results of their work to the designer and owners. 10 County Commissioners Project Management Page 3 6. Implementation phase. • The project designer will provide responses on the alternatives identified and will incorporate them into the design, upon agreement with the owner. The Managers who have seen Value Engineering work for their projects indicate that possibly the most critical element of this process is that it be carried out by a certified value specialist (CVS) who has experience in construction. There are firms who provide this service and 1 would recommend that this step be incorporated into all County funded projects. The Value Engineering process would ensure that County funded projects are designed and built to the most efficient standards available. County Project Management As you know, currently the management for County projects is provided by a team of County staff members who: • ensure that the projects stay on track as it respects schedule and budget; • serve as the County's representative for construction/contract related issues; • work in tandem with the designer to provide inspections to assure that the quality of work is as specified. • ensure the project is properly closed out upon completion and that documentation and warranty information is obtained; • follows up with contractor and/or designer regarding warranty issues as they may arise during warranty period, which extends for one year from completion. Recommendation With this in mind, 1 would propose to the Board that the County routinely employ Value Engineering strategies for all projects in excess of $5 million, and that the Board recommend the same approach to the School Boards for School Capital Projects. I would further recommend that we review all projects for Value Engineering potential and include any project below that threshold if we determine it would benefit from Value Engineering. The Value Engineering process would broaden this partnership among County and/or School staff, the designer and the contractor(s) to bring a project to fruition in the best way possible. In an effort to give you insight regarding the Value Engineering process, I am attaching information from a firm that provides this service who attended the recent City /County Manager's conference. I would propose that this subject be discussed as part of the work session agenda with the School Boards on March 31, 1999. Should you have questions or comments in advance of that work session, please feel free to call me. N I CONDUCTING A VE STUDY CONDUCTING A VALUE ENGINEERING STUDY As indicated on the following diagram, all of our VE studies follow a definite task flow. This strict application of proven management principles assures that the results will be well developed, easily understood recommendations with optimized cost savings. On the pages following the diagram are the steps that we take during each phase of the study and the input that we expect from the Design Architect/Engmeenng firm. We have used the following approach on our past studies with great success: • Prestudy Preparation Phase • Project Study Workshop Phase • Post Value Engineering Study Phase The organized approach that we use both in preparation for the workshop and during the value engineering workshop, allows us to maintain a quick turn around time for the project study and the submittal of the Preliminary Value M*=ring Reports. This approach also allows us to maintain the proper coordination among the Designer, the Owner and the value engineering consultant. The preparation and organization for a value engineering study are vital to its success. This phase of the project is used to bring the VE team up to speed on the project and to remain abreast of the progress of the project. The prestudy phase is also used to orient, the Owner and the Designer in the work that the VE team will be doing. The Owner and Designer are an integral part of the value engineering effort and it is the coordinator's responsibility to ensure that they are informed as to what the VE team is doing. • Arrange a value engineering coordination /orientation meeting with the Owner and Designer to review the organization and management of the study approximately three weeks prior to the workshop. This meeting will also explain the principles of value engineering and the proposed project approach. VALUE ENGINEERING PROJECT STUDIES TASK FLOW DIAGRAM PRESTUD Y PHASE pro)ect predudy construction cost annual cost life Cie cost coordiination preparation (CC) model (ACC) model (LCC) model a Coed Design Data a Dtetrbuto by Process • Inside �w • hckede CC for Cod � • = to team . Dy�ute by Trod. • hc�• Labor a Inckede AC • igpesf Format for '''"�'•� RewMaNan • � Cod Data . CandRct 6rapMc Model ' a Dbkbt" Cash • OAerdalbn Meeft • �Nct ' D•�• �•0 • Drhbt" Coot • 87k. Pnvlorr mesh .Identify Hph Energy Anew • Compare to CC Model . DsMe No LCC Anew PROJECT STUDY PHASE orientation Information phase creative phase