The Cellucci-Swift Administration remains committed to the fiscally responsible management of the Commonwealth's capital spending needs. During the past eight years, more than $19 billion has been spent rebuilding and upgrading Massachusetts's aging infrastructure while simultaneously adhering to the limits of the five-year capital spending plan. Almost half of the roads, bridges, mass transit systems, libraries and other infrastructure in the Commonwealth has been rebuilt since the mid-1990's. At the same time, the Wall Street investment community has rewarded the Commonwealth's prudent fiscal practices with frequent bond rating upgrades-most recently just this month, saving tens of millions of dollars in interest expenses.

The five-year capital spending plan process was implemented in Fiscal Year 1992 in response to outstanding debt burdens that, from Fiscal Years 1987 to 1991, had increased an average of 20% each year. The plan sets forth the total amount of bond-funded capital spending that the Commonwealth can undertake in each of five successive years as determined by existing legislative authorization and projected debt-service requirements. The annual spending total is divided among oversight agencies and designated departments based on spending plans approved by the Secretary of Administration and Finance and monitored by the Fiscal Affairs Division. Specifically, spending under the plan is divided among eight strategic program areas: transportation, infrastructure, the environment, information technology, housing, economic development, public safety, and water treatment. By the end of the current five-year plan, all major sectors of the Commonwealth's public infrastructure will have been significantly upgraded.

Although approximately $9.8 billion in bond-funded capital spending is authorized but unissued under current law, the capital plan limits spending of general and special obligation bond funds to $1 billion per year in Fiscal Years 2000 through 2004. Capping capital spending to an average of $1 billion per year over five years constrains growth in the Commonwealth's outstanding debt to an average of 2.6% annually. The process has also enhanced the Commonwealth's ability to develop alternatives to traditional general-obligation debt financing and to employ more flexible responses for addressing outstanding capital concerns, including the appropriation of one-time supplemental operating budget funds.

The Cellucci-Swift Administration, in cooperation with the Legislature, will continue to identify non-recurring capital projects that might be funded from the operating budget. Three funds have been established since 1997 that relieve the future debt burden on taxpayers by using surplus operating revenues to fund capital investments in lieu of long-term debt:

1. Capital Investment Trust Fund
   • established by Chapter 88 of the Acts of 1997; and
   • funded with $229.9 million in surplus Fiscal Year 1997 revenues.
     
2. Capital Improvement and Investment Trust Fund
   • established by Chapter 289 of the Acts of 1998; and
   • funded with $307.8 million in surplus revenue-$189.2 million and $118.6 million from Fiscal Years 1998 and 1999, respectively.
     
3. Capital Project Reserve Fund
   • established by a modification of state finance law in Fiscal Year 1997; and
   • funded by a total to date of $311.5 million in year-end surpluses.

Finally, approximately $408 million in operating surplus was transferred in October 1999 to a debt defeasance trust fund. This provided an equal amount of additional debt capacity without adding to the Commonwealth's outstanding debt.

The fiscal impact of new capital projects is carefully evaluated before new capital funds are committed. The Cellucci-Swift Administration is dedicated to long-term investments that will not only improve the Commonwealth's infrastructure for the benefit of future generations but also preserve the Commonwealth's hard-won fiscal stability and vitality.

Transportation

The Cellucci-Swift Administration will continue its support of the comprehensive capital spending program for transportation projects that has resulted in the dramatic improvement in the Commonwealth's transportation infrastructure in the past nine years. The Massachusetts Highway Department (MassHighway) manages 89% of the state and municipal bridges in the State. (The balance is managed by six different state agencies.) In the past seven years, more than 30% of MassHighway bridges have been reconstructed, significantly renovated or repaired, increasing the number of bridges operating at their maximum carrying load capacity by 31%. Fifty-six percent of the state highway system, or 4,500 lane miles, has been resurfaced such that, from 1991 to 1997, the percentage of state-maintained roadways with pavements in excellent condition rose to 78% from 54%. Funding for local road and bridge projects (Chapter 90 reimbursements) has increased from $23.6 million in 1991 to $138.4 million in 1998, a 486% increase.

