PURPOSE: This rule establishes requirements, organization and content for the Capital Improvement and Maintenance Budget submission.

1. (1) General. The Capital Improvement and Maintenance Budget submission of a department/agency for the next budget year is known as the immediate program. The immediate program represents the most urgent requirements for construction or maintenance/repair developed in the long range plan. Each budget item will be considered as a single priority. Specific definition and justifications are necessary for each budget item to demonstrate the urgency and the impact (favorable or adverse) on current programs and/or long range goals and objectives. The scope of work included in a budget item must be established in a logical manner. A budget item will include all work and equipment needed to satisfy a requirement (for example, all work and equipment necessary to replace a boiler and reconnect, with gauges, valves, etc.) Several options are available for smaller elements of work. All maintenance/repair work for a single facility may be combined into a single budget item, or maintenance/repair work of a similar nature, for several facilities may be combined into a single budget item. Similar combinations for construction work can also be established. Regardless of how the combinations are established, phasing of associated work will be avoided.
2. (2) Priorities. Priorities will be indicated for the department and for the site/complex on each budget item submitted in the immediate program.
3. (3) Categories. Each item in the immediate program will be submitted in one (1) of the two (2) budget categories. Construction work and maintenance/repair work will not be combined in a single budget item.

4. (4) Construction. The construction category as used in chapter 2 of these regulations includes acquisition of real property, additions, alterations (including modifications for handicapped access), conversions, demolition, energy conservation work, rehabilitation, restoration, renovation, relocation, remodeling, site development and when appropriate, equipment purchase or replacement.

   1. (A) Equipment.

      1. 1. Purchase of original installed facility

equipment is construction. When capacity or capability is substantially increased, replacement of installed facility equipment is construction. Installed facility equipment includes those items of fixtures and equipment in the air conditioning, electrical, heating, plumbing or other building systems that are necessary for operation of the facility.

1. 2. Procurement of installed function

equipment may be submitted as a Capital Improvement and Maintenance Budget item only when that equipment is part of a construction project or when the installation requires construction, addition to or modification of utilities or environmental systems. Installed function equipment includes those items of fixed and/or heavy equipment (kitchen, laundry, printing, x-ray, welding, etc.) needed by the occupant(s) of a facility to perform required functions.

1. (B) Replacement. Replacement of an item, system or facility under the Capital Improvement and Maintenance Program for the purpose of improvement or increasing capability/capacity is defined as construction.

1. (5) Maintenance/Repair. Maintenance/repair work will conform to current codes or standards. Maintenance/repair, as used in chapter 2 of these regulations, includes the following:

   1. (A) Maintenance. Maintenance is the routine day-to-day, periodic or scheduled work necessary to preserve a facility in such condition that it may be effectively used for its intended purpose. This includes work required to prevent deterioration or damage and to sustain existing components or utility systems;
   2. (B) Repair. Repair is the work necessary to reestablish the condition of a damaged, deteriorated or worn facility or element at the Standard of Existing Construction, so that it may be effectively used for its designated purpose. Repair work does not include substantial alteration, conversion or increase of size/capacity, except as required to meet current codes and standards. Replacement of a damaged, deteriorated or worn item, system or facility for the purpose of reestablishing the original capacity/capability is defined as repair by replacement;
   3. (C) Operations Budget Items. Maintenance/repair work, such as preventive maintenance (lubrication, filter changes, inspections, refastening, etc.) and minor repairs (replace broken window glass, clearing sewers, spot road repairs, etc.), performed by 1 CSR 30-2

agency/site maintenance personnel or performed by maintenance contracts shall not be included in the Capital Improvement and Maintenance Program. These are operating responsibilities and will be included in the operation budget; and

1. (D) Maintenance/Repair of Facilities Not Owned by the State. At a site/complex where a long-term lease, license, permit or other control has been established or where execution of lease, license, permit or other control instrument requires maintenance by the state, maintenance/repair items may be considered in the Capital Improvement and Maintenance Budget. Such items require economic justification to assure a reasonable return on investment.

1. (6) Unprogrammed Requirements. Unprogrammed requirements are defined as unforeseen and unplanned items resulting from existing or developing conditions which may not be delayed until the next appropriation.

   1. (A) Submission. A separate budget item with a separate priority will be submitted under the maintenance/repair category for unprogrammed requirements. The amount of this item will be based on recent (3–5 years) experience. The basis for establishing the amount will be clearly stated. This item will include cost escalation as directed in the annual budget instructions.
   2. (B) Unprogrammed Requirements Fund. Appropriations for unprogrammed requirements will be available for new requirements only and will not be used to supplement other capital improvement and maintenance appropriations. Such funds will not be used to support an item as defined in an appropriation request, that has been specifically denied or eliminated by the legislature.

2. (7) Planning/Design Budget Items. These budget items provided for architect/engineer services, for master plans, feasibility or other studies, long range plans and project design.