judgement phase development ent presentation phase ' Cmd1ndkrotof ��� . � • b Creative . Hmklat. Mnpractkd Idsm • &mRarhe tindkpr • Raect llon�nDedWw .Fad �m . CwaMe Idea LWg . Motniokr Qra ft El of e Allemat.albn • �rt to SMe VNM or FamNarlaalbn Dethe owner Require- • m1' Cal New. l• MN W lo.a. �. RroebeaEraoaa..a • knprove Efficiency • A �t and esign Sketch epare EoMmafe • D t� Acceptance mesh .Identify Hph Energy Anew lMS Cycle of DeveWp CoN/yyorlA a wy,p y y kiew for D.,.k ens "an From b� «� fulerRed Cost o dDeipn IMPLEMENTATION PHASE (POST STUDY PROCEDURES) report final acceptance Fstudy VE Prsln* a" • b F�It�n oeduct Poet VrodRtwp etkp Willi owner and • of vE ItepoAe to Reprinfary A9encln Prepares rr,a 't°Incio.a�;r°fo ,PACIFIC ENVIRONMENTAL SERVICES, INC. /I • Value Engineering Program Coordinator arranges for the collection of project study material. Informative desigm data should be distributed to team participants at least two weeks prior to the workshop to prepare the study team for the project. This would include design reports and preliminary plans, if available. The Designer would distribute this data to the appropriate people. Design drawings, cost data, specifications, design calculations, reports and pertinent regulations are required during the project. • Develop a Cost Model • Develop a project Energy Model. This model indicates where energy is consumed in the project. It is an indication of high energy usage areas that will require further investigation by the VE team. • Arrange for the logistics of the VE study. • The Designer should prepare a brief outline of the background and rationale for the project. Any constraints or areas in the design that are not to be analyzed should be clearly outlined. • Analyze and validate original cost data prior to the workshop study. The primary concern in the prestudy preparation phase is that all parties are well coordinated regarding the progress of the project and the changes occurring during the design and that there is ample information available for the VE team. Value engineering is a systemized approach for searching out high cost areas in a design and arriving at the best balance between cost, performance and reliability. It is not a design review. This basic VE Job Plan is followed in all value engineering studies. Value engineering requires the proper positive attitude and removal of roadblocks that thwart creative thinking. w Our experience has indicated that a project orientation by the program coordinator sets the stage for the study. A presentation by the Designer, giving the rationale for design, is also required. A brief presentation on the concept for each discipline in the design will benefit the value engineering study. We would expect to utilize this procedure and propose to establish a format for the study based on the following agenda. iow u 0 WORKSHOP AGENDA Introduction Project Orientation Project Description and Presentation by the Designer Information Phase Familiarization by team members with the contract plans and specifications. Continue familiarization with project and begin the Functional Analysis of the project. Prepare a graphical presentation of the Cost Model, which is prepared prior to the study. Look at the total system first and then at the component parts. Review energy utilization of the system design using the Energy Model prepared in the prestudy phase. Creative Phase Begin creative idea listing. The aim is to obtain quantity and association of ideas, to eliminate roadblocks and to allow free flow of ideas. Judgement Phase The value engineering team analyzes the ideas listed in the creative session and selects the best ideas for further development. DeveloQment Phase Value engineering team members prepare alternate designs for consideration with life cycle cost comparisons of the original designs and proposed alternatives. All recommendations will be backed up with sketches, basic concept and recommendation of alternatives. Presentation Phase Pacific Environmental Services, Inc. will provide all VE worksheets to be used during the study. The results of the team efforts will be summarized in an oral /3 ft presentation at the end of the study. Our experience has shown that representatives of the Design Architect/Engineer's firm and the Owner's staff who will review the VE team recommendations should attend the oral presentation. All work prepared at the end of the 40 -hour study will be complete with the back -up data, rationale, references, design calculations, sketches, etc. that will be included in the preliminary VE study report. A copy of this data will be given to the Designer at the conclusion of the oral presentation so their personnel may begin working on responses while the preliminary VE report is being prepared. Post Value Engineering Stuft Phase Upon completion of each value engineering workshop, the value engineering consultant will prepare the Preliminary Value Engineering Report for submittal