2020 Capital Outlay Application Training

1. 2020 Capital Outlay Application Training Presented by Barbara J. Romero, Capital Outlay Coordinator

2. Capital Outlay • 2018 GOB timeline • 2019 Capital Outlay Recommendation • What is Capital Outlay • What qualifies for funding consideration • Categories and Criteria for Funding • Planning strategies • How to submit a successful application • Grants Management

3. 2019 Capital Outlay Recommendation • Received 112 Applications for funding • Totaling $28,700,454 • 35 projects recommended for a total of $3,959,408 Remaining projects were deemed ineligible, did not meet the fundable range or was not considered a priority or high need.

4. Capital Outlay in a nutshell • Capital Outlay funding is a non-recurring expense to fund plan, design, construct, renovate, purchase and equip government owned assets. The funds are based off the states bonding capacity or its ability to pay the debt over a long period of time. There are 2 funding sources Severance Tax Bond (STB) that is repaid using the royalties collected from companies that come and sever a natural resource from our NM lands based on the value of the resource such as oil, gas, pumice, gypsum etc., and General Obligation Bonds (GOB) which is repaid through collection of property tax which is equal to 1% of the total prior year assessed property values. GOB occurs on even numbered years. The bond measure must be voted on in the general election. • Capital Outlay funds cannot be used for operating expenses, administrative fees, studies, employee salaries, supplies, events, brochures, retroactive reimbursements of previous payments, loan payments or for a private non governmental entity per Article 9, Section 14 of the Constitution of New Mexico (anti-donation clause) • Capital Outlay funds do not require a local match, however the project will look more favorably on the project if the local government provides fiscal support. There is no cap on the amount you can request. The state has set a minimum threshold of $10,000 or more.

5. What is considered a senior center? The ALTSD is mandated under the Older Americans Act (OAA)of 1965 to provide case management, in-home services, transportation, senior center group meals, family caregiver support, and health promotion and disease prevention services as well as information and referrals. These are considered the core programs. A senior center should provide space for all or some of these services. The services must be identified in your Area Agency on Aging AAA contract. There must be set times for the services. If the building is a dual use building, you must identify the square footage used for the senior center and other use. Make sure you indicate if this is a meal site or full service center *remember the asset must benefit a qualifying senior. Anything that does not directly impact the senior for the above mentioned services does not qualify. There are other funding sources.

6. Purpose This process allows the local or tribal governments with the opportunity to bring forth requests for projects that rise to a critical status and that address an urgent need or emergency situation which immediately endangers occupants of the premises or creates a serious threat to the health and or safety of citizens or request equipment that have met their useful life. It also allows the Aging and Long Term Services Department and Project Review Team to review, rate and rank and provide a recommendation for senior center projects statewide in-line with our agency ICIP • Situations in which immediate action is necessary; • The situation would disrupt a senior center from operating or failure is imminent if not corrected in a timely manner; • The issue can be supported by a subject matter expert; • The situation was not a direct cause of poor maintenance or neglect and steps were taken to prevent, alleviate and or correct the situation; and • The resources required to correct the situation were unavailable.

7. Other funding sources • Local funds – Municipal bonds • Federal funds – used as a match or leverage (Provide copy of Award Letter) • Other state funding sources: Tribal Infrastructure Funds (Public Facilities on Tribal Lands) Water Trust Board Funds Community Development Block Grant New Mexico Department of Transportation (NMDOT 5310) New Mexico Finance Authority (Planning Grants)

8. Categories • A-1 Code Compliance (ALTSD ICIP #1 Priority) • A-2 Renovation (ALTSD ICIP #2 Priority) • A-3 Meals or Other Equipment (ALTSD ICIP #3 Priority) • A-4 Vehicle (ALTSD ICIP #4 Priority) • A-5 New Construction or Major Addition (ALTSD ICIP #5 Priority) • A-6 Plan and Design

9. Project categoriesA-1 Code Compliance Protecting property values and the environment Complying with regulations such as land use and zoning ordinances Health and housing codes Uniform building standards and fire codes Complying with the Americans with Disabilities Act (ADA) (Code compliance renovation and improvements must be detailed and fully identify the specific issue(s) being addressed. Describe how the issue was identified and how the renovation will address the issue. The request must include documentation in support of the request, such as letters from State Fire Marshall’s Office, Environment Department, Department of Health, Office of Environmental Health, or other relevant oversight entities. )

10. Project Categories cont…A-2 Renovation Restoring a building to an earlier condition by repairing or remodeling Making improvements to something already in existence (Renovation of privately-owned facilities is prohibited by the New Mexico Constitution. Privately-owned is defined as facilities owned by private individuals, corporations or other organizations, including non-profit organizations and religious entities.)

