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Information Regarding Bond Funded Infrastructure Projects

The Pooled Money Investment Board (PMIB), on December 17, 2008, froze all disbursements from the Pooled Money Investment Account (Account) because of the poor cash position in the Account. This Account has been historically used to provide interim funding for all bond funded projects (general obligation and lease revenue) until the State Treasurer's Office (STO) is able to schedule bond sales. This "freeze" affected approximately 5,700 projects across the state. In the weeks that followed this action, the Department of Finance (Finance) authorized 276 projects to continue and the remaining 5,400 projects were directed to be shut-down unless other non-state funding sources were available to enable them to continue.

The passage of the Budget in February 2009 allowed the STO to re-enter the bond market and start issuing bonds. However, the Account, while slightly improved still remained in a weak cash position and was unable to provide all the necessary funding for the exempt and shut-down projects to re-start as well as provide the necessary source of cash borrowing for the state's regular day-to-day operations. Therefore, the PMIB has continued the freeze on disbursements, with limited exceptions, as described below.

Over the last couple of months, the STO has been able to help many projects with private placement of General Obligation bonds, one bond General Obligation bond sale in March and another in April, and two sales of Public Works Board bonds in April.

April 2009 GO Bond Sale

The following non-exempt projects were affected by the December 2008 funding freeze. The non-exempt projects are authorized to restart and funding will be provided consistent with project contracts, grant criteria, and / or additional agency / Board approvals as necessary. This is a preliminary list as Counsel, State Treasurer's Office, and agencies are still completing tax certificates and determining project funding eligibility consistent with the Build America Bond Act. These spreadsheets will be updated as needed to reflect the status of bond funded projects:

  • Education (.xls, <1 MB): Includes project detail on K-12, UC, CSU, and Community Colleges.
  • Housing (.xls, <1 MB): Includes detail on Housing and Community Development, CA Housing Finance Authority, and CA Pollution Control Finance Authority projects.
  • All Other Projects (.xls, <5 MB): Includes detail on transportation, Controller's Office, CalEMA, DGS, CalFIRE, Department of Water Resources, Parks, State Library, Public Health, Conservation, Water Resources Control Board, Air Resources Board, Health Facilities Financing Authority, and various natural resource agency projects.

Projects Receiving Funding Prior to the April 2009 GO Bond Sale

Non-Exempt Projects Still Requiring Funds

Chronology of Events

December 4, 2009

The State Public Works Board issued $743 million in lease revenue bonds to fund eleven infrastructure projects for various state agencies. The proceeds from the sale of these bonds will be used to pay down approximately $96.8million in AB 55 loan disbursements and provide funding necessary to complete the projects.
November 4, 2009

The State sold $2.2 billion in General Obligation bonds. All of which was used to refund outstanding state general obligation commercial paper notes and to fund various General Obligation bond projects such as roads, schools, flood control, water, environmental, stem cell research, and affordable housing.

October 29, 2009 The State Public Works Board issued $805 million in lease revenue bonds to fund twelve infrastructure projects for various state agencies. The proceeds from the sale of these bonds will be used to pay down approximately $618.1 million in AB 55 loan disbursements and provide funding necessary to complete the projects.
October 8, 2009 The State sold $4.1 billion in General Obligation bonds. Approximately $282.9 million of the bond proceeds were used to repay outstanding AB 55 loans, while the remainder was used to fund various General Obligation bond projects such as roads, schools, flood control, water, environmental, stem cell research, high-speed rail, and affordable housing.
April 30, 2009 The State Public Works Board issued $213 million in lease revenue bonds to fund two infrastructure projects for the University of California. The proceeds from the sale of this bond sale will be used to pay down approximately $149 million in AB 55 loan disbursements and provide funding necessary to complete the projects.
April 22, 2009

The State sold $6.9 billion in General Obligation bonds. Approximately $1 billion of the bond proceeds were used to repay outstanding AB 55 loans, while the remainder was used to fund various General Obligation bond projects such as roads, schools, flood control, water, environmental, stem cell research, high-speed rail, and affordable housing.

In response to this bond sale, the Finance issued Budget Letter 09-15 to provide instructions to departments and agencies regarding the expenditure of the April 22, 2009 bond sale proceeds.

