Beginning with 2002-03 capital outlay expenditures, Building Aid will no longer reimburse districts for approved capital outlay expenditures made in the base year. Capital outlay expenditures incurred after June 30, 2002, for projects approved by SED before 7/1/02, will be amortized, without interest, and aid will be paid out over the life of the project according to an assumed schedule. Building Aid will be paid on the amortized capital outlay beginning with the 2004-05 aid year. However, SED has been calculating projected 2004-05 aid on amortized capital outlay expenses since fall 2003. Please refer to section 2 of this document for information on the limited types of projects which can be excluded from capital amortization, and which are eligible for Capital Exceptions Aid.

    Annual aidable amortized capital outlay expense for projects approved before 7/1/02, is aggregated to the district level and will appear on the BLD, BLD10, BLD3, BLDEST, BLD10EST and BLD3EST output reports, accessible via the State Aid web site: http://stateaid.nysed.gov . As with retro and prospective debt service expenditures on the output reports, districts are able to click and view a project level report of amortized capital outlay costs. Reorganization incentive eligible expenses appear on the reports as well.

    Most projects eligible for amortization of the remaining capital balance are “retro” projects (CAD < 12/1/01 and 1st borrowing < 12/1/01). However, “prospective” projects (CAD = 12/1/01 OR CAD < 12/1/01 if 1st borrowing > 12/1/01) can be eligible for the capital amortization if the CAD is between 12/1/01 and 6/30/02. Capital costs for prospective projects with CAD after 6/30/02 are included with borrowing costs in the total approved project cost used to establish the prospective amortization schedule.

    Following is an explanation of how the remaining capital allowance for projects approved before 7/1/02 is being amortized and a sample calculation of aid on such an amortization:

    • The amortization begins 18 months after 1/1/03 (7/1/04) or on the date that a general contract has been awarded for the project, whichever is later. Since under these conditions, no amortization can begin until 7/1/04, 2004-05 is the first year in which aid will be paid;
    • The cost to be amortized is the capital outlay allowance remaining for the project (including remaining RESCUE), after capital expenditures through the 2001-02 school year have been deducted. Amounts currently in capital reserves will not be amortized and therefore will not be aided. Where appropriate, districts must contact the Office of Facilities Planning in SED to shift funds from capital reserves to budgetary appropriations on a FPFI in order for those funds to be included in the amortization;
    • The number of years over which the remaining capital allowance will be amortized is the period of probable usefulness (PPU), determined as follows, less 12 months:
      1. For “retro” projects: maximum project life as displayed on the individual project listing for retro bond(s) funding the project (see retro project web report)
      2. For “prospective” projects: 15, 20 or 30 years as assigned for purposes of prospective amortization of approved borrowing costs
      3. For “capital only” projects: same as (2) above
    • The calculation of the annual assumed aidable expense is as follows: the remaining capital outlay allowance, as defined above, will be divided by the positive remainder (to the nearest year without rounding) of the PPU of the project (as defined above) less 12 months. This quotient will be calculated to the nearest whole dollar without rounding;
    • Each year of the amortization, aid on the annual assumed aidable expense will be calculated using the appropriate aid ratio for the aid year and project. (Note: The constant aid ratio in the example below is for purposes of the example only, and can actually fluctuate from year to year)
    • A preliminary assumed amortization schedule has been established for each eligible project in order to project 2004-05 aid on the annual aidable expense for eligible projects. SED plans to adjust these amortization schedules as follows after the preliminary schedule is established: (1) to reflect any changes to the remaining capital outlay allowance that may result from the State Aid claim review of Schedule M1 capital expenses for 2000-01 and 2001-02 Building Aid, and for 2002-03 Capital Outlay Transition Grants. The completion of the Schedule M1 claim reviews for these aid years will ensure that the most accurate capital balance is used to calculate this aid when payment begins in the 2004-05 aid year, (2) to reflect any changes in the approved capital cost for the project due to revised SA-139 and/or FPFI, and (3) to reflect any changes in the approved capital cost for the project due to the submission of the Final Cost Report. Once the Final Cost Report has been approved by the Office of Facilities Planning the annual aidable expense for a project will be recalculated for each year of the schedule at the time the final cost report for the project is processed. At that time, overpayments or supplementals will be calculated for aid years already passed, and the aidable amortized expense for the remaining years of the schedule will reflect the changed annual aidable expense amount.

    What are school districts requested to do in this area?

