Construction Freeze

"No, really, we've been working on this
already-started project for, like, ever."If you saw department directors or university presidents running around with shovels today, here's why: we're delaying the start of any new capital construction projects (new meaning not started by Oct. 1st) while we assess the state's financial situation. That puts the pressure on the get projects into the "started" category.

Governor Ritter announced the freeze today. It applies to $75 million worth of projects in the FY 2008-09 budget that haven't started and aren't necessary for public health and safety.

A lot of projects are built in phases which means they'll shut down after the current phase is completed. Projects that are already underway or were funded in previous years' budgets will continue. So will controlled maintenance projects.

The projects are officially delayed until January 31st of 2009. Department directors and higher ed CEOs can ask OSPB for an exception to the freeze.

Here's a list of the delayed projects:

Agency	Title	Cost
UCCS	Science/Engineering Building	$7,000,000
FLC	Berndt Hall Reconstruction	$15,699,453
CSU-Fort Collins	Clark Building	$2,000,000
CU-Boulder	Ekeley Renovation	$11,559,536
CU-Boulder	Ketchum	$8,435,946
CSM	Hall of Justice Demo/Classrooms	$3,516,697
PCC	Learning Center	$2,971,482
DMVA	Grand Junction Readiness Center	$3,994,432
Human Services	CMHIFL Cottage A/C	$1,806,035
Human Services	Kipling Village Remodel	$400,340
UNC	Butler Hancock Interior	$3,000,000
CSU-Pueblo	Academic Resource Center	$2,797,436
CSM	Brown Hall Addition	$2,000,000
CNCC	Craig Academic Center	$1,990,056
Corrections	Fort Lyon Expansion	$7,162,494

For a more detailed look at the capital projects, click here.

Hiring Freeze

The state isn't going to be hiring new employees while we figure out how much the financial meltdown is going to lower state revenues.

Gov. Ritter announced the freeze today. It technically takes effect on Oct. 1, but it applies to any jobs that haven't been offered and accepted by Sept 29th.

No General-Funded and Cash-Funded positions can be filled unless OSPB grants an exemption.

The freeze doesn't apply essential personnel including jobs critical to protecting health, life and safety.

The Governor's order only applies to the executive branch, but other parts of the state will probably go along to some extent. Other parts are those run by independently-elected officers, like the Secretary of State, the Attorney General and the Treasurer, the Judiciary and Higher Education.

C SAFE Run

Local governments try to get the most out of their money, but they don't want to take risks with public money. So they keep their day-to-day spending money in checkable money market accounts. The accounts earn some interest, the districts can write checks right out of the funds and, most of all, they're safe. Or were save until the financial wizards of Wall St. started drowning in their own greed.

One of the country's largest (and oldest) money market fund just froze its assets to protect itself against an “It's a Wonderful Life” - type run on its assets.

Of course in this version of the movie Jimmy Stewart would be saying:

“I don't have your money, it's in Mr. Sullivan's $47 million severance package, in the Bear Stearns bailout and a hundred other schemes for protecting rich and powerful people from their own ineptitude and malfeasance.”

Local governments in Colorado keep their spending money in two privately-managed funds. One is called the Colorado Trust and the other is called the Colorado Surplus Asset Fund Trust (CSAFE).

About 360 local governments (including school districts, water districts, etc.) put their money in CSAFE. CSAFE, in turn, invests, some of the money in three money market funds. Two of them have frozen their assets and the third is probably thinking about it. It totals up to about $1 billion out of the fund's total of $2.5 billion assets.

The money itself is probably safe. “We don't have concerns about losses here,” said State Treasurer Cary Kennedy. The problem is liquidity. Credit markets are tight and the money market funds can't get their hands on enough cash to cover all of the immediate requests for withdrawals. That means CSAFE can't withdrawal as much money as it needs to meet the requests it's getting from the local districts.

CSAFE is managing the crisis by limiting local governments to withdrawing no more than 5% of their assets per day. It's handling critical needs for more money on a case-by-case basis.

Kennedy says that's OK for now, but if it goes on too long, some districts are going to have trouble paying their bills.

Big Growth at CSU-Pueblo

CSU-Pueblo is going through a growth spurt that's both a consequence of and cause for cash-funded capitol construction.

Over the past few years, CSU-Pueblo had added a student recreation center, completely funded with student fees, and a stadium to bring the football team back on campus using money from private donors.

It's making the school more attractive and enrollment is up nearly 12% this year. The surge in students is overwhelming the dorms and the university is housing some freshmen in a nearby hotel. It's a temporary situation because the campus is adding student housing.

In the Fall of 09, Phase 1 of it's student housing expansion will open with 250 beds. Next Monday CSU will ask the JBC to OK Phases 2 & 3 of the housing project. They're both 202 projects, so JBC approval shouldn't be much more than a formality.

Thunderbowl Stadium
The Neta and Eddie DeRose Thunderbowl Stadium just hosted it's first college football game. The project cost $13.6 million.