11. Project Categories cont…A-3 Meals / other equipment • Machinery or apparatus, components and any other articles for use in preparing, cooking and serving a meal • Machinery or apparatus, components and any other article to make an action, operation, or activity easier to serve a particular purpose (Equipment must have a useful life of at least 7-10 years and be valued at $10,000 or more. Do not include consumable supplies or other non-capital items, such as pots, pans, utensils, or trays)

12. Project Categories cont…A-4 Vehicle A vehicle for transporting people and or goods 50% of the vehicles in a fleet must be accessible for persons with disabilities Must meet useful life (Vehicles must have over 100,000 miles and be more than 7-10 years old or provide documented proof that the vehicle is in disrepair or no longer meets the needs of the center.)

13. Project Categories cont…A-5 New Construction / major addition Building a new structure Increasing the square footage by more than 35% of its footprint Demolishing or reconstructing more that 35% of the exterior walls or structural members of a building* *if you intend on including demolition as part of the cost it must be noted in order to include the language in the appropriation

14. Project Categories cont…A-6 Plan / Design A plan, blueprint or drawing made to scale to show the look and function or working of a building or other object before its made

15. Getting prepared Planning and preparation are crucial to positioning you to secure State of New Mexico appropriations. • Gather and complete the asset inventory listings – seek input from staff that use asset • Meet with council or committee members to discuss needs • Download the application from our website http://www.nmaging.state.nm.us/capital-outlay.aspx • Contact subject matter experts to evaluate project • Gather quotes / cost estimates for the project • Set up project team meetings – divide up tasks • Schedule a visit with AAA or COG to screen the application • Determine if this project is critical or if it can wait until the next application cycle.

16. Who should be involved • Project Development Team • Present needs and assess priorities • Determine if they can be phased • Look for other funding sources • Fact Gathers • Solicit professional guidance • Determine cost estimates • Develop timelines • Action Group • Assist in preparing the application • Seek community input

17. Project Development Team • Needs • How did we determine the urgency? • Can we pay for the project? • Where do we go for the funds? • Is it a major project or can it be phased? • Are they critical in nature? • What is the effect on the clients served • Asset management listings • Code compliance issue • Professional opinion • Do we have any O & M funds available? • Is there a need to phase the project. Can we meet the obligation requirements?

18. Fact Gathers • Solicit professional opinions • Determine preliminary cost estimates • Develop Timeline • What type of professional do we need • Roofing, flooring, structural, plumbing • Obtain a cost proposal or estimate from one or more professionals • Better to get a couple to compare • Develop a realistic timeline • Determine if project needs to be phased • If phased a working phase must be complete

19. Action Team • Who should be responsible for completing the application? • How much time should we dedicate • What to expect after submission • Mayor, finance director, senior center director, etc.,,, • Plan on this taking around 2 months to complete the process • Schedule professionals at the start • Hold meetings twice a month and progress closer to submission time • Do we call the agency or do you notify us

20. 2020 Application • Lets take a look at the application itself.

21. Applicant information and Certification • Contact information – should be the person with knowledge of the project and facility • Provide other names the facility is referred to • Executive order compliance • Current annual audit • Approved annual budget from DFA/Local Government Division (LGD) • Submission of quarterly financial reports • Senior Facility Infrastructure Capital Improvement Plan (ICIP) 2020-2024 – next due September 16, 2019 (2021-2025) • Certification from Chief Elected Official of the local or tribal government (or designee) * if you are not applying for 2020 GOB funds sign and return. Please add the reason on a separate page along with page 2.

22. Part I - Facility information form Used by the Department and the AAA to gather important information about each facility • Ownership • If non-profit or service provider is there a operating and use agreement in place • Age of the facility • Documented repairs, and past funding sources used (improvement, purchase, construct, ADA compliance) • Include any other pertinent information that would provide insight as to the current and future capital outlay needs of the facility. * complete 1 facility information form (pages 3 – 5) per facility

23. Part II - Uses • Current size • Is the size sufficient • Location • Nearest similar facility • Type of center • Hours and days of operation

24. Part III – Beneficiaries • How many people on average attend / daily/ weekly/ monthly • What services are provided and counts daily/ weekly/ monthly counts • How many transportation services daily / weekly/ monthly Make sure that you can provide justification on the attendees. Do not provide census data or trending analysis.

