The State of California has announced that its fiscal crisis has impacted the ability to sell long-term bonds, jeopardizing the state's capacity to borrow short-term funds. The Pooled Money Investment Board (PMIB) has frozen $3.8 billion in infrastructure funding disbursements.
The result is a suspension of all general obligation bond-approved capital construction projects in the state, including the new College of Business Administration building at Cal Poly Pomona and a number of smaller projects on campus. The new business building was scheduled to break ground on Jan. 22, 2009. This decision will not impact the second phase of the Residential Suites project, which is funded through a CSU system revenue bond.
Cal Poly Pomona will also temporarily lose funding to support the library addition and renovation, science equipment, seismic renovation and improvements to the telecommunications infrastructure. Across the state, the decision affects major local and statewide transportation projects, levee work and new classrooms. Hundreds of thousands of workers across the state, including highway contractors, subcontractors and suppliers, will be affected.
“This is very disappointing news for our community, as well as every other impacted organization in the state,” said University President Michael Ortiz. “While we remain optimistic that this problem can be resolved in the coming months, the fact remains that the temporary suspension of these infrastructure projects derails growth, slowing down the construction industry and harming other professionals that are vital to our economic recovery.”
The Chancellor's Office has notified all campuses to begin an emergency suspension and shutdown of state-funded design and construction projects, effective Jan. 1, 2009. All scheduled projects will be revived once funding has been identified.
The PMIB is comprised of the state treasurer (chair), the state controller, and the director of finance. Responsibilities include designing an effective cash management and investment program to realize maximum return through safe and prudent investments of the state's idle money as well as designating the amount of money temporarily available for investment.
Cal Poly Pomona's $34 million business building project, to be located adjacent to the Rose Garden, will add more than 75,000 square feet of space to the college. It was scheduled for completion by winter 2011.