On April 14, 2023, the Office of the Controller conducted a training via MS Teams for GASB 94 Public-Private and Public-Public Partnerships and Availability Payment Arrangements and GASB 96 Subscription-Based Information Technology Arrangements.  Attached is the slide deck for the GASB 94 and 96 training. The Q&A of the session can be found below.

Questions and Answers

1) On Slide #10, regarding the capitalized expense of the initial implementation stage, is it for internally generated software only? Does this not apply to the lease of IT software with 3rd parties?

Stage 2-initial implementation stage capitalization applies to both internally generated software and subscription-based IT arrangements (SBITA). SBITA picks up the element from GASB statement (GASB51); therefore, both internally generated software and SBITA from 3rd parties follow the same rules and the same city’s policies and procedures.

2)  For Worksheet Column #10, under “Contract Num”, should we use the PeopleSoft ID or the department's internal contract ID? 

Yes, if you have PeopleSoft contract ID, please enter it in Column #10. If you have any other reference contract ID to track, please enter it in the #26 Comment section or add a new column at the end of the worksheet.

3) For GASB 94, can you please provide some examples of any CCSF city departments you are aware of? Would it be possible to provide an example of PPP for the City?

I do not have information to show if our City has any Public-public and public-private partnership arrangements or availability payment arrangements; however, I found some other examples:

Some common PPP or APA include toll roads, bridges, airport terminals, public transit, parking structures, hospitals, and certain student services at colleges/universities including housing, sports facilities, jails, wastewater treatment, and museums.

 Examples:

  1. County A owns vacant land and enters an arrangement with City B to build and operate a public recreational facility (provide public services) for a period of 20 years. City B can rent the facility out for public and private recreational use or use for any other lawful purpose. County A will have no say over the prices charged by City B. County A will be compensated and receive fixed payments from City B according to the arrangement.  City B will own the facility until the end of the arrangement, at which time it is required to transfer ownership back to County A. This arrangement is a PPP.

 

  1. County A enters into a design-construct-maintain-operate agreement with Company B for a recreational facility. Under the terms of the contract, County A will pay Company B $700K per month for each month during the 20-year term during which the recreational facility is fully operational as defined in the agreement. County A will own the facility once it is placed into service. County A makes all decisions regarding the manner, days, and times of use of the facility and fees charged for private use, public admission, and concession; Company B remits all collections to County A.  

 

The $700K per month covered Company B’s overhead, profit, maintained, and County A’s financed purchase of the facility.

 

This is an example of APA. Not a PPP because the operator (Company B) is not compensated by collecting fees based on level of usage or revenue from the use or operation of an underlying asset.

Some types of arrangements that could be subject to GASB 94 (PPP or APA):

  • The City enters into an agreement with a developer/3rd party to design/build/operate the construction of a building (could be leased) for a period of time.
  • The City enters into an agreement with a developer/3rd party to design/build/operate the construction of a parking garage for a period of time.
  • The City enters into an agreement with a developer to oversee/manage the construction of a building and when completed the building ownership transfers back to the City.

 


Additional Questions?

Please contact your Fund Accountant if you have additional questions.