The Executive Office of Transportation and Construction's five-year capital plan includes projects directed by MassHighway; the State's 15 Regional Transit Authorities; the Massachusetts Aeronautics Commission (MAC); and the Central Artery/Tunnel (CA/T) project in Boston. Projects in progress include: the relocation and widening of Route 146 in the Worcester/Millbury area; the relocation of Route 44 in the Plymouth/Kingston/Carver area; reconstruction of the Coolidge Bridge in Northampton and Hadley; construction of a new Fifth Street Bridge in Fitchburg; substructure work for the Brightman Street Bridge in Somerset and Fall River; and construction of a temporary bridge and reconstruction of the Fore River Bridge in Quincy and Weymouth as well as the CA/T project.

The CA/T project's peak construction period extends through Fiscal 2001. The Commonwealth anticipates issuing Bond Anticipation Notes (BANs) and Grant Anticipation Notes (GANs) to enable the project to proceed on schedule without costly delays. BANs will be repaid as the cash contributions from the Turnpike and Port Authorities are received. GANs, issued to fund federally eligible project costs, will be repaid as future federal grants are received from the Federal Highway Administration.

Infrastructure

The Division of Capital Asset Management and Maintenance (DCAMM), within the Executive Office for Administration and Finance, is responsible for major vertical construction and infrastructure maintenance of buildings owned by the Commonwealth. DCAMM oversees building construction and major renovation and repair projects that cost more than $200,000 or exceed an agency's resources.

Projects under DCAMM's purview are reflected in the Commonwealth's five-year capital plan. They include the repair, renovation, reconstruction, and construction of the Commonwealth's courthouses and prisons, jails and correctional institutions; major repairs and renovations at Health and Human Services facilities; upgrades to campuses of the University of Massachusetts and of the state and community college systems; maintenance of environmental facilities; and the repair and renovation of state office buildings. In the past eight years, DCAMM has directed 506 projects at state facilities, including 22 new construction, 71 renovation, 256 repair and 157 small-repair projects, at a total cost of more than $1 billion.

Courts
The recently approved Courthouse Bond Bill provides $730.3 million for the construction, renovation, and repair of court facilities statewide. Approximately half of the funding will be allocated to priority projects over the next five years as established under the Court Facility Master Plan. To date, five major new construction or major renovation projects and ten repair projects have been initiated under the terms of this bond bill.

Since Calendar Year 1991, seven new courthouse facilities have been built, including the New Chardon Street Courthouse in Boston, the Fenton judicial center in Lawrence, and the new Brockton courthouse that opens later this year. Six other courthouse facilities have been substantially renovated and 38 have undergone significant repairs. In all, capital improvements have been made to 40.8% of the Commonwealth's 125 courthouse facilities in less than nine years.

Future projects include the renovation of the Suffolk County Courthouse Historic Building, construction of a new courthouse in Taunton, and more than $12 million in repair and deferred maintenance projects at various courthouses.

Public Safety
Over the past eight years, the number of prison beds at Massachusetts's 23 correctional facilities has increased by 71.7%-from 4,788 in Calendar Year 1991 to 8,130 in Calendar Year 1999. The total includes 1,152 at the new $105-million facility in Shirley, the first maximum-security facility built in Massachusetts in 40 years. Funding has also been approved for the expansion and renovation of the Massachusetts Correctional Institution (MCI)-Norfolk, and for major renovations and repairs to four other facilities: MCI-Cedar Junction, MCI-Concord, MCI-Lancaster, and Southeastern Correctional Center-Bridgewater. In addition, plans for a new State Police station in Millbury are now in design.

DCAMM also oversees capital improvements at 15 Department of Youth Services residential detention centers. The construction of the 100-bed Metro Youth Service Center is to be completed in Fiscal Year 2000 and other renovation projects are in progress or planned.

Health and Human Services
The Executive Office of Health and Human Services operates nine state hospitals and eight developmental centers through its departments of Public Health, Mental Health, and Mental Retardation. Projects underway or planned include building systems upgrades at Taunton and Worcester State Hospitals for the Department of Mental Health and a utility and infrastructure upgrade project at the Department of Mental Retardation's Monson Developmental Center.

University of Massachusetts
Over the last eight years, DCAMM has spent approximately $126.1 million on University of Massachusetts (UMass) buildings, including the construction of four new academic facilities. Projects currently in the study, design or construction phase include the building of three new facilities: an engineering building at UMass Amherst, a research center at UMass Medical Center in Worcester, and an addition to the athletic facility at UMass Dartmouth.

