CAPITAL OUTLAY BUDGET DEVELOPMENT HIGHLIGHTS - 6805
(Revised and Renumbered from 6812.)
No base budget for capital outlay. Capital outlay budgets are zero-based each year. This means the department must submit a written capital outlay budget change proposal (COBCP) for each new project or subsequent phase of an existing project. The requirements for COBCPs are presented in Section 6808.
When COBCPs are due. In general, COBCPs for major and minor capital outlay projects are due to Finance in late July/early August of each year. The precise due date will be provided in the annual Budget Preparation Guidelines Budget Letter. See Section 6806 for an overview of the budget enactment timeline. See Section 6807 for a listing of documents in addition to COBCPs required to request capital outlay funding.
Scope Meetings. Departments may be requested to schedule meetings and/or arrange site visits to help Finance clarify and evaluate project necessity and scope. Participants usually include Finance capital outlay staff, department staff, and the Department of General Services (DGS). The scope meeting establishes a common understanding among all parties about project scope and priority. Scope is defined in Section 6834.
When COBCPs are updated. New project proposals are generally not accepted after initial submittal of the COBCPs and Five-Year Infrastructure Plans in late July/early August. The precise due date will be provided in the annual Budget Preparation Guidelines Budget Letter. However, each COBCP submission is evaluated on a case-by-case basis and exceptions can be made to allow for a spring submission if the request is deemed critical and cannot wait until the next fall submission deadline. Otherwise, all technical updates, including cost updates, will be presented to the Legislature through a Finance Letter. In addition, non-technical proposals, including scope changes to existing projects or new projects justified as urgent, may also be proposed through the Finance Letter process. All COBCP submissions must be made by the deadline established annually for spring Finance Letters, generally in mid-February of each year, and as published in a Finance Budget Letter. Requests made after this deadline are discouraged but may be rolled into the overall May Revision process at the discretion of Finance. An updated or new COBCP must be submitted for policy and technical Finance Letters.
Five-Year Infrastructure Plans are required annually. Each department submitting a COBCP or Concept Paper must also submit, at the same time, a Five-Year Infrastructure Plan that includes the specific projects it intends to pursue in the following five-year time period. The requirements for this plan are set out in an annual budget letter (see below). Exceptions to project-level plans must be approved by Finance.
Annual Budget Letters for COBCPs and Five-Year Infrastructure Plans. Finance releases a Budget Letter annually setting specific due dates for COBCPs and Five-Year Infrastructure Plans, reiterating information requirements, and describing any form or processing changes. A separate Budget Letter is released after submission of the Governor’s Budget to establish due dates for requests for Finance Letters to make policy or technical changes to capital outlay projects proposed in the Governor’s Budget.
An additional Budget Letter is released biennially in the spring to provide updated cost indexes used to adjust construction costs for inflation.
Capital Outlay augmentations. If a project is anticipated to exceed its budget, the remedies are a scope reduction (subject to approval by Finance and legislative notification) and/or an augmentation of up to 20 percent (subject to approval by the Public Works Board (PWB) and when required, legislative notification). If those remedies are insufficient, the remaining options are to terminate the project or halt it while seeking a new or supplemental appropriation. Augmentations and scope changes are discussed in Sections 6833 and 6834.
No transfer of capital outlay funds between scheduled projects. The annual Budget Act includes control section language (Sec. 26.00) forbidding the transfer of funds between scheduled projects in a department’s capital outlay item. There may be some exceptions on an item-by-item basis; however, the PWB retains the authority to augment a project’s appropriation, provided there are sufficient resources available in the source fund(s).
California Environmental Quality Act (CEQA) review required. CEQA requires environmental review of any project undertaken in whole or in part by any public agency. See Section 6826 for more information.
Process exemptions for certain departments. Some entities, including the University of California, the California State University, California Community Colleges, Judicial Council, High-Speed Rail Authority, some departments within the Natural Resources Agency, and the Department of Corrections and Rehabilitation may manage the design and construction of their own projects without using the services of the Department of General Services. In addition, the Department of Water Resources (for the State Water Project) and the Department of Transportation (for highway-related projects) are not subject to the instructions contained in this chapter.