to the Owner. The value engineering report will include the following: • Project Description and Design Concept of Project. • Original Design and Proposed Alternatives, showing sketches, design calculations and a comparison of the cost of owning and operating the facility. • Life Cycle Cost Comparison. • Potential Contract Savings. ■ DESIGNER'S INPUT /50 DESIGNER'S INPUT The Design Architect/Engineering firm provides written material for the VE team members to review in advance of the VE workshop. The Designer's staff may also provide a verbal presentation of this material to the VE team as one of the first items of the 40 -hour workshop to accelerate the orientation of the team into the potential alternatives. After the project study workshop, the Designer evaluates the recommen- dations of the VE team and drafts a report on implementation of the VE recommenda- tions. This section is intended as assistance to the Designer's staff in accomplishing their vital input into the VE effort for their project. Information Required from DesigM One of the key elements in a value engineering study is the information and background on the project. Effectively relating this information to toe VE team will make their efforts more productive. Our experience has shown that if the teams are well informed about the background of the study, their efforts will not overlap comparisons already made by the Designer's staff. The following is a listing of data, generally in descending order of importance, that is needed to conduct the VE studies. This material will be discussed and refined if necessary during the orientation meeting conducted with the Designer prior to the first VE effort: • 35% Plans • 35 % Specifications • Project Engineering Documentation (PED) • 35% Cost Estimate • Other Pertinent Background Information Affecting Current Design AG 0. Presentation by Designer The Design Architect/Engineering firm for a project has spent much time and effort in the analysis of design alternatives, process selection, building layout, equipment operating systems, building structure, and other areas of the design. Value en g' is not intended to be a review of previous design effort but a process of developing new combinations for review and acceRtance by the Designer and the Owner. Within the 40- hours of a VE study, the team members must become familiar with the project, must zero in on high cost areas, and develop alternative concepts. Being cognizant of the Designer's knowledge of the project helps to bridge the gap and to get a better feel for the rationale used in the development of the project. The following outline is given to assist the Designer in developing his orientation presentation to the VE team, usually given on Monday morning of the study week: 1. Rationale and history of development of the project. 2. Statement of the problem - What is the Project? 3. Reason for selected sites or site layout. 4. Constraints imposed upon you as the Designer by the Owner, regulatory agencies, etc. 5. Options and/or ideas yo would like the VE team to look at. 6. Site characteristics (power, soil conditions, traffic patterns, existing conditions). 7. Public participation for the project and- areas of public concern. 8. Description of project design. a. Layout/Civil b. Mechanical c. Electrical d. Architectural e. Structural f. Operations E /7 9. What comparisons were made in developing the design? 10. Factors influencing the development of the design. 11. Description of Capital Cost and O &M Costs for the project. Key Ouestions to Remember Are: • What did the Designer select? • Why was this selection made? • What alternatives were explored? After the Designer's staff make their presentation, the VE team members will be asking more specific questions about the detailed aspects of the project. The intent is to get a free flow of information in an informal atmosphere. It is anticipated the presentation by the Designer's staff should take approximately 1 lh - Z hours. Therefore, in -depth details are not needed for the presentation. U.MARSDIABEMWALWOMDV EMUDY a 60-IU VALUE ENGINEERING EXPERIENCE MISCELLANEOUS BUILDING PROJECTS 1982-1998 RESULTS OF STUDIES mi TOTAL CONSTRUCTION COST OF $1,510,110,000 49 PROJECTS TOTAL BUILDING SQUARE FEET 3,904,000 SUMMARY OF KNOWN RESULTS NUMBER OF PROJECTS . 