   1. (A) Feasibility Studies. Funding requests for development of feasibility studies (as capital improvement and maintenance items) will be included in the construction category.
   2. (B) Master Plans. Funding requests for the development of master plans will be included in the construction category of the Capital Improvement and Maintenance Budget. The request for each site/complex will be a separate budget item with a separate priority.
   3. (C) Project Design. Normally, funding for project design will be requested as part of the budget item for the project. For projects estimated to cost in excess of one million, five hundred thousand dollars ($1,500,000), design or planning funds may be requested one (1) fiscal year prior to requesting funds for accomplishing the work. Justification data with request for early appropriation of design funding will include the justification for the project.

3. (8) Budget Request Justification. The detail of the justification must be commensurate with the scope and cost of the item or subitem. The justification will establish the need and the urgency of the request. Facts presented will clearly show that the item is essential to support current and future functions. Each justification element must be organized so as to be easily read and understood and the use of vague, indefinite or unnecessary technical terms will be avoided. Meaningful facts and figures must be provided, but statistics shall be limited to significant totals or trends. Repetition of statements or data in more than one (1) justification element is seldom productive.

   1. (A) Maintenance/Repair Items. For most maintenance/repair items, the justification will be a brief summary. While this must be concise, the following (as a minimum) will be addressed:

      1. 1. Define the deficiency or deficiencies;
      2. 2. Explain the effect of delaying the

item;

1. 3. Indicate the alternatives considered;

2. 4. When appropriate, indicate:

   1. A. Requirements of federal regula-

tions, funding or support programs;

1. B. Unusual circumstances;
2. C. Reasons for apparent inconsisten-

cies between various entries of the budget submission;

1. D. Relationship to prior and/or future

appropriation;

1. E. Requirements for improving quali-

ty or capacity; or

1. F. Environmental effects;
2. 5. When substantial cost is to be

incurred for repair, the economics of repairs versus replacement will be examined. Repair items, estimated to cost more than fifty percent (50%) of the cost for replacing that element or system will be supported with an analysis of cost and expected life for repairs versus replacement; and 6.When the estimated cost of repairs to an item, system or facility exceeds twentyfive percent (25%) of the replacement cost of the facility involved and exceeds five hundred thousand dollars ($500,000) (a major maintenance/repair project) the complete eleven (11)-paragraph supplemental justification, indicated under 1 CSR 30-2.040(8)(C), will be provided in addition to the summary justification.

1. (B) Construction Items. The summary justification indicated under “Maintenance/ Repair Item” will be provided for all construction items. For energy conservation projects, the estimated economic return will be added to the summary justification. For a new construction budget item estimated to cost more than one million dollars ($1,000,000) and for construction work on an existing facility with estimated cost exceeding twenty-five percent (25%) of the replacement cost of the facility involved and exceeding one million dollars ($1,000,000) (a major construction project), the complete eleven (11)-paragraph supplemental justification indicated under 1 CSR 30-2.040(8)(C) will be provided in addition to the summary justification.

2. (C) Supplemental Justification. The eleven (11)-paragraph justification when required in accordance with 1 CSR 30-2.040(8)(A)6. or (8)(B) will be provided in its entirety as indicated in the following. If a paragraph is not applicable, list the paragraph number and title with the notation “N.A.”

   1. 1. (Paragraph 1) Analysis of Deficiency.

Evaluate the facilities now being used. Describe the physical deficiencies and how they limit performance. Describe deficiencies identified (if any) as a result of the requirements of federal regulations and/or federally funded or supported programs and indicate the regulation(s) or supported program(s) involved. Describe the impact of delaying or eliminating this item. Be specific.

1. 2. (Paragraph 2) Consideration of

Alternative Facilities. Provide a list of the facilities that were considered in an effort to meet the requirement through existing assets. Indicate the extent of examination of these existing facilities, including those at another site/complex, which could be used to satisfy the requirements. Examination of existing facilities should include the cost for addition, alteration, rehabilitation or repair. When another site/complex or facility was considered and rejected, identify those considered and the reason for rejection.

1. 3. (Paragraph 3) Relationship to Other

Programs. If the item is directly related to other items in prior year budget programs, the current budget programs or future budget programs, show the relationship clearly. Explain the effect of delay or cancellation of this item or proposed future items.

1. 4. (Paragraph 4) Economic Consider-

ations/Savings. Cost savings in operational expense, economies in design and other cost savings will be identified when applicable. If reduction in operating expense is a primary element in the justification, an economic analysis will be provided.

1. 5. (Paragraph 5) Energy Requirements.

For maintenance/repair projects, state the present annual energy consumption for each type of energy (that is to say, electricity, natural gas, fuel oil, etc.) used at the site or facility affected and the estimated annual increase or decrease in energy consumption which will occur when the work is completed and explain any increases. Also describe any realistic alternative measures which can be taken to reduce consumption and the estimated cost of these measures. For construction projects, briefly describe the applicable types of heating and air conditioning systems, water supply and sewage disposal systems and the electrical distribution system and connected equipment. State the estimated annual energy consumption by type of energy for each system. Describe any realistic alternative types of systems or equipment for each system which could be used to reduce energy consumption and the estimated cost of each alternative.

