77 Ill. Adm. Code 1126.APPENDIX B
B Financial and Economic Review Standards
Section 1126.APPENDIX B Financial and Economic Review
Standards
a) Reasonableness of
Project and Related Costs Standards
1) Preplanning
Costs shall not exceed 1.8% of construction and modernization contracts, plus
contingencies, plus equipment costs.
2) Site
Survey and Preparation Costs shall not exceed 5% of construction and
contingency costs.
3) New
Construction and Modernization Costs per Gross Square Foot (GSF) SMHRF cost
standards are derived from the RSMeans Building Construction Cost Data (Means)
publication (RSMeans, 63 Smiths Lane, PO Box 800, Kingston MA 02364-9988,
800/334-3509; 2015, no later amendments or editions included) and will be
adjusted (for inflation and location) for each project to the current year
(www.rsmeans.com).
HFSRB NOTE: HFSRB staff will
review the cost per square foot data submitted in the application to determine
compliance with the latest available cost standards of the RSMeans publication.
HFSRB NOTE: Modernization
includes the build out of leased space and shall include the cost of all
capital improvements contained in the terms of the lease. These standards are
based on 2008 data.
Type of Facility
New Construction
Modernization
SMHRF
Adjusted Means 3
rd
Quartile
70% of Adjusted Means 3
rd
Quartile
4) Contingencies
Contingency costs for projects (or
for components of projects) are based on a percentage of new construction or
modernization costs and are based on the status of a project's architectural
contract documents.
Status of Project
New Construction
Modernization
Contract Documents
Components
Components
Schematics
10%
10-15%
Preliminary
7%
7-10%
Final
3-5%
5-7%
5) New
Construction or Modernization Fees and Architectural & Engineering
(A&E) Fees
Current fees for services for
projects or components of projects involving new construction or modernization
(total amount of construction and contingencies, A&E fees for SMHRFs and
total fees for site work) can be found in the Centralized Fee Negotiation
Professional Services and Fees Handbook (available at www.cdb.state.il.us or by
contacting the Capital Development Board, 401 South Spring Street, Springfield,
Illinois 62706). HFSRB shall, for all calculations, consider the latest version
of the handbook as released on the Capital Development Board website.
A) Projects
or Components of Projects Involving New Construction
Total Amount of Construction and Contingencies
SMHRF
under $100,000
10.59-15.89%
$ 200,000
9.99-14.99%
$ 300,000
9.48-14.22%
$ 400,000
9.03-13.55%
$ 500,000
8.65-12.99%
$ 700,000
8.21-12.33%
$ 900,000
7.89-11.85%
$ 1,000,000
7.79-11.69%
$ 1,250,000
7.62-11.44%
$ 1,500,000
7.49-11.25%
$ 1,750,000
7.36-11.06%
$ 2,500,000
7.06-10.60%
$ 3,000,000
6.89-10.35%
$ 5,000,000
6.42-9.64%
$ 7,000,000
6.11-9.17%
$ 9,000,000
5.94-8.92%
$ 10,000,000
5.90-8.86%
$ 15,000,000
5.76-8.66%
$ 20,000,000
5.64-8.48%
$ 25,000,000
5.52-8.28%
$ 30,000,000
5.37-8.07%
$ 40,000,000
5.12-7.68%
$ 50,000,000
4.86-7.30%
$100,000,000
3.59-5.39%
and over
B) Projects
or Components of Projects Involving Modernization
Total Amount of Construction and Contingencies
A&E Fees for SMHRF
under $100,000
10.76-16.16%
$ 200,000
10.16-15.26%
$ 300,000
9.65-14.49%
$ 400,000
9.20-13.80%
$ 500,000
8.81-13.23%
$ 700,000
8.36-12.56%
$ 900,000
8.04-12.06%
$ 1,000,000
7.93-11.91%
$ 1,250,000
7.76-11.66%
$ 1,500,000
7.63-11.45%
$ 1,750,000
7.50-11.26%
$ 2,000,000
7.40-11.12%
$ 2,500,000
7.19-10.79%
$ 3,000,000
7.02-10.54%
$ 5,000,000
6.54-9.82%
$ 7,000,000
6.22-9.34%
$ 9,000,000
6.04-9.08%
$ 10,000,000
6.00-9.02%
$ 15,000,000
5.87-8.81%
$ 20,000,000
5.74-8.62%
$ 25,000,000
5.62-8.44%
$ 30,000,000
5.48-8.22%
$ 40,000,000
5.21-7.83%
$ 50,000,000
4.95-7.43%
$100,000,000
3.65-5.49%
and over
6) Capital
Equipment Not Included in Construction Contracts
Standards for capital equipment
not included in construction contracts are established by type of facility and
are derived from the third quartile costs of previously approved projects for
which data are available. The standards apply only to the following types of
projects: establishment of new facilities, expansion of existing facilities
(e.g., bed additions), and modernization of existing facilities involving
replacement of existing beds, relocation of existing facilities, etc. The
standard in this subsection (a)(6) is calculated for the year 2013.