47 KNOWN CONSTRUCTION COST $1,401,310,000 PRESENT WORTH OF IMPLEMENTED $163,702,000 SAVINGS RETURN ON INVESTMENT 95:1 u:% snaroftbo %voquals%vaaxp4nbem.doo MiSC Pape 1 of 3 MISCELLANEOUS BUILDING PROJECTS u: �•has•dlaMlvqurA•1v�pVaucn••.doo -161 P.W. IMP PROJECT DATE LOCATION CONST. COST SAVINGS* RETURN ON ($11000) ($11000) INVESTMENT 49. Vaccine Research Center 1998 National km+titutes of Health 23,400 1,827 179:1 1 -5 Story, 83,500 SF Betlesda, MD 48. Embassy BuNdkmg in Ustekistan 1998 Department of State, F90 12,162 1,888 56:1 1 -2 Story, 40,400 SF, I maticn/Add don Wad*gton. D.C. 47. Moderhetkm BuNdknp 37 1998 National ketltutes of HmM 85,400 4,420 152:1 1 -8 Story, 100,000 SF Lob Bethaeds, MD 48. Performing Arts Center 1998 CNtf 35,419 2,850 31:1 1 -2 Story, 173,000 SF Concert Hall Newport News, VA 45. SR 8281mprovements -Road Reeonstnrcdon 1998 Miami, FL 43,000 1,465 31:1 1.5 mile, Palmetto Expressway 44. Sports Wiliness Facility 1998 CNU 15,900 2,130 85:1 1- 2Story, 116,200SF, kWoor Track Newport News, VA 43. Thomas Nelson Community College 1998 Hampton, VA 8,120 480 20:1 1 -3 Story 49,100 SF, Classroom 42. NOVA Community Collage Parkkmg Garage 1998 Alexarm ble, VA 11,000 S00 24:1 21wel. 500 Spaces 41. Residence Hall N 1998 Christopher Newport Univ. (CNU) 11,074 283 13:1 1-4 Story, 117,000SF Newport News, VA 40. 1-4 Improvements -Road Reconstruction 1998 Orlando, FL 165,000 18,000 360:1 6.2 KM, 2 kuaclwnges 39. Family Housing Repairs 1997 Sabena Seca, PR 24,610 14,568 388 :1 144 Units, 227,000 SF 38. NOVA Community College 1997 Leesburg, VA 7,127 740 23:1 1- 3Stwy, 49,000 SF, LoWdeswoom 37. Fairfax Community College 1998 Faugmier County, VA 8,290 950 29 :1 1 -2 Story, 57,400 SF, Academic Watling 36. Air Cargo and Air Passenger Terminals 1998 Naples, it* 13,900 687 17 :1 1 -3 -Story, 1 -2 Story, 106,000 SF 35. Water Treatment Plant 1998 Public Works Department 28,500 1,171 47 :1 30 m9d St. Joseph, MO u: �•has•dlaMlvqurA•1v�pVaucn••.doo -161 MISC Paae 2 of 3 34. Intercoestal Waterway Bridge Replacement 1996 Corps of Engineers 16,000 1,200 60:1 5 Lane, Bascule Bridge Chesapeake, VA 33. Phase 9 Academic Building CISAT Campus 1995 James Madison University 25,189 2,517 93:1 1-4 Story 214,800 SF Hwdsonbu% VA 32. MSO Office Building, Dhahran, Saud) Arabia 1994 Khatib and AWW Assoc. 39,200 1,450 50:1 196,000 SF, 4-Story Bldg. 31. camp LA Jam, NC 1993 Atlantic Olvislon, NAVFAC 7,800 224 14:1 250 t pd LWW M 30. Water Supply Dons. RM+abitedan of 3 Dams, 1993 City of Norfolk. VA 19,750 3,800 130:1 Earthen Type 29. Police re/Reum Bldg. 1992 Port Authority of New York and 11.000 2,700 54:1 JFK Airport, RenovatianMaw; 2 -Story, 26.000 SF New Jormy 28. Medical Research Lab 5 Viverkrn, 1 -9 Story 1991 University of Virginia 25,663 1,800 51:1 152,200 SF Addition 27. International Airport. 2 -253 Story Bklps Additions 1981 Bangor, Maine 10,323 1,050 47:1 and Renovation; 150.000 SF 26. Juvenile Detention Center. 2 -2 Story Mile; 200 1990 City of New York DOS 57,804 4,160 136:1 Inhabitants, 168,000 SF 25. carpenter's/crafts Storage Bldg.; 1 -1 Story. 1990 Nevada Test Site, DOE 1,285 200 10:1 17,000 SF Bldg.; Prsfeb. Metal 24. Infrastructure and Power Plant; 1 -1 St., 56,360 SF 1990 Kuwait University, Kuwait 38,500 4,150 83:1 Utility System 23. SigneN:etlon Syetan for Subway 9ysdm 1990 DORTS, Taipei, Taiwan 120,000 24,250 255:1 22. Renovation (241,000 SF) and Addition 1990 Kuwait University, Kuwait 37,000 3,010 60:1 1244.200 SF) College of Social ScWrMM 21. Advanced photon Source Facility, 7 -1 Story 1990 Argwns Labs, Chicago, DOE 140,354 17,000 113:1 Bldgs. High Tech Cornow 781,000 SF. 1lesesrch tab 20. Highway Beautilicadon L+wWscapn9 5 MIM Stretch 1969 IUarhdwaarh, fNvada 7,260 950 34:1 Urban Highway 19. Employment Security Office, 2 -2 Story Bbi9. 1988 Salt Lake City, Utah - GSA 5.958 407 16:1 5 Par" Geroge, 74,900 SF 18. Old Birdhouse Convwah^ Bronx Zoo 1989 City of Now York 008 8,600 188 5:1 30,200 SF Historic Renovation 17. Bong Peak Mine - iron Ora Conveyor 1989 Liberia. Africa 19,600 4,850 84:1 (7km) and lifting 180 ml 17 Million Tons/Yw► u:bhK*dWj \vequsls \V-NM "- -doc a MISC 18. Subway Station and Approach Terminate 18,800 ft. Twin Bore 5.4 m Diameter) 1989 DORTS, Taipei, Taiwan 160,000 7,773 91 :1 Y 15. Police Precinct 2 -2 Story skies., 55,000 SF 1988 City of New York DGS 13,214 380 24:1 14. Ouaars Museum Reconstruction, 74,000 SF Historic Rehabilitation 1988 City of New York DGS 11,808 2,300 51:1 13. Administration Building Area 6 - 31,500 SF 1 Story BLidkg 1888 Nevada Test Site, DOE 2,487 700 36:1 12. MAK Waste Disposal Fac8ity, 1988 Oak Ridge, TN DOE 1,088 210 30:1 11. Hospital, 124 Bed. 2-Story Mead Nursing Facility, 63,400 SF 1888 Santa Clarke Health Can Assn. Valencis, CA 6,862 243 13:1 10. DOTAMP Standards and 6 Projects J 1987 City of New York OMB 72,300 51100 110:1 9. Fin Ham Standards Dafgn 1987 City of Nov York OMB 4174 310 9:1 8. FkNNrg Meadows Zoo Rehabilitation - 13 Acre Zoo and Ch&kM's Farm 1987 City of New York OMB 8,970 11810 32:1 7. Library Addition 22,000 SF Second Floor Addition 1986 City of Now York DGS 4,807 633 30:1 8. Parking Garage - 517 Specea, 4 Leval Undargroutd, 190,000 SF 1986 City of Chapal Hill, North Carolina 4,937 610 21:1 5. Standard Road and Bridge Specifications Nationwide 1984 U.S. Forest Service 500,000 par yr. 19,000 per year 655:1 4. Region X Hazardous Waste Site CkmWp 1884 U.S. EPA 9,270 1,510 42:1 3. Arizona 007,1010 Llghdng DoeliA 16 MIN Segment 1983 Arizona DOT Phoenix, AZ 51500 2,487 104:1 2. Orange Grove Road 1982 Pima County Arizona 4,855 820 30:1 1. Kim Boxlevard Interchange 1982 City