1. CR1 & CR2
07/08/08
OSFC SMPA Webinar

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

3. 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)

4. 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

5. 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

6. 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

7. 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

8. 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.