STATE BUILDING AUTHORITY RESOLUTIONS S.C.R. 59 & 61: COMMITTEE SUMMARY




Senate Concurrent Resolutions 59 & 61 (as introduced 11-14-06)
Sponsor: Senator Shirley Johnson
Committee: Appropriations


Date Completed: 11-28-06

CONTENT
Senate Concurrent Resolutions 59 and 61 would convey property and establish a lease agreement between the State, the State Building Authority (SBA), and Glen Oaks Community College and Northwestern Michigan College for two construction projects. Approval of the resolutions would enable the SBA to issue bonds to finance the State's share of construction costs.


The projects have met all of the planning approval requirements of the Joint Capital Outlay Subcommittee and the Management and Budget Act. Approval of the resolutions would create a contractual obligation between the State and the SBA, requiring the State to make annual rental payments to the SBA. The SBA would use the rental payments to pay off the bonds sold to finance construction. Once the debt obligations were satisfied, the SBA would transfer title back to the schools.

FISCAL IMPACT
The projects represent new bond debt obligations by the SBA of $2.3 million. Annual rental payments to the SBA are estimated at $150,000 to $196,000 until the bonds are retired (approximately 15 to 17 years). Annual rental (debt service) payments to the SBA appropriated in the FY 2006-07 General Government Appropriation Bill total $237.8 million.



SCR		  
Project		  
Total Cost		 State
Share		 Institution Share Rental Range
59 Glen Oaks Community College: Science Addition/Allied Health Renovation Project. $3,200,000 $1,600,000 $1,600,000 $107,000 to $139,000
61 Northwestern Michigan College: Oleson Center Renovations. $1,300,000 $650,000 $650,000 $43,000
to $57,000
   


TOTALS:		  

$4,500,000 		 

$2,250,000 		 

$2,250,000 		$150,000 to $196,000
Fiscal Analyst: Bill Bowerman

Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. 59/0506