of Tucson Arizona 5,200 630 25:1 u: WhwotA*Mlvpu W \voexplmiscna. doe Aachment ,L 160 COUNTY GOVERNMENT IN NORTH CAROLINA property taxes may not be used, the ordinance might specify the use of the ear- marked funds or direct which non - property -tax revenues are to support the fltic, tion in question. Finally, G.S. 159 -13(d) directs that the budget ordinance be entered in the minutes of the governing board and that, within five days after it is adopted, copies be filed with the budget officer, the finance officer, and the clerk to the board of commissioners. Since the LGBFCA itself requires that this filing take place, the ordinance need not restate the filing requirement. Appropriations for Public Education? As noted earlier, special rules govern appropriations by boards of county com- missioners to school administrative units and community colleges. These pro"i. sions are discussed in this section. ALLOCATION OF PUBLIC SCHOOL APPROPRIATIONS County appropriations to a school administrative unit are made to two separ 'a portions of the unit's budget: School Current Expense and School Capital put. lay. The Current Expense Fund includes appropriations for the local share of the current operating expenses of the school system. The Capital Outlay Fund includes appropriations for site acquisition, new buildings and renovation, of existing ones, furnishings and equipment, new school buses, and activity buss and other motor vehicles. The board of commissioners may make lump -sum appropriations to these two funds, or it may allocate all or part of its appropriations to particular pupa" or functions in the Current Expense Fund or to specific projects in the Capital Outlay Fund. When the commissioners make a lump -sum appropriation, the school board is legally free to modify the budget for that fund in any way so long as it does not transfer current expense money to capital outlay and vice versa. The statutes permit such transfers only in emergency situations.' The board of commissioners may choose instead to restrict the use of cmarr appropriated money by allocating its appropriations. Appropriations for schod current expenses may be allocated by purpose or function as noted abom the purposes and functions are defined in a uniform chart of accounts promulowd by the State Board of Education. The list of purposes and functions as of Mani 1, 1987, is shown in Table 7.1. To allocate by purpose, the board of county commissioners would appsopri� a specific amount of money for Instructional Programs, Supporting Scvr v ~ Community Services, and Non - Programmed Charges. Such an aUocatioa NOW allow the board of education to use that amount of county- appropriaw fW& only for expenditures for that purpose. To allocate by function, die bond d commissioners would appropriate a specific amount for one or mace aI 1k a ..o Source: N. Uniform Budd functions li appropriati. funds alloc, function. Even thot pose and fur ticular purp the amount c than a specit board of corn 10 percent. The board atton by proje met categorit Id constructi, ac9uisition or i tndude acquis: County capital by specific acq IORTH CAROLINA Budgd Arparation and Enactment a3 161 might specify the use of the ear- Table 7.1 �c revenues are to support the func- Purposes and Functions of Expenditures for Local Education Agencies Instructional Programs dget ordinance be entered in the I I Regular Instructional Programs ;thin five days after it is adopted, Special Instructional Programs Dance officer, and the clerk to the i Adult Education Instructional Programs Co- Curricular Instructional Programs itself requires that this filing take Math /Science Programs ing requirement. Other Instructional Programs Supporting Services Programs Pupil Support Services • Elie Education' Instructional Staff Support Services p by county nations boards of coon con- Administrative Support Services School Administration Support Services community colleges. These provi- Business Support Services Central Support Services Other Supporting Services Community Services Programs ROPRIATIONS Regular Community Services Other Community Services rative unit are made to two separate Non- Programmed Charges t Expense and School Capital Out- Payments to Other Units and Transfer of Funds ipropriations for the local share of Reserve for Federal Grants Other Non - Programmed Charges l system. The Capital Outlay Fund new buildings and renovations of Sourm. N.C. State Board of Education, Controller's Office, North Carolina R.Nic Schools Unif— Budget Manual, March 1, 1987. ,ew school buses, and activity buses mp -stun appropriations to these two functions listed under one of the four purposes in Table 7.1. When the county rpropriations to particular purposes appropriation is allocated by function, the board of education must use the or to specific projects in the Capital funds allocated to a function only for expenditures included within that ake a lump -sum appropriation, the function• budget