OFFICIAL OPINION No. 24

OFFICIAL OPINION No. 24 Air-conditioning project at Hamburg S~ate School and Hospital- "Main- tenance and repair" t-or budgeting purposes-Non-capital expense. 1. The proposed installation of free-standing air-conditioning units at Ham- burg State School and Hospital is within the meaning of "maintenance and repair" of the "Capital Budget Instruction" of the Office of the Budget. 2. An improvement to an existing structure is not a capital expense unless the function of the structure is changed or the usefulness of the struc- ture is increased. Honorable Helene Wohlgemuth Secretary Department of Public Welfare Harrisburg, Pennsylvania Dear Secretary Wohlgemuth: Harrisburg, Pa. March 27, 1973 You have requested advice as to whether a proposed project to install air conditioning in certain wards of Hamburg State School and Hospital is a capital or non-capital expense for bud- geting purposes. I have reviewed the project plans, and you are advised that this project comes within the definition of "main- tenance and repair" and can be budgeted on a non-capital basis. -'fi;."7caPi'tal Budget I~~structio~" ~f -ih;; Offi~f th~ B~dg~t define "capital project" to mean "any building, structure, facility, or physical public betterment or improvement; or any land or rights in land· or any furnishings, apparatus, or equipment for any public betterment or impr~vement; or ~my un~er­ taking to construct, renovate, improve, eqmp, furnish, or acquire any of th~ foregoing; provide~ that . .'. the project has ... an estimated. tocal cost m excess of twenty-five thousand dollars ( $25,000). _Improvements to existing structures must be suck as will increase the usefulness or change the use or function." p. 35, (Em- phasis added. ) The same instructions state that "maintenance and repair" consist of 58 OPINIONS OF THE ATTORNEY GENERAL "normal upkeep or restoration work done to keep a building ... in its present condition or state of useful- ness .. . Examples of maintenance and repairs [include]; ( 3 ) Alterations that do not change the function or use of t he building . . .. " p. 35 (Emphasis added.) The project at Hamburg consists of the installation of free- standing air-conditioning units in the non-ambulatory wards; the operation of these units will also require the installation of a new wiring system, including certain over-head lines. The approximate costs of the project are as follows: Air-conditioning Equipment $115,000 Secondary Wiring 38,842 P rimary (over-head) Wiring 28,000 ---- - Total $181,842 Traditionally, wirmg that runs through existing ducts (as will the secondary wiring in this project) and free standing air-conditioning units can be treated on a non-capital basis. The difficult issue involves the installation of new over-head wiring, which represents about 16 % of the total cost of the project. The most significant characteristic of the project is that the new wiring will not increase the capacity of existing circuits for gen- eral use; the increased capacity of the new wiring will be used only to support the operation of the free-standing units. The function of the air-conditioning and its supportive wiring will be to prevent dehydration of residents during the hot summer months. Thus, the project will make possible the continued use of the non-ambulatory wards for housing certain types of resi- dents. '1'he basic function of the buildings will not be enlarged or changed. Thus, the proposed project will not "increase the usefulness or change the use or function" of the buildings. A different question would have been presented if the new wiring w ere designed to increase the usefulness of the institu- tion's general circuits, or if the air-conditioning were to make possible a new function for the non-ambulatory wards, or if the project were intended to make possible an increase in the num- ber of beds in the wards, or even if the cost configuration had been different. However, considering all aspects of the partic- ular facts of this case, I conclude that the proposed project can be budgeted on a non-capital basis. Very truly yours, ROBERT F. NAGEL Deputy Attorney General ISRAEL p ACKEL Attorney General OPINIONS OF THE ATTORNEY GENERAL 59