25. Part IV – Operation and Maintenance • Operating staff – including volunteers • Sources of funding • Average monthly costs for utilities and maintenance – who pays for it

26. Required forms*If not included, the application it will be deemed ineligible and not recommended for funding • Completed application form(s) properly certified • Category request form - • Asset Management Listings • Facility and Fixture • Meals/other equipment • Vehicle • Project Evaluation Form (Subject Matter Expert) • Quotes or Cost Estimates • Schematic Design – construction or renovation project (if applicable) • Operating and Use agreements • Infrastructure Capital Improvement Plan (ICIP) current published

27. What is Asset Management? Maintaining the desired level of service at the lowest life cycle cost to the owner. Allows the owner decision making over the best way to spend the limited funds to achieve the highest impact of the asset. The process should provide a means on how to operate, maintain, repair, rehabilitate and replace the asset based on facts and data collected thru your inventory review process. Asset Management is driven by 5 core components in order to achieve maximum useful life of the asset. * Remember you are required to maintain all assets purchased with Capital Outlay Funding

28. 5 Core Components • Current State of the Asset • Level of Service • Criticality • Life Cycle Costing • Funding

29. Current State of the Asset This component is the physical process that you determine the following (inventory) • What you own • Where it is located • What is the condition of the asset • What is the useful remaining life • What is the replacement value Gather all the data on each asset, use the existing inventory listings provided by ALTSD or one created in-house. This should be conducted periodically and kept up to date. Use identification numbers that are unique to the types of assets and locations.

30. Level of Service This component is used to determine how you want the assets to perform for the services provided. These should be goal oriented. You should be able use the SMART or 5 Golden Rules method for determining that S – Specific M – Measurable A – Attainable R – Realistic T – Time bound

31. Criticality This component helps you determine which assets are more critical to the operation or delivery of a service. Ask yourself the following for each asset. • What is the probability that the asset could fail • What are the consequences if the asset fails After asking and answering the 2 questions you can determine which asset is more critical to the operation or delivery of a service

32. Life cycle Costing This component will assist the owners to decide on how they will operate and maintain the asset. • When to continue to repair or rehabilitate or replace • Should the owner include more operating and maintenance When you choose postpone maintenance due to budget short falls it is called deferred maintenance. That means that there could potentially be extensive long-term costs, reduction in asset efficiency, complete failure, safety or health risks, potential for citations from regulatory agencies, issues with asset can escalate, downtime, emergency repairs that could be more costly. Did you know that deferring maintenance could compound costs at approximately 7% more per year?

33. Funding This component will assist you in determining the amount needed for short term or continuous operation. • Determine the sources and amounts needed • Continued communication to council or commissions on budget needs to operational maintenance costs *Capital outlay funds cannot be used for maintenance costs (indirect cost)

37. Subject Matter Expert • Who should you call as the expert? • Contractors, plumbers, electricians, roofers, engineers, fleet managers, mechanics, specialized vendors • What is the criteria for the subject matter expert? • The person must be certified or licensed in that field and they should indicate the years of experience. • What if I do not get this signed and submitted? • First we will contact you and ask if that was an oversight and provide you time to send that back. If the time has passed and we did not get it back we will deem the application ineligible for failure to provide a required document.

38. NEW MEXICO AGING & LONG-TERM SERVICES DEPARTMENT – CAPITAL PROJECTS BUREAU PROJECT EVALUATION—STATEMENTS BY SUBJECT MATTER EXPERT CAPITAL OUTLAY REQUEST APPLICATION (REQUIRED ATTACHMENT) Name of Project: Applicant: Project contact name, phone number & email address: PROJECT EVALUALTION STATEMENTS BY SUBJECT MATTER EXPERT Review the list of eligible project categories on page 3 of the Application Guidance and provide a project evaluation to support the application being submitted. The subject matter expert must have thoroughly evaluated the proposed project and provide an unbiased statement specifically addressing the issue(s). Please provide a detailed estimate or quote. Subject matter experts may include State Fire Marshall’s Office, Environment Department, Department of Health, Office of Environmental Health, architects/engineers, nutrition experts, vendors, qualified field experts, or other independent contractors. (Use space provided at bottom of form to list qualifications.)* From the subject matter expert’s point of view, please explain why the situation requires immediate action to remediate the issue. In your expert opinion, verify that the proposed project was not a direct cause of poor maintenance or neglect; and/or how steps were taken to prevent, alleviate and or correct the situation. Explain how the situation will disrupt a senior center from operating or how failure is imminent if the issues are not corrected in a timely manner. Subject matter expert statement and evaluation of findings: Detailed budget cost estimate/quote (provide budget breakdown for project components) Amount Print Name:Signature: Address: Work Number: Cell Number: Email Address: Website Address

40. Ensuring a good application • Review the guidance and ensure that you can comply with all the requirements. • Review the scoring criteria – concentrate on the sections with the highest point value • All questions should be answered in detail. • Include all information relating to the critical need, or urgency of the project • Provide information on past efforts on the applicants part made towards the project • Include a detailed project description that provides the background, and the anticipated commencement and end dates. • Make sure the project is realistic • Provide all required supporting documentation (subject matter expert form, quotes, bids, plans and specs, cost estimates, letters of support, ownership, match or leverage documents, asset management listings, ICIP, other informational doc’s, etc,…..