for that fund in any way so Even though county appropriations for current expenses are allocated by pur- e money to capital outlay and vice Pose and function, the board of education may change appropriations for a par - :)nly in emergency situations-8 ticular purpose or function so long as the change does not increase or decrease instead to restrict the use of county- the amount of county appropriation allocated to that purpose or function by more )nations. Appropriations for school than a specified percentage. This limiting percentage is 25 percent unless the use or function as noted above; the i board of commissioners specifies a lower figure; that figure may not be less than :orm chart of accounts promulgated 10 percent. purposes and functions as of March i The board of commissioners may allocate its School Capital Outlay appropri- ation by project. The uniform chart of accounts for the public schools identifies ity commissioners would appropriate wee categories of projects. Category I projects include acquisition of real estate rnal Programs, Supporting Services, and construction as well as renovation of buildings. Category II projects include ed Charges. Such an allocation wound acquisition or replacement of furnishings and equipment. Category III projects .mount of county-appropriated fund) include acquisition of school buses, activity buses, and other motor vehicles. :o allocate by function, the board of County capital outlay appropriations for Category I projects may be allocated ific amount for one or more of the by specific acquisition, construction, or renovation project. Category II and 162 COUNTY GOVERNMENT IN NORTH CAROLINA Category III appropriations are allocated by the entire category rather than by individual items of equipment or furniture or by individual vehicles. If the board of education wishes to increase spending above the appropriation by the county commissioners for a Category I project, it must obtain their approval OTHER SPECIAL RULES AFFECTING SCHOOL APPROPRIATIONS Continuing Contracts for Capital Outlays (G.S 115C- 441(cl)). A change made in 1985 to the School Budget and Fiscal Control Act pern is school administrative units to enter into contracts for multiyear capital irnprme. ment projects or outlays, without the school unit's budget resolution for the cur. rent year including an appropriation for the entire contractual obligation However, the current year's school budget resolution does have to include an appropriation authorizing the current year's portion of the obligation, and thi, appropriation must include sufficient funds to pay amounts falling due under the contract in the current year. Moreover, the county commissioners must ap. prove such a continuing contract entered into by the school board. Appro"y of the contract by the board of commissioners obligates it to appropriate fiords in future fiscal years to pay the amounts falling due under the contract in those years. Lease - Purchase Acquisition of Automobiles G.S. 115C- 47(28) permits boards of education to purchase automobiles us* lease- purchase or installment - purchase contracts. Such contracts may ettend ova more than one year, and the school administrative unit may give the Scher a security interest in the automobiles as security for payment. The automobie are the sole security for payment given by the school unit. The unit may = pledge future years' revenues such as county property tax moneys to secure it payments, and, if the unit stops making payments during the contract, the ody recourse of the seller is to take possession of the automobiles. Site Purchase Appmaal The School Budget and Fiscal Control Act provides that the board of edea tion may not enter into a contract to purchase real property or spend any ' to buy it without the approval of the board of commissioners as to the Amor to be paid for the site (G.S. 115C- 426(1)). This approval is given as part d*I closing of the transaction. Note that the board of education, not the bard d commissioners, is responsible for selecting school sites (G.S. 115C -514 T keaa► missionets may not refuse to give their approval because they d6agra *1* 4. ;AROLINA category rather than by .tal vehicles. If the board - operation by the county n their approval. PPROPRIATIONS 5C- 441(cl)). scat Control Act permits ultiyear capital improve - et resolution for the cur - contractual obligation. does have to include an F the obligation, and this Iounts falling due under commissioners must ap- school board. Approval I it to appropriate funds Eder the contract in those rchase automobiles using contracts may extend over nit may give the seller a tyment. The automobiles I unit. The unit may not tax moneys to secure the ing the contract, the only omobiles. that the board of educa- )erty or spend any money isioners as to the amount oval is given as part of the lucation, not the board of (G.S. 115C -517). The com- .use they disagree with the i. Budget Preparation and