State and Community Colleges
From 1991 to 1999, DCAMM contributed $113.1 million for improvements to Massachusetts's nine state and 15 community college campuses, including the construction of new facilities at Middlesex, Greenfield, and Roxbury Community Colleges.

Projects underway include new academic facilities at Worcester State College, at Bristol, Quinsigamond, and North Shore Community Colleges, and at the Massachusetts Maritime Academy. Athletic facilities funded by DCAMM and the Higher Education Finance Authority are under construction at Bridgewater, Fitchburg, and Framingham State Colleges and at Holyoke Community College.

State Office Buildings
DCAMM coordinates capital improvements on state-owned office buildings through the Bureau of State Office Buildings. Major undertakings currently planned include the total rehabilitation of the Saltonstall office building in Boston and the reconstruction and preservation of the State House façade.

Environment

The Cellucci-Swift Administration will continue its support of the array of programs that, under the aegis of the Executive Office of Environmental Affairs (EOEA), preserve and protect the environmental assets of the Commonwealth. Under the current five-year capital plan for environmental agencies, approximately half of all spending is dedicated for land acquisitions, authorized primarily as part of the 1996 Open Space Bond Bill and the 1996 Rivers Protection Act. EOEA also finances projects to revitalize the Commonwealth's seaports and state parks, and to provide watershed protection and pollution prevention and remediation.

The Commonwealth now owns roughly 500,000 acres, or 9.6%, of the 5.2 million total land acres that constitute Massachusetts. From 1991 through 1998, EOEA acquired, either by outright purchase or from the acquisition of development and conservation rights, 118,000 acres of open space. EOEA is working aggressively to realize the Cellucci/Swift Administration's goal of protecting 200,000 acres of open space in Massachusetts.

Despite being one of the smallest states in the nation, Massachusetts has the ninth largest state forest and park system. Since 1991, the Department of Environmental Management has spent approximately $76 million on improvements to various facilities statewide, including major improvements to 19 state parks, nine heritage parks, 12 state forests, and eight state reservations.

In the past eight years, the Department of Environmental Protection has spent $63.9 million to supplement contributions from private entities on emergency response, risk abatement, maintenance of water treatment systems, and the clean-up of 3,221 hazardous waste sites in Massachusetts.

The Metropolitan District Commission (MDC) has spent approximately $54 million on major improvements to park and recreational facilities since 1991. Specifically, major improvements to 12 of MDC's 54 playgrounds have been completed, and improvements to eight additional playgrounds are nearing completion. Major infrastructure improvements have also been made to half of MDC's ice rinks.

Information Technology

The responsibilities of the Information Technology Division (ITD) include the oversight, management, and coordination of the Commonwealth's information technology (IT) projects that are supported with both bonded debt under the IT cap and funds in agency operating budgets. As part of its ongoing efforts to establish the management framework and coordination necessary to meet the Commonwealth's future IT needs, the Division establishes and maintains statewide IT standards and supports shared mainframe, telecommunications, and applications development services for Commonwealth agencies. To accomplish these objectives, IT activities are conceived, directed and monitored through a statewide strategic planning partnership composed of Secretariat IT officers and the State's Chief Information Officer.

Current priorities in information technology include implementation of initiatives in public safety technology, in improved information systems at state agencies, and in education technology as provided in the $314 million 1996 Information Technology Bond Bill. ITD also continues to work with the Commonwealth's Trial Courts to create a comprehensive information system for the courts that is supported by a $75 million bond authorization.

Housing

Funding for the Housing component of the Commonwealth's five-year capital spending plan supports the housing and community development projects administered through the Department of Housing and Community Development (DHCD).

DHCD manages capital spending for the construction, modernization, and repair of public housing through payments to local housing authorities. The Commonwealth's affordable housing stock benefits the elderly, low-income individuals and families, and individuals who are disabled or have specialized residential needs. In the past eight years, DHCD has spent over $400 million on new construction or the repair or renovation of public housing facilities across the Commonwealth. DHCD now manages, through the local housing authorities, a total of 50,752 public housing units. Since 1991, 1,580 new housing units have been constructed.

DHCD also administers the Abandoned Building Demolition program; the Housing Innovations Fund; the Housing Stabilization Fund; and the Community Development Action Grant (CDAG) program. CDAG provides grants, typically ranging from $100,000 to $1 million, to cities and towns for community infrastructure improvements that promote local business development and employment. In the past eight years, 42 cities and towns have received grants, funding 55 projects. Since 1994, these grants have leveraged over $1 billion dollars in investment from private and other sources.