HFSRB NOTE: Modernization includes
the build out of leased space and shall include the cost of capital equipment
included in the terms of the lease.
SMHRFs per Bed
$7,524.83
7) Inflation
Factor
Costs for construction and
modernization contracts and equipment are to be adjusted for projected
inflation. The projected inflation rate is to be calculated to the midpoint of
construction. For construction midpoint of up to 3 years, the inflation rate
shall be an average of the previous 3 years annual inflation rates for
construction as determined by RSMeans. For construction midpoints beyond 3
years, the inflation rate shall be the lesser of this rate or 3% for the period
of time beyond 3 years.
b) Financial Viability
Standards
1) Current
Ratio = Current Assets/Current Liabilities
Type of SMHRF
Current Ratio
Not-For-Profit, System
1.5 or more
Not-For-Profit, Non-System
1.5 or more
For-Profit, System
1.5 or more
For-Profit, Non-System
1.5 or more
Governmental
1.5 or more
2) Net
Margin Percentage = (Net Income/Net Operating Revenues) X 100
Type of SMHRF
Net Margin
Not-For-Profit, System
2.5% or more
Not-For-Profit, Non-system
2.5% or more
For-Profit, System
2.5% or more
For-Profit, Non-system
2.5% or more
Governmental
0% or more
HFSRB NOTE: Net Margin Percentage
for For-Profits is before the provision for income taxes. Net income is the
excess of revenues over expenses from operations, before non-recurring income
or expense.
3) Long-Term
Debt to Capitalization = (Long-Term Debt/Long-Term Debt plus Net Assets) X 100
Type of SMHRF
Long Term Debt to Capitalization
Not-For-Profit, System
80% or less
Not-For-Profit, Non-system
80% or less
For-Profit, System
50% or less
For-Profit, Non-system
50% or less
Governmental
NA
HFSRB NOTE: For SMHRFs and
for-profit facilities, the applicant shall explain the rationale of the use of
debt rather than the issuance of stock (if this is the case).
4) Projected
Debt Service Coverage = Net Income plus (Depreciation plus Interest plus
Amortization)/Principal Payments plus Interest Expense for the Year of Maximum
Debt Service after Project Completion
Type of SMHRF
Project Debt Service Coverage
Not-For-Profit, System
1.5 or more
Not-For-Profit, Non-system
1.5 or more
For-Profit, System
1.5 or more
For-Profit, Non-system
1.5 or more
Governmental
1.5 or more
HFSRB NOTE: Net Income is the
excess of revenues over expenses from operations, before non-recurring income
or expense.
5) Days
Cash on Hand = (Cash plus Investments plus Applicant Board Designated
Funds)/(Operating Expense less Depreciation Expense)/365 days
Type of SMHRF
Days Cash on Hand
Not-For-Profit, System
45 or more days
Not-For-Profit, Non-system
45 or more days
For-Profit, System
45 or more days
For-Profit, Non-system
45 or more days
Governmental
45 or more days
HFSRB NOTE: The Days Cash on Hand
requirement can be met by a combination of cash and investments held by the
facilities or available funds from the backup line of credit.
6) Cushion
Ratio = (Cash plus Investments plus Board Designated Funds)/(Principal Payments
plus Interest Expense for the Year of Maximum Debt Service after Project Completion)
Type of SMHRF
Cushion Ratio
Not-For-Profit, System
3.0 or more
Not-For-Profit, Non-system
3.0 or more
For-Profit, System
3.0 or more
For-Profit, Non-system
3.0 or more
Governmental
NA
HFSRB NOTE: The applicant may
also include in the numerator the amount of funds available from an existing or
proposed backup line of credit. If the applicant includes funds available from
a line of credit, it shall provide documentation regarding the terms and conditions
of the line.