Enactment 163 decision to build a school at a particular place; they are to determine only whether the land is worth the agreed -on price. School Supplemental Tax Budgets Under G.S. Chapter 115C, Article 36, the voters of a school administrative unit may approve the levy of supplemental taxes for "any item of expenditure in the school budget." Although supplemental taxes are therefore authorized for capital outlay purposes, most units have approved supplemental taxes for cur- rent operating expenses. The maximum supplemental tax rate that may be ap- proved by the voters under general law is S.50 per $100 value ( ;.60 for a school administrative unit or school area with a total population of no less than 100,000). Some school units have higher rates authorized by local legislation passed by the General Assembly. The board of county commissioners, as the tax - levying authority for the administrative unit, decides each year how much supplemental tax revenue the administrative unit needs and levies the supplemental tax ac- cordingly. The board of education does not have the power to require the board of commissioners to levy any particular rate of supplemental tax. These revenues are shown separately in the school administrative unit's budget. Because they literally supplement the school program provided by state and coun- tywide revenues, the specified amount for each purpose to be supplemented should be set out in the school budget. Even though school supplemental taxes are levied and collected by the county government, they are considered by law to be revenues of the school administra- tive unit and not county revenues appropriated to the school unit by the com- missioners. Therefore, the power to allocate appropriations by purpose, function, and project does not extend to voted supplemental taxes. Apportionment of County Current Expense Appmpriations Each county has a school administrative unit. As of 1987 there were also 40 city school administrative units. Though most counties have no city administra- tive units, some have two or more. When there are city school administrative units in the county, the county administrative unit and the city unit(s) will each submit its proposed budget to the board of county commissioners. G.S. 115C -430 requires that the board appropriate exactly the same amount per pupil to each unit for current operating expenses. Capital outlay appropriations need not be so apportioned. Correct apportionment of current expense moneys is tested by dividing the board of commissioners' current expense appropriation to each school adminis- tradve unit by the school unit's "total membership;' an official calculation of the number of students in the school system. By statutory definition, a school �6 .f 164 COUNTY GovERNMENT IN NORTH CAROLINA Bu unit's total membership is its projected average daily membership as determined Either board may appeal and certified to the unit and the county commissioners by the State Board of , # Court of Appeals. If such a Education. The per -pupil amount resulting from this calculation must be the lay in levying taxes for the same for each school unit in the county. commissioners to appropn. unit's current expense fur revenues, to equal the total RESOLVING DISPUTES OVER THE SCHOOL BUDGET ing G.S. 115C -431 An appeal of the school Article IX, Section 2, of the state constitution requires the General Assembly the normal process of levyi to provide a general and uniform system of free public schools and authorizes usually begins to prepare t it to assign to units of local government such financial responsibility for the school get and set the tax rate. A: system as it may deem appropriate. The General Assembly has made the county on September 1, and mos governments responsible for raising much of the money needed for school capi- before that date. Interest c tal outlay purposes and a significant share of the funds to pay the current oper- ary 6. Clearly, the tax levyil ating costs of local school systems. Furthermore, the state permits school boards while the county waits for t and boards of county commissioners to supplement this basic educational pro- If it seems likely that a fi gram mandated by the state. As was noted earlier, this system of school finance to mail tax notices by the r offers an ideal forum for a clash between citizens' demands for improved educa- to adopt a budget and lev tional services and their demands for lower taxes. North Carolina law provides will prevail in the litigation a curious and possibly unique way of resolving this kind of conflict over the school the commissioners make z budget: a court trial on the issue of how much money the schools need for a may require and sets out certain year. If the school board finds that it cannot fulfill its responsibility to provide an COMMUNITY COLLEGE adequate school system with the amount of money the county has made avail- able, it may invoke a special procedure set out in G.S. 115C -431 for protesting County appropriations the appropriation. The procedure begins with a formal determination by the rent Fund budget and its school board that the appropriation is inadequate. Then, the chairs of the scbool current expense and capit board and the board of commissioners arrange a joint meeting of the two boards. general the fiscal interrel: This meeting must be held within one week after the commissioners have made community college truster their appropriation decision. At the joint meeting, the boards review the entire With respect to the co, school budget again and make a good -faith effort to resolve their disagreement. sentially free to exercise t If they cannot work out a compromise, either board may refer the matter to state executive departme, arbitration by the clerk of superior court. This step must be taken within three the commissioners to apl days after the joint meeting. The clerk has ten days to make an award. sion for voted supplemen Within ten days after the clerk's decision, either board may appeal to superi- { tionment statute for schoo or court. In court, either board may request a jury trial. The issue for the court to allocate their commu to decide is what amount of money is needed from county appropriations in project. The allocation l order for the school unit to maintain a system of free public schools in the county. those that apply to scho If the court finds for the school board in this litigation, the judgment will be that the board of commissioners is to appropriate a specific amount of money Appropriati to the school unit. The court will order the commissioners to levy such taxes on property as may be necessary to make up this sum after other available The budgeting relatiol revenues are taken into account. Ij of social services and he i rmined yard of be the •embly iorizes school : oulyty 1 capi- oper - >oards d pro - nance duca- )vides school for a Je an avail- sting y the =hoot ards. nade ntire 'ient. er to hree peri- ourt is in inty. 1 be )ney axes Budget Arparation and Enacdnent 165 Either board may appeal the superior court's judgment to the North Carolina Court of Appeals. If such an appeal would otherwise cause an unreasonable de- lay in levying taxes for the current year, the superior court will order the county commissioners to appropriate to the school administrative unit for deposit in the unit's current expense fund a sum sufficient, when added to other available revenues, to equal the total revenue available for current expenses in the preced- ing year. An appeal of the school appropriation inevitably causes serious disruption in the normal process of levying, billing, and collecting property taxes. The county usually begins to prepare tax bills as soon as the commissioners adopt the bud- get and set the tax rate. As explained in Chapter 6, property taxes become due on September 1, and most counties try to have tax notices in the mail on or before that date. Interest on the current year's taxes begins to accrue on Janu- ary 6. Clearly, the tax levying and collection process cannot be delayed indefinitely while the county waits for the courts to rule on a dispute over the school budget. If it seems likely that a final decision will not be reached in time for the county to mail tax notices by the middle of October, the commissioners should proceed to adopt a budget and levy property taxes on the assumption that the county will prevail in the litigation. If the school board does, G.S. 115C -431 directs that the commissioners make any supplemental tax levy that the court's judgment may require and sets out special provisions for collecting that levy. COMMUNITY COLLEGE APPROPRIATIONS County appropriations to a community college are made to its County Cur- rent Fund budget and its Plant Fund budget. These funds are analogous to the current expense and capital outlay funds of school administrative units, and in general the fiscal interrelationship between the county commissioners and the community college trustees is similar to the arrangement for the public schools. With respect to the community college, however, the commissioners are es- sentially free to exercise their fiscal discretion without extensive oversight from state executive departments or the courts. There is no mechanism for forking the commissioners to appropriate any particular sum to the college, no provi- sion for voted supplemental taxes for it, and nothing comparable to the appor- tionment statute for school current expense. The commissioners do have the power to allocate their community college appropriations by purpose, function, or project. The allocation process and its consequences are virtually identical to those that apply to school administrative units. Appropriations for Social Services and Health9 e k able The budgeting relationships between the county commissioners and the boards of social services and health also deserve special mention. The financial affairs ' r