OASAS Requirements Governing Financial Support of Provider Capital Projects

Date Issued: October 18, 2019
RECIPIENT
  • All Providers of Funded Chemical Dependence Services
  • Local Governmental Units (LGUs)

PURPOSE

The purpose of this Bulletin is to describe the statutory and operational requirements for Funded Chemical Dependence Services Providers seeking OASAS' assistance in financing and managing capital expenditures associated with minor and major maintenance, rehabilitation and construction of facilities used for the provision of chemical dependence services. This Bulletin incorporates the content of and supersedes Local Services Bulletin 2014-20.

 

APPLICABILITY

The processes described in this Bulletin pertain to any construction activity, funded by OASAS, which meets the legal definition of capital expenditures as indicated under DEFINITIONS in this Bulletin.

In addition, they apply to the following, if the service provider is requesting OASAS funding for that activity:

  • any proposed construction, reconstruction, rehabilitation, improvement or repair of any physical facility, if the proposed action will extend the useful life of the affected asset for at least one (1) year AND has a cost exceeding $500; or

  • the repair, maintenance and replacement of furnishings and fixed immovable equipment which have a useful life of at least one (1) year, or is expected to add to the useful life of the asset AND has a cost exceeding $500.

However, these processes do not apply to any expense identified in the preceding paragraph which is determined by OASAS to be an operating expense to be paid from a maintenance item in an operational budget previously approved by OASAS.


DEFINITIONS

Classification of Projects

Capital projects are classified into two major categories:

  • Minor Maintenance Projects are those capital projects that restore to all appropriate standards the fixed equipment and/or physical plant of facilities where certified services are provided, through actions of a non-recurring nature beyond ordinary repairs, the estimated cost of which is less than $100,000.

  • Major Capital Projects which are further broken down as follows in relation to the OASAS Certification process:

    • Rehabilitation projects are non-minor maintenance projects to preserve or increase existing space or to obtain and improve space where services are to be relocated and the estimated cost is $500,000 or less.
    • Major Construction projects are capital projects to create, preserve, increase, expand or improve facilities, or to obtain and improve space to which services are to be relocated and the estimated costs are over $500,000.
      • Any capital project exceeding $l00,000 requires that the provider submit a Schedule C and a State Aid Grant lien for an appropriate period on the improved property. (See Exhibit A for requirements placed on the provider by the lien.)

Legal Definitions of Capital Cost

A capital cost is defined in Mental Hygiene Law as follows:

Section 25.01(4) states that capital costs “the costs of a program operated by a local governmental unit or a voluntary agency with respect to the acquisition of real property estates, interests, and cooperative interests in realty, their design, construction, reconstruction, rehabilitation and improvement, original furnishings and equipment, site development, and appurtenances of a facility.”

Section 41.03(8) states that a capital cost " . . . mean the cost of a local government, voluntary agency, or the facilities development corporation with respect to the acquisition of real property estates, interests and cooperative interests in realty, their design, construction, reconstruction, rehabilitation and improvement, original furnishings and equipment, site development, and appurtenances of a local facility. Capital costs do not include any of the foregoing costs paid under provisions of law other than this chapter."

NOTE: The statutory authority previously vested in the Facilities Development Corporation now is assigned to the Dormitory Authority of the State of New York (DASNY).

Capital Project Management Services

Defined and described in subsequent sections of this Bulletin are the types of assistance rendered by OASAS (either directly or through consultants contracted via DASNY) in the management of approved service provider capital projects.

  • Feasibility studies involve the inspection and assessment of the condition of real property in the context of service needs and capacity, the development of the scope of rehabilitation work to be done, the development of cost estimates for requests to the State Division of the Budget (DOB), assistance to service provider management in providing practical alternatives and in arranging the layout of space, as applicable, and the completion of environmental assessments, as needed.

  • Technical services involve the preparation and/or review of architectural and construction activity and documents, in support of OASAS' direct project management activity including, but not limited to:

    • design review - detailed review of the design plans (all phases), submitted by local service providers and their consultants, for conformity to building codes, OASAS regulations, and budget constraints, including, especially, the review of construction documents prior to authorizing the service provider to direct the architect to solicit bids for the capital project.
    • bidding assistance - assistance to the service provider and the project architect in: preparing bid packages, advertising for the soliciting of potential qualified bidders, soliciting bids, informing bidders regarding the project, reviewing bids, assisting in selecting the best bid proposal within budgetary limits, and assisting in the negotiation of the construction contract.
    • construction monitoring - frequent and regular observation and inspection of construction in progress by qualified persons, attendance at job meetings to determine whether construction is being completed in accordance with applicable building codes, OASAS regulations, budget constraints, agreed upon schedules, and approved plans and specifications; review and recommendations for action on proposed change orders; and reporting of findings to the provider and the OASAS project manager.
    • miscellaneous services - provision of other forms of specialized technical services, such as rent studies and appraisals, and studies of the compatibility of proposed capital expenditures with sanitary and building code requirements.

The term basic project management services ("basic services") means managing a capital project to successful and timely completion on behalf of the service provider and OASAS through design review services, bidding assistance, and construction monitoring, as defined in the preceding paragraph.

Basic services may also include rendering assistance to the provider in:

  • selecting, directing and supervising design consultants;

  • dealing with construction contractors;

  • using OASAS and/or DASNY forms and documentation standards throughout the project;

  • determining the completion of construction and the acceptability of the completed construction;

  • reporting progress on the project, on a regular and frequent basis, to the service provider and various OASAS units; and

  • review of contractor requisitions and provider Claim for Payments for appropriateness of payment.

