Definitions of Capital Construction Projects
06/19/2009
Reference Guide #A.1
There are many considerations that may lead a board of education to determine that capital construction is needed. It may be to provide new facilities for increasing student enrollments, or it may be to modernize and improve existing facilities. Differing reasons may dictate differing kinds of construction projects as defined below.
New Construction
New construction includes the construction of new school buildings (erection) and additions (enlargements) to existing school buildings.
Acquisition
Acquisition means the same as purchase.
Repair
Repair, as used in Education Law, Section 408 refers specifically to the requirement that plans and specifications for major repairs which affect the health and safety of occupants must be approved by the Commissioner. Other repairs are occasional work of a recurring nature that is intended to restore to a satisfactory condition that has decayed, deteriorated, weathered, or become broken, torn, or otherwise inoperable. Maintenance is recurring work that is intended to promote the upkeep of a property in properly operating condition. Repairs and maintenance are not eligible for building aid.
Alterations
Alterations are construction within an existing building that results in a change in educational space or uses; reconstruction work done in connection with an addition; and site development work. For the discussion of building aid, an alteration may be considered a reconstruction project.
Reconstruction
Reconstruction includes the replacement and/or remodeling of an existing school building. The term reconstruction is synonymous with the term capital improvement(sometimes written only as "improvement") and means to rebuild, to renovate, to remodel, i.e., to construct again. Essentially, reconstruction embodies all of the terms defined below and includes all types of work other than new buildings or additions.
Capital Improvement
Capital improvement is defined in part by the Local Finance Law as any physical public betterment or improvement. An improvement means a valuable addition to an existing building; an addition in the sense of an enhancement, not a structural addition. An improvement is permanent and is intended to increase a building's value, beauty, or utility, or adapt the building for a new or further purpose. As such, an improvement must do more than merely replace or restore to its original condition.
Remodeling
Remodeling is defined as work performed to alter, modernize, renovate, or otherwise change a building over in a different way.
Replacement
Replacement refers to the replacement and/or installation of components of a building that prolong the life and/or increase the value of the building.
Examples: Replacement of a roof, windows, walls, etc., or an element of the mechanical systems such as a boiler, temperature controls, water distribution, toilet fixtures, or electrical service.
Emergency Repairs/Recovery Work
Key elements of the definition of a public emergency are that emergency results from an unforeseen occurrence, and that it requires immediate corrective actions, but only in the form of emergency repairs. Mitigation measures to correct an emergency are needed immediately and are temporary in nature. They are not capital construction in the usual sense and do not require the approval of the Commissioner. Costs associated with the mitigation activities are ordinary contingent expenses. An emergency ends upon completion of the mitigation activities. Next comes the recovery period which may, and probably will, involve capital construction. Any capital construction associated with the recovery must be properly planned, developed, authorized, and advanced as any other capital construction project. As with any capital construction project affecting health and safety, approval of plans and specifications for the recovery project and issuance of a building permit by the Commissioner is required before construction starts.
Construction Costs
Certain costs for construction and/or reconstruction work which is approved pursuant to Section 408 of the Education Law, are eligible for building aid pursuant to Section 3602, subdivision 6. To be eligible for aid, construction costs must exceed $10,000, and the various elements of the work must have received prior approval and a building permit from the Commissioner.
Incidental Costs
In addition, to aid with construction costs, certain expenditures for site purchase, grading or improvement of the site, original furnishings, equipment, machinery, or apparatus, or professional fees (design and legal) and other incidental costs (such as insurance during construction and general administrative costs) are eligible for aid. Building aid may also be available for accounting, tabulation, or computer equipment and the areas for housing such equipment when requested in accordance with Section 155.2(a) 1. vi of the Commissioner's Regulations.