41. Things to consider • What is the need? Is it critical? Can you justify? • Is the facility code compliant? Does the equipment meet safety standards? • Is the facility or equipment in disrepair, non-operable, or require extensive repair? • Is the facility or equipment not functional for the needs of the seniors? • Is it an urgent issue?(risk to senior) • Has the project been supported by a Subject Matter Expert? • Is there a plan for operating and maintenance? Do you conduct routine maintenance? • Do you have support from the community and the governing body? • Are you able to provide a detailed project description? • Will the item have a useful life of 7 to 10 years • Have you sought out other funding sources?

42. Scoring Criteria PROJECT PRIORITIZATIN SYSTEM 1. Application Narrative Summary & Background 10 points 2. Criticality of Need 40 points 3. Funding 20 points 4. Readiness to Proceed 20 points 5. Project Oversight 10 points 6. Project Management 20 points Total Possible Points 120 points

43. Project Review Team After the applications are received. Capital Projects Bureau will review the applications and will conduct a checklist for completeness. Any applicant with missing documentation will be sent an e-mail indicating what document was missing and provide an opportunity to submit. Once that time has elapsed and it the document is not received it will be deemed ineligible for missing required forms. 3 score review process • Dept. of Finance and Adm. (DFA), Capital Projects Bureau (CPB), Senior Services Bureau (SSB) 2 non-scoring reviewers • Area Agency on Aging (AAA) PSA’s, and Councils of Government The Project Review Team will review applications according to project criticality, Funding availability, project readiness, project oversight and project management. The Project Review Team will have approximately 30 days to review the applications and provide the score sheets. The team will meet in early June to go over the scores and finalize the list. The list of recommendations will be discussed with the Cabinet Secretary of ALTSD and if agreed upon will be sent to DFA. The projects included on that list becomes our Agency ICIP for each category.

44. Timelines • Applications are due in April • Project Review team rates projects April through June • Capital Projects Bureau meets with Cabinet Secretary in June and submits ICIP by July 1 • Capital Outlay Hearings are conducted in October and November by DFA and LFC • Projects are considered and DFA submits the list of projects to grant writers in December in anticipation of the Legislative Session • If successful the bill is passed. • STB will fund by June same year • GOB will go to voters on November ballot – if successful the funds will be available in June following year

46. Projects that are funded • You will receive a bond project questionnaire from SBOF – complete timely • Bonds are typically sold twice per year • Once bonds are sold, DFA will prepare budgets and notify the Agency when its complete • Determine compliance with Executive Order 2013-006 • ALTSD will prepare Notice of Grant Award requesting compliance with special conditions (if applicable) and request a scope of work • Upon receipt, ALTSD will review documentation and then initiate grant agreement

47. Executive Order 2013-006Agency Responsibilities • 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. Type of Audit – Unmodified, Modified, Adverse Opinion, Qualified or Disclaimer • Check for deficiencies. 5 special conditions (Budget, Capital Asset, Travel & Per Diem, Late Audit, Procurement and Cash management) • COSO – Committee of Sponsoring Organizations – 5 Elements – control environment, risk assessment, control activities, information and communication, and monitoring activities • Determine if the grantee has the resources to implement the grant agreement if not then a suitable fiscal agent • Complete a funding questionnaire for each grantee • Monitor grantees compliance with uniform funding criteria and mitigate non-compliance • Receive approval of deviations to grant template from any of the policies and procedures from DFA Cabinet Secretary prior to implementation • Monitor the private use of state capital assets (NM Constitution Article IX section XIV) Anti-donation • Revise and utilize new grant agreement template

48. Project Management Responsibilities of the grantee • Effective dates of the grant agreement, Grant Agreement Articles • Notice of Obligation –ALTSD, State Board of Finance obligation requirements 5% -6 months 85% -3 years • Timelines • Scope of work • Allowable uses of the funding • Timely expenditures –Quarterly • Reporting –Monthly - http://cpms.dfa.state.nm.us/LoginL.aspx • http://www.nmdfa.state.nm.us/uploads/FileLinks/6583a4770de841daa2d07b9e130326e7/CPMS_Instructions_Local_Entity_11_20_15_Version3.pdf

49. State Board of Finance Bond Project Spend Down

50. Reasons Applications were deemed ineligible • Application is not signed by a Chief Elected Official • Applicant did not provide mandatory forms • Applicant did not provide mandatory quotes, cost estimates • Applicant did not provide sufficient justification of critical need • Project is not eligible for funding • Cannot comply with NM Constitution “Anti-Donation” clause • Project was funded in a prior year (duplicate)