Generally, after DOB approval of the project has been obtained, OASAS will execute a capital contract with the service provider; in turn, the provider will execute a contract directly with an architect, other consultants and the general contractor. If DASNY services are to be used, OASAS will engage with DASNY directly. These choices will be made by OASAS on a project by project basis.

MINOR MAINTENANCE PROJECT SELECTION AND MANAGEMENT PROCESS

Minor maintenance projects are overseen by the Capital Management Bureau (CMB) but implemented by the service provider. At OASAS’ discretion, DASNY services may be engaged to review, monitor, inspect and approve scope(s) of work and payments.

Emergency Minor Maintenance

Providers must complete a Service Provider Minor Maintenance Funding Request (PAS-34) (Exhibit B), obtain bids in accordance with the Administrative and Fiscal Guidelines for OASAS-Funded Providers and submit it to the OASAS Regional Office. The Regional Office will review the request and forward as appropriate to the Statewide Director or his/her designee for approval.

  • If operating funds are available and appropriate, the Regional Office will arrange to make these funds available via a budget modification so that the provider is able to complete the required work. Service providers receive payment and report expenditures in accordance with existing State Aid procedures.

  • If operating funds are not available or appropriate, the Regional Office recommends use of capital funding from the minor maintenance allocation, contingent on sufficient availability. If the request is approved by the Statewide Director or his/her designee, the request is sent to the CMB. CMB will execute a capital contract with the provider to fund the work to be done. When OASAS sends the contract package to the provider, it will contain information and instructions on how to request payment for the work done.

Routine Minor Maintenance

Providers are advised to identify non-emergency minor maintenance projects continuously throughout the year and, if appropriate, complete and submit a PAS-34 funding request to the OASAS Regional Office. All requests for minor maintenance projects will require a minimum of three equivalents (in terms of the scope of work) bids for each contractor deemed necessary to complete the project in accordance with the Administrative and Fiscal Guidelines for OASAS-Funded Providers.

For each minor maintenance project recommended by the applicable OASAS Regional Office and approved by the Statewide Director or his/her designee, CMB will review the minor maintenance project and make recommendation to the OASAS contract unit to process and execute a capital contract with the provider to finance the work to be done. When OASAS sends the contract package to the provider, it will contain information and instructions on how to request payment for the work done. Service providers are to submit any expenditure reporting and Claim for Payments packages requesting payment for work done to the OASAS Capital Management Bureau at [email protected] as a PDF attachment.

For both emergency and routine minor maintenance projects, the provider may request CMB assistance in further defining the work to be done and selecting, following competitive bidding, a capable cost-efficient contractor to complete the work.

MAJOR CAPITAL PROJECT SELECTION PROCESS

Preliminary Project Review and Approval

At least annually, each service provider assesses its capital facility needs in relation to its plan of services and the condition of its physical plant. Those needs, once identified, are proposed in its Local Plan on Schedule Cs and submitted through the LGU, where applicable, to OASAS.

OASAS Regional Offices review each provider's Schedule Cs. Upon approval of the submission by the Statewide Director, the request is sent to the CMB. The CMB then proceeds with the required project development activity preceding a request for DOB approval. At this time, if they have not as yet done so, providers are also reminded of the necessity of submitting a certification application, if required. Service providers may request assistance in the completion of the certification application by contacting the appropriate OASAS Regional Office.

Project Development

CMB will work with the provider in conducting any required feasibility studies, engineering studies, environmental studies, and appraisals of property for use in requesting approval for the State Division of the Budget.

MAJOR CAPITAL PROJECT APPROVAL PROCESS

Following preliminary completion of project development activities, the CMB will develop a Prior Project Approval (PPA) for submittal to the DOB. Upon receipt of DOB approval, OASAS will execute a capital contract with the provider to finance the work to be done.

NOTE: If the project requires the approval of a certification application, the CMB will not process a capital contract until the certification application has been submitted to the Bureau of Certification.

When OASAS sends the contract package to the provider, it will contain information and instructions on how to process the contract and prepare for the contract closing with OASAS.

MAJOR CAPITAL PROJECT MANAGEMENT PROCESS

As the capital contract is being developed and executed, OASAS will assign a project manager to contact the provider and begin to render appropriate assistance in completing the project.

If DASNY provides construction service supervision, DASNY will review contractor and architect payment requisitions, prior to approving payment to ensure they are consistent with the progress achieved on the project as a result of monitoring by the DASNY project manager. Otherwise, the provider has responsibility for managing the project, subject to OASAS CMB project management review, approval and supervision.

For all projects, the provider submits to OASAS a State of New York Claim For Payment (AC3253-S) package (See Exhibit C) consisting of a Claim for Payment and/or Expenditure Report Transmittal Letter, a State of New York Claim For Payment (AC3253-S), and a Capital Project Expenditure Report (PAS 35)  Revised 12/18, accompanied by other supporting documentation (such as bank statements, invoices and canceled checks). The contract executed with OASAS contains the procedure for submitting advance payment and reimbursement Claim for Payments and expenditure reporting. In all cases involving a DASNY project manager, he/she has the responsibility for reviewing and approving all expenditures for work completed. OASAS will not process Claim for Payment packages without DASNY project manager approval of back-up documentation.
 

SOURCE(S) OF ADDITIONAL INFORMATION

If there are any questions regarding the content of this Bulletin, please contact the OASAS Capital Management Bureau at (518) 457-2545.

 

EXHIBITS

Exhibit A - State Aid Grant Lien

Exhibit B - Services Provider Minor Maintenance Funding Request (PAS-34) 

Exhibit C - Sample Claim for Payment and/or Expenditure Report Package