Cash Management Update SCDOT Commission Workshop. October 20, 2011

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Clifford Strickland
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1 Cash Management Update SCDOT Commission Workshop 1

2 Current Cash Status Cash balance as of Wednesday, Oct 19 was $70.8M Debt/SCTIB payments current Update on other payments SCEIS Implementation 2

3 Information Provided by: Office of Finance 3

4 Project and Resource Analysis Meeting (PRAM) Meeting once a week Team consists of key leaders of the Department in each division that deal with procurement, obligations and cash flow Inputs and assumptions 4

5 PRAM Major Payout Inputs Numerous inputs, but the major ones are: Construction Contracts Maintenance Program Procurement/Payroll Debt/SCTIB Consultant Contracts 5

6 PRAM Other Payout Inputs Other inputs include: DBE/Special Projects Outside Legal Overhead Payments to Other Entities Right of Way Scenic Byways Self Administered LPA s Signal Agreements SPR Transit Utilities/RR 6

7 PRAM Revenue Inputs Projected federal reimbursements Initial FY2012 obligation authority is $78M thru November 18 Projected state gas tax revenues Non-federal aid highway fund revenues Miscellaneous revenues 7

8 Importance of Timelines Project development timelines vary anywhere from 2 months to 7 or 8 years, or beyond. Payout timelines also vary throughout the life cycle of a project. One function of the PRAM group is to more effectively forecast the delicate balance of engineering planning with financial planning. 8

Project Development Timeline for a typical WIDENING project involving Right of Way Activity Duration LONG RANGE PLAN / APPR Ƥ Cumulative Duration 0 months 6 months 12 months ENVIRON- PROGRAM MENTAL

months HIGHWAY LETTING PROCESS 46-52 months * LETTING Preliminary Engineering Phase Approximately 10% of Total Project Cost Right of Way Phase Approximately 25% of Total Project Cost Letting 30 days

9 Project Development Timeline for a typical WIDENING project involving Right of Way Activity Duration LONG RANGE PLAN / APPR Ƥ Cumulative Duration 0 months 6 months 12 months ENVIRON- PROGRAM MENTAL TIP / STIP PROJECT DOCUMENT APPROVAL * Ƥ * Ƥ 0 months 6 months 18 months months 6 months FONSI ISSUED, PERMITTING, R/W FINAL PLANS, ACQUISITION COMPLETE * Ƥ months months PRAM 4 months HIGHWAY LETTING PROCESS months * LETTING Preliminary Engineering Phase Approximately 10% of Total Project Cost Right of Way Phase Approximately 25% of Total Project Cost Letting 30 days BID REVIEW / PROJECT AWARD 53 months 10 days APPROVAL OF CONTRACT EXECUTION * 54 months days CONTRACT EXECUTION / PRECON CONFERENCE 55 months days ANTICIPATED BEGIN CONSTRUCTION 56 months 40 days FIRST ESTIMATE SUBMITTED FOR PAYMENT months months COMPLETE CONSTRUCTION months Construction Phase Approximately 65% of Total Project Cost * Potential Commission Action Ƥ Formal Public Input Information Provided by: Office of Construction 9

Project Progress Estimate (Invoice) Approval Progress estimates are invoices used to pay contractors and represent the amount of work performed (quantities installed) during the estimate period.

10 Project Progress Estimate (Invoice) Approval Progress estimates are invoices used to pay contractors and represent the amount of work performed (quantities installed) during the estimate period. It is generated by the Resident Construction Engineer using Sitemanager (AASHTO Construction management software system). Estimate cut off-date GENERATE/VERIFY ESTIMATE 10 DAYS 45 DAYS (30 BUSINESS DAYS) Generate Estimate, receive contractor concurrence, contract deliverables (payroll, DBE, etc.) PROCESS ESTIMATE Cash Management review, Estimate processed by Accounting CHECK CUT OR DIRECT DEPOSITED UP TO 5 DAYS Processed by CG and cut check 60 total calendar days Information Provided by: Office of Construction 10

11 Construction Contracts in Force Total Highway Construc3on Projects: 242 Total Current Contract Amount Federal: $984,963, $1,329,059, State: $188,254, State: $188,254, Other: *Other: $155,841, $155,841, Total Value of Work PerformedFederal: $503,690, Federal: $503,690, $629,193, State: $ 88,050, $629,193, State: $ 88,050, Other: $ 37,452, *Other: $ 37,452, Total Remaining Contract Value Total Remaining $699,866, Contract Value $699,866, Federal: State: Federal: $100,204, $481,273, Other: State: *Other: $481,273, $118,389, $100,204, *Includes County Sales Tax & CTC projects as well as Local (City, County, etc) match for the Federal Match program and Enhancement program. $118,389, Information Provided by: Office of Construction 11

12 Expected Value of Work to be Completed (Active Construction Projects) Information Provided by: Office of Construction 12

13 Lettings - Past 2 Cycles September 13, 2011 Status AWARDED Total Award Value $19,403, (22) Pending approval of Contract Execu3on by Commission on Oct. 20 PROGRAM # of CONTRACTS FEDERAL STATE OTHER TOTAL AWARD AMOUNT September $ 11,691, $ 1,267, $ 6,444, $ 19,403, $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- FEDERAL STATE OTHER Information Provided by: Office of Construction 13