April 15, 2009

The State Public Works Board issued $435 million in lease revenue bonds to fund four state infrastructure projects. This bond sale provided funds for three projects that were previously suspended as a result of the AB 55 loan freeze. Additionally, the proceeds from this bond sale will be used to pay down approximately $250 million in AB 55 loan disbursements and provide funding necessary to complete the projects.

The Pooled Money Investment Board met and continued the AB 55 loan freeze.

April 6, 2009

The Pooled Money Investment Board continued the AB 55 loan freeze.

April 2, 2009

The state sold $6.54 billion in General Obligation bonds. The first $3.87 billion of bond proceeds were used to repay outstanding AB 55 loans. The remaining $2.67 billion of proceeds were used to provide direct financing to fund tax exempt General Obligation bond projects. Finance recommended allocation of the $2.67 billion as follows:

  1. approximately $1 billion for projects exempt from Finance's stop-work order imposed due to the freeze of AB 55 loans;
  2. $988 million for payments of amounts owed for past obligations that had been incurred but not paid; and
  3. $688 million to start or re-start certain critical transportation, flood control and water management projects.

In response to this bond sale, the Finance issued Budget Letter 09-09 which delineates how the proceeds of the bond sale were distributed.

April 1, 2009

STO issued $132.89 million in General Obligation bonds through a private placement sale with the Los Angeles County Metropolitan Transportation Authority. The proceeds from the sale were used to directly fund 23 Proposition 1B transportation projects in Los Angeles County that were halted or delayed by the AB 55 loan freeze.

March 27, 2009

The Governor, on March 27, 2009, signed into law AB3X 20. This bill authorizes $310 million of American Recovery and Reinvestment Act (ARRA) funds for transportation to be temporarily loaned to Caltrans to advance Proposition 1B projects that meet certain requirements. To date, 4 transportation projects have been funded from the ARRA funds.

March 18, 2009

The Pooled Money Investment Board continued the freeze of AB 55 loan disbursements from the PMIA except for: (1) the remaining amount of the $650 million that was authorized at the January 16, 2009 Board meeting; and (2) $500 million of additional funds to be released upon the successful sale of at least $4 billion of General Obligation bonds on March 25, 2009. The Board requested Finance to distribute the $500 million based on its determination of which disbursements have the highest priority and are in the state's best interests.

February 27, 2009

STO issued $194 million in General Obligation bonds through a private placement sale with the Bay Area Toll Authority. Proceeds from the sale were used to directly fund eleven transportation projects in the Bay Area and other Northern California counties that had been impacted by the AB 55 loan freeze.

February 18, 2009

The Pooled Money Investment Board continued the AB 55 loan freeze because a budget deal had not been reached.

January 23, 2009

The Finance issued Budget Letter 09-02, which delineated how the $650 million in AB 55 loan disbursements was allocated to pay unpaid state contracts that were owed for work performed through December 17, 2008, and state administrative costs through June 2009.

January 16, 2009

The Pooled Money Investment Board continued the freeze on all AB 55 loan disbursements and increased the $500 million that was approved at the December 17, 2008 PMIB meeting for AB 55 disbursements to $650 million. The Finance recommended a list of 276 projects to continue.

December 18, 2008

The Finance issued Budget Letter 08-33, directing all state entities that have expenditure control and oversight of General Obligation and lease revenue bond programs to:

  • Cease authorizing any new grants or obligations for bond projects, including new phases for existing projects.
  • Suspend all projects, excluding those for which Finance authorizes an exemption unless the contracting entity can continue with non-state funding sources (private, local, or federal funds).
  • Freeze all disbursements from AB 55 loans that were not authorized nor submitted to the Controller for payment prior to December 17, 2008.
  • Instruct all grant or loan recipients not to enter into any new construction, other agreements or contracts that would be funded from AB 55 loans.
  • Immediatedly report to their Finance Program Budget Manager any project, which if suspended, will subject the state to unacceptable legal liability, fines or penalties.
December 17, 2008

The Pooled Money Investment Board froze all disbursements from AB 55 loans (Pooled Money Investment Account (PMIB) loans) with the exception of accrued interest and necessary administrative costs. The Board further voted to limit all future AB 55 disbursements to $500 million through June 2009.