CR1 & CR2 07/08/08 OSFC SMPA Webinar

CAPITAL Renewal for Ohio Districts All budgets for real or theoretical major component, system, or facility replacement

The Fundamental purpose of CR1 and CR2 Create budget models with data definitions that more closely mirror the district’s common budget taxonomy Between renovations or new construction events – P.I.F. or plant improvement fund (CR1) Renovation or new construction events are supported empirically with long-term theortically reserve funding data (CR2)

The Old CR; capital renewal Anything beyond Planned Maintenance Included long-term non-renewable asset depreciation Included shorter cycle system and component renewable values Overstated the realistic fundable value for CR Was not comparable to any Ohio District account line item, code or budgeting practice

2007 CR1 & cr2 Cost Set Business Rules Allocation based on specific national reference Asset cost threshold of $ 500 minimum for capital cost consideration Long life components (CR2) (lifespan > 20) funded via voter initiative Discretionary component renewal (wall/ceiling replacement) funded via district administration (CR1) Level III preventive maintenance operational costs replace some older CR cost allocations Level III preventive maintenance and CR1 and/or CR2 is required for this asset Continuous components (walls, flooring, ceilings, building controls) are based on building square footage

Level III Preventive Maintenance Long cycle PM with high costs and invasive component repair or overhaul – Not Replacement Cycle time 1 year < PMIII < 5 years

CR1 Defined CR1 is defined as assets that is replaced within long-life or renovation events. They are considered eligible for PIF - plant improvement fund Typical cycle is from 5 years < CR1 <15 years Cost more than $ 500 per event Are not included in the annual O&M budget Represent actual capital events that must be planned and funded in between renovations or facility replacement

CR2 Defined CR2 is defined as long-term, long-life asset depreciation schedule financial data; "Accumulated Depreciation." Typical cycle is greater than 15 years Represents a budgetary number that is a “guide” for accumulated asset loss or depreciation for bond issuance planning for major capital events.