CAPITALIZED ASSETS: ROLES AND RESPONSIBILITIES - 6802

(Revised and Renumbered from 6805.)

The State Public Works Board (PWB), the Department of Finance (Finance), Departments, the Department of General Services (DGS), the Pooled Money Investment Board (PMIB), and the State Treasurer’s Office (STO) all perform key roles in carrying out the state’s infrastructure program.

1. PWB acquires property for the state, must approve the preliminary plans or performance criteria for capital projects, may set reasonable conditions for any project, and may issue debt instruments and authorize interim financing to construct facilities. PWB ensures that projects remain within legislatively approved scope and cost and are carried out in a timely manner and with proper due diligence. PWB has authority to augment projects by up to 20 percent, and may terminate projects under circumstances defined in statute and subject to legislative notification requirements. In addition, the PWB is vested with the power of eminent domain (condemnation authority) for the state entities under its purview. An overview of PWB’s role and responsibilities is presented in SAM Section 6820.
   
   
2. Finance reviews capital outlay budget change proposals (COBCPs) for inclusion in the Governor’s Budget, reviews legislation proposing capital outlay projects and capitalized leases, has authority to adjust the scope of projects subject to legislative reporting requirements, chairs and provides staff to PWB in that board’s oversight of project implementation, and has delegated authority from PWB to carry out certain of the PWB’s tasks. Finance approves preliminary plans, performance criteria, working drawings and proceed to bid, and contract award. Finance also participates in bond sale activities for capital outlay and capitalized lease projects and has the authority to grant requests for General Fund loans for projects needing interim financing before bonds are sold. Additional information on General Fund loans is provided in SAM Section 6844.

    

3. Departments manage the programs for which infrastructure acquisition, construction or improvement is a supporting activity. The department identifies program needs in a strategic plan, determines the related infrastructure requirements, prepares a five-year infrastructure plan, prepares individual capital outlay budget change proposals, works with Finance and may work with DGS to budget and implement the plan. At all stages of a capital outlay project or a capitalized lease project, departments are responsible for justifying program needs, keeping the project within scope and cost, and meeting administrative requirements set forth in statute and SAM.
   
   

   The following departments have authority to design and construct projects, exclusive of the control or oversight of DGS, with certain limitations:

   Departments authorized to manage capital outlay projects

   • 0250 – Judicial Branch
   • 3540 – Department of Forestry and Fire Protection (limited authority)
   • 3790 – Department of Parks and Recreation
   • 5225 – Department of Corrections and Rehabilitation
   • 6870 – California Community Colleges Board of Governors
   • 6610 – California State University
   • 6440 – University of California
   • 8940 – California Military Department (limited authority)
     
     

   Although the above departments have authority to manage capital outlay projects exclusive of DGS’ control and oversight, these departments remain subject to Finance and PWB control and oversight (special rules apply for the universities).
   
   

4. DGS has broad authority for real property acquisition, sales, statewide property inventory, and energy efficiency services for state and K-14 school facilities. Its services are offered on a reimbursable basis. DGS determines whether departments are capable of carrying out minor projects directly, and may delegate the management of minor capital outlay projects to departments. Additional information about minor capital outlay projects is provided in Section 6804. DGS provides advice to PWB for property acquisition as needed.

    

5. PMIB has the authority to grant requests for Pooled Money Investment Account loans for projects needing interim financing before bonds are sold. Additional information on PMIB is provided in SAM Section 6844.
   
   
6. STO is the state’s official agent for the sale of debt instruments. STO chairs the PMIB, and is a member of the PWB (only hearing and deciding matters related to the issuance of bonds). In addition, STO provides (or makes arrangements for) trust services for debt issuances. As agent for sale, STO holds the exclusive right to select financing teams for debt issuances. STO’s agent-for-sale role includes all debt financings of joint powers authorities, regardless of whether the state is a member of the authority. Additional information on STO is provided in SAM Sections 6842–6844.