53.1-82.2 - Method of reimbursement; involvement of the Treasury Board.
§ 53.1-82.2. Method of reimbursement; involvement of the Treasury Board.
A. Reimbursements by the Commonwealth to localities or regional jailauthorities for a portion of the capital costs of a jail project, madepursuant to §§ 53.1-80, 53.1-81, 53.1-82, or § 53.1-95.19 may be effected byone of the following methods:
1. In one lump sum payment to be made upon completion of the project, forminor renovation projects, or two equal lump sum payments, one such paymentto be made upon certification that the construction, enlargement orrenovation is fifty percent complete and the second such payment to be madeupon completion of the project, such payments to be paid by the StateTreasurer out of funds appropriated to the Department of Corrections;
2. Over a specified period of time through a contractual agreement enteredinto by the Treasury Board and approved by the Governor, on behalf of theCommonwealth, and the locality, localities or regional authority or othercombination of localities undertaking a jail project, such payments to bepaid by the State Treasurer out of funds appropriated to the Treasury Board;or
3. In one lump sum payment to be made upon completion of the project by theVirginia Public Building Authority pursuant to § 2.2-2263, including theCommonwealth's share of the interest costs expended by the locality orregional jail authority for financing such project during the period fromfifty percent completion of construction to final completion of construction.
B. The General Assembly shall have the sole authority to determine whetherreimbursement will be made pursuant to subdivision A 1, A 2, or A 3. TheDepartment of Planning and Budget, after consulting with the Treasury Board,shall evaluate all proposed jail projects and make recommendations to theGovernor regarding the method of reimbursement for inclusion in his biennialbudget.
C. Any contract for reimbursement over a specified period of time enteredinto pursuant to subdivision A 2 shall include the following:
1. The Commonwealth shall reimburse a portion of financing costs as providedin subsection E below;
2. The Commonwealth's reimbursement payments shall be subject toappropriation;
3. In the event that the jail project is financed through an issuance ofsecurities, the Commonwealth's reimbursement payments shall be calculatedusing the coupon interest rates received by the locality or jail authority atthe time the securities for the project are sold and shall be made pursuantto a schedule to be set forth in the contract;
4. In the event that a jail project is financed through an issuance ofsecurities, and coupon interest rates are not available due to the structureof the securities, the Treasury Board is authorized to make such adjustmentsas are necessary and reasonable to calculate the Commonwealth's payments;
5. In the event that the jail project is financed through a method other thanthe issuance of securities, the Commonwealth's payment shall include interestpayments based on an interest rate assumption equal to the prevailing AA ratefor tax-exempt bonds issued by the Commonwealth or agencies thereof, or theactual rate achieved, whichever is lower, and the schedule for theCommonwealth's reimbursement payments shall be set forth in the contract; and
6. Such other terms and conditions as are necessary to specify the structureof the Commonwealth's participation in project financing and as may berequired by guidelines established by the Treasury Board.
Reimbursement to localities pursuant to this section shall be availablewithout regard to the security level of the facility constructed, enlarged orrenovated, provided such facility satisfies applicable standards establishedby the Board pursuant to § 53.1-68.
D. For purposes of this article, "capital costs" includes, but is notlimited to, actual construction costs, costs of land acquisition, if the landpurchased is used exclusively for siting a jail facility, architectural andengineering fees, and fixed equipment. "Capital costs" does not includeadministrative costs nor a financial advisor's, an investment banker's, orattorneys' fees incurred by local governments or, except in the case ofminimum security facilities, loose equipment or furnishings.
E. For purposes of this article, "financing costs" means the total of allcosts incurred by the locality, localities or regional authority or othercombination of localities as are deemed reasonable and necessary by theTreasury Board to execute the financing of the Commonwealth's payment ofcapital costs and to fund such funds and accounts as the Treasury Boarddetermines to be reasonable and necessary.
(1993, cc. 387, 787; 1995, c. 305; 1996, c. 835.)