14 Lettings - Past 2 Cycles October 11, 2011 Status PENDING AWARD Total App. Low Bid Value $1,824, (6) Bid Review Underway PROGRAM # of CONTRACTS FEDERAL STATE OTHER TOTAL BID AMOUNT October $ 319, $ - $ 1,504, $ 1,824, $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- FEDERAL STATE OTHER Information Provided by: Office of Construction 14

15 Lettings - Next 3 Cycles November 8, 2011 Status ADVERTISED Total Es3mated Value $15,231, (15) Projects went out for adver3sement Monday, October 3, 2011 PROGRAM # of CONTRACTS FEDERAL STATE OTHER TOTAL BID AMOUNT November $ 13,360, $ - $ 1,870, $ - $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- FEDERAL STATE OTHER Information Provided by: Office of Construction 15

16 Lettings - Next 3 Cycles December 13, 2011 Status PENDING ADVERTISEMENT Total Es3mated Value $3,863, (7) PS&E Packages must be completed with Official Engineer s Es^mates by October 21 PROGRAM # of CONTRACTS FEDERAL STATE OTHER TOTAL BID AMOUNT December $ - $ - $ 3,863, $ - $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- FEDERAL STATE OTHER Information Provided by: Office of Construction 16

17 Lettings - Next 3 Cycles January 10, 2012 Status PENDING REVIEW/APPROVAL Review Underway Information Provided by: Office of Construction 17

18 Design Build Projects Bridge Pkg A: Status - ADVERTISED Bridge Pkg C: Status - PENDING ADVERTISEMENT Bridge Pkg D: Status - PENDING FHWA CONCURRENCE PROGRAM # of FEDERAL STATE OTHER DB TOTAL DESIGN/BUILD 3 $ 29,222, $ 7,305, $ - $ 35,782, $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- FEDERAL STATE OTHER ** State Participation is reallocation of SIB Multi- Project Loan ** Information Provided by: Office of Construction 18

19 Expected Value of Work to be Completed (Active and Future Construction Projects) Cash Management Update - Commission Workshop Information Provided by: Office of Construction 19

Maintenance Program Budget Item FFY Program Obligations State Funds 2012 State Program Estimated Payout Districts 1-7 $217,894,785 PIP Program* $66,022,003 Statewide $27,112,904 Secondary RPM Program

20 Maintenance Program Budget Item FFY Program Obligations State Funds 2012 State Program Estimated Payout Districts 1-7 $217,894,785 PIP Program* $66,022,003 Statewide $27,112,904 Secondary RPM Program $1,500,000 Total $312,529,692 District revised amounts reflect deferment of contract maintenance projects *Includes $22,674,000 of new projects and payout for previously let projects Information Provided by: Office of Maintenance 20

21 Procurement/Payroll Purchase orders (P.O.s) in force - $42.7M Purchase orders are written to primarily support the maintenance and general activities of the Department. Maintenance supplies aggregate, concrete pipe, auto repair parts & supplies, roadside sweeping, tree trimming, catch basin repairs Equipment purchases, IT purchases, software, copier rentals, etc. Payroll is paid twice a month with an average of $8.9M, including employer portion of contribution Information Provided by: Office of Finance 21

22 Payroll June 2007 June 2008 #FTE Payroll % change #FTE Payroll % change Execu3ve/General Administra3on ,231, ,671, % Engineers 1,342 65,813,398 1,428 70,778, % Craf & Trades 2,876 79,884,109 2,952 83,090, % 4, ,929,277 5, ,540,596 June 2009 June 2010 #FTE Payroll % change #FTE Payroll % change Execu3ve/General Administra3on ,760, % ,022, % Engineers 1,448 72,602, % 1,445 73,052, % Craf & Trades 2,880 81,301, % 2,798 79,055, % 5, ,664,288 5, ,129,937 June 2011 #FTE Payroll % change Execu3ve/General Administra3on ,312, % Engineers 1,445 69,824, % Craf & Trades 2,535 72,172, % 4, ,310,356 Information Provided by: Office of Finance 22

23 Professional Services Contracts in Force Total Ac3ve Projects: 265 Total Current Contract Amount $313,641, $1,329,059, Federal: $250,913, $984,963, State: $ 62,728, State: $188,254, *Other: $155,841, Total Value of Work PerformedFederal: $141,518, Federal: $503,690, $174,898, State: $ 35,379, $629,193, State: $ 88,050, *Other: $ 37,452, Total Remaining Contract Value Federal: $109,394, Total Remaining $136,743, Contract Value State: Federal: $ 27,348, $481,273, $699,866, State: $100,204, Estimated Monthly Payouts of Remaining Contract Value are $5.1M *Other: $118,389, Information Provided by: Office of Contract Services 23

24 Information Provided by: Office of Finance 24

25 Revenue Enhancement Efforts Partnering with FHWA to examine additional reimbursable projects Soft match on state road non-federal aid reimbursable bridges Estimated $4M this year Already approved Reimbursement Rate for Indirect Expenses (OH/GA) Advanced billing of debt payments annually 25

26 Conclusion PRAM intended to enhance communication between those managing cash and those managing current and future obligation(s) Need: To carefully manage state cash To maintain an average cash balance at a safe level ($75M) To secure passage of H

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