1. 6. (Paragraph 6) Utility Support

Requirement/Changes. Provide information on related utility support. Projects which are programmed or under construction (for utility support of the proposed facility), if any, should be addressed. Compare available capacity of these projects and/or existing utility systems with requirements of the budget item being justified. If completion of the proposed budget item will require additional utility capacity, indicate planned work to provide the additional capacity. Indicate source of work of funding to support the work to provide the additional capacity.

1. 7. (Paragraph 7) Criteria for Proposed

Construction.

1. A. All major or new construction

requires data to support the proposed scope. State how size and capacity of the proposed facility are related to the overall requirement for the function. Define the workload in terms of permanent personnel, clients served, functions performed or other appropriate factors.

1. B. For air and water pollution abate-

ment projects provide the federal, state, regional or local standards upon which design is based.

1. C. For laboratory, research and other

technical facilities, list the specific functions which the facility will support. The function must be clearly explained in terms understandable by laymen.

1. D. State whether or not the require-

ment is derived from a new or expanded function, if so, identify nature and scope of new function and its relation to the budget item.

1. E. State any security requirements

that will affect the design of the facility.

1. F. Specific requirements established

by federal regulations and/or federally funded or supported programs must be spelled out and identified with the federal regulation and/or federally funded or supported program involved.

1. 8. (Paragraph 8) Disposal of Present

Facility Assets. If a new facility has been justified as a replacement for an existing facility, indicate proposed methods of disposal for the replaced facility. If a new facility has been justified as a replacement for an existing facility and the replaced facility is to be retained, a statement must be provided as to the specific intended use of the replaced facility.

1. 9. (Paragraph 9) Summary of Environ-

mental Considerations. An environmental assessment will be prepared for those items which may have significant environmental impact. An environmental impact is any foreseeable or predictable change (beneficial or adverse) on the quality of the human or natural environment. An environmental assessment is an informal review of the work on a project to determine whether or not there is potential for a significant impact on the natural environment. The assessment determines potential only and requires no review or approval. By contrast, an environmental impact statement is a detailed study of specific effects on specific environmental elements. The environmental impact statement must be reviewed and approved by appropriate state and federal agencies. Work on an existing facility which extends more than five feet (5') outside the facility, or which involves significant emissions or discharges from the facility, will be considered for an environmental assessment. All budget items for new or major construction, sewer and water systems or treatment plants, stream diversion or impoundment or paving will be considered for environmental assessments.

1. A. If the environmental assessment

determines that the work is likely to have a significant adverse impact on the quality of the human or natural environment, an environmental impact statement will be made and processed in accordance with current applicable state/federal regulations. Approval of the impact statement by the appropriate state/federal agencies will be required prior to requesting any appropriation (except planning) for work on that item.

1. B. If the environmental assessment

determines that the work is not likely to have a significant adverse impact on the quality of the human or natural environment, that fact will be indicated with one (1) of the following statements as appropriate:

1. (I) An environmental assessment

for this work has determined that there will be no significant adverse impact on the quality of the human or natural environment; and

1. (II) An environmental assessment

for this work has determined that there may be a minimal adverse environmental impact in the area(s) of cultural or historic sites, air, water, noise, solid waste, radiation or hazardous materials. Indicate only the applicable area(s) of impact and provide a brief explanation to include measures for reducing or eliminating the potential impact. If the impact is temporary, indicate that fact and the time period of the impact.

1. 10. (Paragraph 10) Provisions for the

Handicapped. Every facility should be designed to assure access for the physically handicapped, unless it can be positively stated that its function is such as to make it inappropriate or hazardous to provide such access. If provisions are not made for handicapped access, indicate the statute, regulation or other basis for this omission.

1. 11. (Paragraph 11) Program for Related

Furnishings and Equipment. The purpose of this paragraph is to direct attention to furnishings and equipment funded from some other appropriation and intended for installation in the proposed facility. Indicate the relationship between delivery schedules and the construction schedule and the effect of delay in equipment delivery or construction schedules.

1. (9) Exceptions. Exceptions to the requirements of this rule may be granted by the commissioner of administration or his designee upon presentation of satisfactory justification for such exceptions. The Coordinating Board for Higher Education is exempted from the requirements of 1 CSR 30-2.040(8)(C).
2. (10) This rule, to the extent practical, will be used to supplement Fiscal Year 1983 Budget Instructions. This rule becomes effective with the budget submission for Fiscal Year 1984.

AUTHORITY: sections 8.320, 8.360 and 33.220, RSMo 1986.* Original rule filed July 9, 1981, effective Feb. 15, 1982. Emergency amendment filed June 14, 1985, effective July 1, 1985, expired Oct. 29, 1985. Amended: Filed June 14, 1985, effective Aug. 26, 1985. *Original authority: 8.320 and 8.360, RSMo 1958, amended 1965 and 33.220, RSMo 1939, amended 1945, 1971. 1 CSR 30-2