    • Make sure that any shift of funds from capital reserves to budgetary appropriations, or other potential changes, has been accompanied by district submission of an FPF1, used to revise the SA-139. The Facilities Planning Office (518-474-3906) can provide more information on what is required for SED to re-allocate project funds from capital reserves to budgetary appropriations;
    • View your districts’ 2004-05 BLDEST, BLD10EST and BLD3EST output reports now on the State Aid web site to verify the 2004-05 aidable expense displayed in this category. Via the link from these reports, view the project level data generating the aggregated expense on the output reports;
    • In the fall of 2004, view the 2004-05 BLD, BLD10, BLD3, and 2005-06 BLDEST, BLD10EST and BLD3EST output reports on the State Aid web site to verify the 2004-05 and 2005-06 aidable expense displayed in this category. Via the link from these reports, view the project level data generating the aggregated expense on the output reports.

    Sample Calculation of Aid on The Remaining Capital Allowance for Projects Approved by the Commissioner Before 7/1/02, with Capital Expenses After 6/30/02

    Retro Project 0001-006:

    • Approved by the voters: 10/1/00
    • Commissioner’s Approval Date: 10/1/01
    • Contract date: 11/1/01
    • Total approved cost: $8.5 million
    • Total capital allowance: $750,000
    • 2001-02 capital outlay expenses: $250,000

    • Remaining capital outlay allowance for amortization: $750,000 – $250,000 = $500,000
    • Maximum project life displayed on retro web report: 15 years
    • Number of years over which $500,000 will be amortized: 15 years – 12 months, to the nearest year without rounding = 14 years
    • Annual aidable expense: $500,000 / 14 = $35,714.29, to the nearest whole dollar without rounding = $35,714

    Assuming an unchanging aid ratio of .75, the district could expect the following aid on the remaining capital outlay costs associated with project 0001-006:

    Capital Outlay Costs Associated with Project 0001-006
    Aid Year Current Year Aidable Expense Aid Ratio Aid Amount
    2004-05 $35,714 0.75 $26,786
    2005-06 $35,714 0.75 $26,786
    2006-07 $35,714 0.75 $26,786
    2007-08 $35,714 0.75 $26,786
    2008-09 $35,714 0.75 $26,786
    2009-10 $35,714 0.75 $26,786
    2010-11 $35,714 0.75 $26,786
    2011-12 $35,714 0.75 $26,786
    2012-13 $35,714 0.75 $26,786
    2013-14 $35,714 0.75 $26,786
    2014-15 $35,714 0.75 $26,786
    2015-16 $35,714 0.75 $26,786
    2016-17 $35,714 0.75 $26,786
    2017-18 $35,714 0.75 $26,786
    TOTAL: $499,996   $375,004
  2. Capital Exceptions Aid: 2004-05 Building Aid on 2003-04 Capital Outlay Expenses For Certain Projects

    Districts may receive reimbursement for base year capital outlay expenses for projects that are wholly funded through capital outlay and which fall into one of the following three categories:

    1. A project with a total cost of no more than $100,000. A district may receive aid for a maximum of one such project in any aid year. A district may spend and report the capital expense for such a project over multiple years, and receive aid on the same project over multiple years; however, only one project per year can receive aid.

    2. A construction emergency project. A construction emergency project is a project that is necessary to provide immediate repairs in order to eliminate or mitigate hazards that threaten the health and/or safety of the building’s occupants as a result of either the unanticipated discovery of hazardous substances such as asbestos, or significant damage caused by a fire, snow storm, ice storm, excessive rain, high winds, flood or a similar catastrophic event. Please note that while an emergency project may be carried out prior to receipt of Commissioner’s approval, it must receive approval from the Office of Facilities Planning in order for expenditures to be eligible for State Aid.

    3. A project that if bonded, would cause a small city school district to exceed 95% of its constitutional debt limit.

    The appropriate building aid ratio will be applied to reported expenses to determine aid. Capital outlay expenses for projects in these categories are not eligible for Reorganization Incentive Aid.

    Click here for a more information, including relevant claim procedures and deadlines: Capital Exceptions Aid: Building Aid on Base Year Capital Outlay Expense for Certain Projects

  3. Amortization of Capital Outlay Costs For Projects With Commissioner's Approval Date After 6/30/02

    For prospective projects approved after 6/30/02, approved project costs funded from budgetary appropriations will be included in the total approved project costs used to establish the assumed amortization schedule for the project.

    Please feel free to contact Caylyn Agans in the Building Aid Unit of the State Aid Office (518-474-2977) with any questions regarding aid on or reporting of capital outlay expenses for projects in the categories described above.

Last Updated: July 17, 2023