Administrative Policies - Policy 0033

State of Vermont
Agency of Administration
Department of Buildings & General Services

Policy 0033

Title: State Resource Management Revolving Fund
Date of Issue: July 1, 2004
Supersedes: Initial Policy

PURPOSE

This Bulletin promulgates the policies and procedures governing the State Resource Management Revolving Fund.

BACKGROUND

The 2004 session of the general assembly amended the statutes to establish a State Resource Management Fund to be administered by the Commissioner of Buildings and General Services. This fund is to be used for financing resource conservation measures under criteria for project selection established by the Commissioner of Buildings and General Services that will generate a life cycle cost benefit to the State. Resource conservation measures include but are not limited to equipment replacement, studies, weatherization, and the construction of improvements affecting the use of energy resources. Cost of the conservation measures will be repaid to the fund according to schedules established by the Commissioner of Buildings and General Services with the concurrence of the Commissioner of Finance and Management (Sec 168(b) of Title 29 of the Vermont Statutes Annotated).

POLICY

The following will govern the use of the State Resource Management Revolving Fund:

1. The minimum cost of a conservation measure financed will be $5,000. Exceptions will be considered in the case of small organizations where this minimum represents a significant portion of the operating expense. Individual measures may be lumped together to achieve the minimum.
2. Repayment schedules will include administrative costs of .5% of the outstanding balance, not to exceed $100 per year. Buy-out of existing arrangements and performance contracts will be considered on a case by case basis.
3. Requests for financing from this fund can either be initiated by the agency/department having jurisdiction over the facility (BGS; AOT; ANR; Military; DET) or by the Department of Buildings and General Services on behalf of another owner. If BGS requests funds on behalf of another owner, that owner must agree with the obligation of their funds to repay the fund. In no event shall any project be approved without the specific approval of the Commissioner of Buildings and General Services.
4. Standard purchasing and contracting procedures shall apply.
5. The fund will be used to finance energy resource conservation measures. Funds budgeted for energy conservation will not be transferred to other expenditure line items in order to use the State Resource Management Revolving Fund. The fund will not be used to replace or circumvent the annual budgeting process of either the Appropriations Act (Big Bill) or the Capital Bill. All requests to finance resource conservation measures through this fund will require an explanation as to why it was/will not be included in the department.s budget request of either bill.
6. Any funds currently budgeted for the resource conservation measure in question will be transferred to the State Resources Management Revolving Fund and credit shall be given for the project in question.
7. Agencies or departments receiving funding shall repay the fund through their regular operating budgets according to a schedule established by the Commissioner of Buildings and General Services. The length of the repayment period may vary, depending upon the department and/or conservation measure. Generally, all anticipated savings from the initiative will be applied to repayment of the State Resources Management Fund until debt has been fully paid.
8. Any past due balances must be paid before new initiatives will be considered. A past due situation exists when there is a prior year receivable.
9. Departments are expected to discharge their debt to the State Resource Management Revolving Fund. Overdue obligations to the fund will be brought to the attention of the Secretary of Administration. Insufficiency of appropriations may only be determined by the Secretary of Administration.
10. Agencies and departments are responsible for making repayment to the fund in accordance with the agreed upon repayment schedule regardless of the actual cost savings of the initiative.
11. Equipment and/or improvements will not be insured through the State Resource Management Revolving Fund. Should insurance be required beyond the limits of the existing state policies, the using agency will be responsible for such insurance. Should equipment or improvements be destroyed or otherwise lost, agencies will remain liable for reimbursing the State Resource Management Revolving Fund according to the repayment schedule.
12. Federally funded programs may utilize the State Resource Management Revolving Fund if such use is not prohibited by federal regulations.
13. Agencies will remain liable for costs incurred by the State Resource Management Revolving Fund on resource conservation measures specified by the agency and then rejected upon delivery or otherwise cancelled.
14. The Commissioner of Buildings and General Services shall maintain accurate and complete records of all receipts by and expenditures from the State Resource Management Revolving Fund and shall report to the General Assembly on January 15 of each year regarding projects approved through the fund, the status of the fund, and a consolidated amortization schedule.

PROCEDURES

1. On or about September 1 of each year, the Commissioner of Buildings and General Services and the Commissioner of Finance and Management will jointly recommend to the Secretary of Administration the overall fund cap on the State Resource Management Revolving Fund and what the annual fund cap should be on total resource management fund initiatives for the current fiscal year. Said recommendations shall be made after consultation with the State Treasurer.
2. Agencies and Departments wishing to use the State Resource Management Revolving Fund outlined above shall forward requests to the Commissioner of Buildings and General Services including but not limited to the following:
   
   1. Complete description of the resource conservation initiative.
   2. Cost of the resource conservation initiative.
   3. Cost to the State if not approved.
   4. Life cycle cost benefit to the State.
   5. Availability of alternative funding sources.
   6. Requested payback schedule.
   7. Quantify energy savings (kwh, gals., etc.)
3. Upon receipt, the Commissioner of Buildings and General Services will log the request and commence his review in accordance with his policy setting criteria and priorities for project selection. Should a proposal or, a combination of proposals, exceed the annual fund cap, the Commissioner.s review will address the urgency of need and he will make a recommendation to the Commissioner of Finance and Management on whether or not the annual cap should be exceeded.
4. When approved, the Commissioner of Buildings and General Services shall establish a repayment schedule generally not to exceed the anticipated payback period assuming the application of 100% of the anticipated savings toward reduction of the principle advanced for the initiative. The Commissioner reserves the right to grant exceptions in extreme cases. The application will be forwarded to the Commissioner of Finance and Management for concurrence. Buildings and General Services will retain the completed original request. A copy of the completed approved request will be returned to the requesting agency/department for their records.
5. The requesting agency/department will initiate the approved resource conservation measure through normal purchasing and contracting channels. When the measure is delivered or progress payments are due, all the appropriate documentation needed to pay the vendor will be presented to the Buildings and General Services Department Financial Services Division for payment. The user agency/department will immediately transfer any currently available funds to the State Resource Management Revolving Fund. Generally, repayment schedules shall consist of a single transfer annually. It is the responsibility of the user agency/department to ensure that their repayments are timely.
6. Upon delivery and acceptance of the resource conservation measure by the requesting agency or department, the product becomes the property of that agency or department. Agencies and departments must comply with the provisions of Administrative Procedure #1 when their respective conservation measures meet the definition of an asset as described in Agency of Administration Procedure #1.

Department Approval:  Thomas W. Torti, Commissioner