Economic Development

The Executive Office for Administration and Finance coordinates an array of capital projects initiated and managed by a combination of state agencies and executive offices to promote economic development and growth at the local or regional level. Economic development projects currently incorporated in the five-year capital spending plan include: the reconstruction and expansion of the Basketball Hall of Fame in Springfield, a cornerstone of the project to rejuvenate the city; an ongoing grant program to construct, renovate, and expand public libraries; matching grants for the construction of parking facilities to revitalize downtown business districts; and funding for the preservation of historic properties.

During the past eight years, $135 million in state grants have been awarded to 156, or 42%, of the Commonwealth's 371 libraries for infrastructure improvements, including the construction of 27 new libraries, major renovations and/or additions to 79, and major repairs to another 18. Chapter 55 of the Acts of 1999, approved last August, provides $28.4 million for 22 additional public library infrastructure projects. Current capital plans include funding for the reconstruction of another 40-50 public libraries within the next five years.

In addition to working with DCAMM on infrastructure improvements and construction, the Executive Office of Public Safety manages its own capital spending in support of the Commonwealth's law enforcement, fire fighting, emergency response, and correctional systems. Among the public safety capital investments included in the five-year plan are improvements to the statewide telecommunications system, equipment for the Hazardous Materials Response Team, and certain maintenance and repairs to state and county correctional facilities not covered by DCAMM.

Water Treatment

The Massachusetts Water Pollution Abatement Trust (MWPAT) is administered by the Department of Environmental Protection and manages the state and federally funded State Revolving Fund programs for clean water and drinking water. The revolving loan fund helps finance both wastewater treatment and drinking water projects in cities, towns, and other public entities throughout the Commonwealth. The capital spending plan includes continued capitalization of the loan fund. In Fiscal Year 2000, capitalization and other funding allowed the Trust to issue more than $365 million in new loans. Since its first pool loan in Calendar Year 1993, MWPAT has provided $1.6 billion in state revolving funds to approximately 139 of the Commonwealth's cities and towns as well as to the Massachusetts Water Resources Authority and to the South Essex Sewerage District.

Convention Centers

The enactment in November 1997 of "An Act Relative to the Construction and Financing of Convention and Exhibition Centers in the Commonwealth" authorized the Commonwealth to spend up to $609 million for the design and construction of a new, state-of-the-art convention and exhibition facility in South Boston. The law also authorizes $49.5 million for the expansion and renovation on the site of the Springfield Civic Center, and $19 million to reimburse the City of Worcester for construction of a new convention center. Revenue bonds to permanently finance the Boston, Springfield, and Worcester convention centers will be payable from a 2.75% additional hotel tax in Boston, Cambridge, Springfield, and Worcester; sales tax receipts from businesses near the new Boston facility that first opened on or after July 1, 1997; a surcharge on car rentals in Boston; a parking surcharge at all three facilities; the entire hotel tax collected at hotels near the new Boston facility; and all sales tax and hotel tax receipts at new hotels in Boston and Cambridge that opened on or after July 1, 1997.

Twenty-five million dollars of the general obligation bonds authorized in the convention center legislation will assist the City of Springfield in developing the Basketball Hall of Fame in conjunction with the NBA and the NCAA. The project to expand the Basketball Hall of Fame has moved from the planning/design phase to the construction phase. The project includes construction of a new facility, renovation of infrastructure around the Hall of Fame, and road improvements adjacent to the Hall of Fame.

In Calendar Year 1999, several major milestones were achieved in the development of the new Boston Convention and Exhibition Center project. The Boston Redevelopment Authority (BRA) began acquiring properties on the Center site and, to date, relocation plans for 84 of the 92 tenants have been finalized. Site preparation is scheduled for the Massachusetts Convention Center Authority (MCCA) to break ground in April 2000. In the fall, the schematic design for the building was unveiled and the MCCA selected a developer for a 1,000-room hotel to be built adjacent to the convention center. As a result of these and other actions by the MCCA and the BRA, project completion is expected in 2003. When fully operational, the new Boston convention center has the potential to generate an estimated $764 million annually in direct and indirect spending by convention delegates, exhibitors, and visitors. The project is also expected to generate over 10,000 new jobs in the Commonwealth.