Guidelines for Capital Outlay Budget Requests

Capital Outlay Budget Requests and statutory requirements are outlined in R.S. 39:101 & 102. When preparing a five-year capital outlay plan, address both five-year capital planning and preventative maintenance. A first-year request should reflect only those projects which must be funded in the next year. If a project or portion of funding for a project can wait, it should be shown in Years 2-5 of the request.

For projects other than those funded from self-generated cash, federal funds or dedicated revenues, the only anticipated source of funding available is the General Obligation Bonds. Limit Capital Outlay Projects which do not have a cash source of funding to those which have an anticipated useful life of 20 years or more and a value or cost of at least $100,000. Examples of projects that qualify for inclusion in the capital outlay bill are:

• Land acquisition
• Site development and improvement
• Acquisition or construction of buildings or other structures
• Additions or expansions to existing facilities
• Major repair or renovation of existing facilities
• Installation, extension or replacement of utility systems
• Or major building system components
• Roof replacement
• Hazardous material abatement
• Fixed equipment which is connected to building utility systems
• Initial equipment and furnishings for new buildings

However, depending on the useful life of equipment and furnishings, a decision may be made to fund these items through alternative sources. In addition, agencies should explore alternative financing, such as equipment leasing programs, for equipment such as fiber optic or telephone cable installation or replacement, telephone systems, computer systems, video monitoring equipment, photo enforcement, etc.

Capital outlay requests should not include any of the following:

• Minor repair or renovation projects such as painting, flooring, etc.
• Minor roof repairs which do not extend the useful life of the roof
• Movable equipment and furnishings, except for that associated with new buildings
• Vehicles of any type
• Materials and supplies
• Repair or renovation of minor building components, such as plumbing fixtures, locks, etc.
• Routine maintenance of existing equipment

Any of these items that are needed should be addressed in your operating budget requests. Every state agency should have a written maintenance management plan in place which addresses these items through the operating budget, instead of deferring maintenance until a capital outlay budget project is needed. Capital outlay requests to prematurely replace roofs, or electrical, mechanical or HVAC equipment, due to lack of maintenance, will not receive capital outlay funds. Instead, these costs will be absorbed in that State Agency’s operating budget.

RS 39:112 and the State Constitution compel Facility Planning and Control (FP&C) to review Capital Outlay Requests for feasibility, and to notify appropriate legislative committees if any project is deemed not feasible. RS 39:112 also states that any project deemed not feasible shall not be included in the Capital Outlay Act. In order for FP&C to conduct feasibility reviews of Capital Outlay Requests, it is necessary that the Requests contain the statutorily required contents. For more information on this, please see STATE ENTITY or NON-STATE Entity Capital Outlay Budget Request Memo.

FP&C evaluates each Capital Outlay Requests for feasibility in accordance with the content requirements of RS 39:102. Capital Outlay requests need to be detailed and filled out completely including specifics on the project, what is being requested, what you have now, itemized break-out of costs, exact location of the project, timeline for the project, and any other descriptive information you can provide to establish statutory requirements. FP&C will endeavor to work with entities to ensure that the statutorily-mandated content requirements are included. Please submit Capital Outlay Requests in a timely manner to allow for corrections/revisions. Keep in mind that the final application date is November 1st. Those Requests that FP&C deems incomplete will be declared "unfeasible” and appropriate Legislative Committees will be notified per RS 39:112.

Applications for Capital Outlay funds are filed electronically in the Capital Outlay Request Tracking System, eCORTS. The website for eCORTS is: www.doa.la.gov/ecorts. Do not mail paper copies of your capital outlay requests. All requests will be submitted electronically only.

All capital outlay requests are to be submitted electronically through eCORTS to Facility Planning and Control, Capital Outlay Section, by November 1st. Requests submitted after November 1st cannot be included in the Capital Outlay Act unless:

1. The project is an economic development project recommended in writing by the secretary of the Department of Economic Development
2. The project is an emergency project recommended in writing by the Commissioner of Administration
3. The project is for a non-state entity, has a total project cost of less than one million dollars, and has been approved by the Joint Legislative Committee on Capital Outlay on or before February 1st.

Also, R.S. 39:101 states that any project, or component of a project, funded in a capital outlay act, which is not funded through a cash or non-cash line of credit as approved by the State Bond Commission or is not under contract in any one fiscal year shall not be considered in any subsequent year unless a new request is made. Also, Bond Counsel has advised that if Revenue Bonds are authorized but not issued in any one fiscal year, a request should be made for the subsequent fiscal year.