the financial records for claims where the estimated amount of potential loss is less than $100 thousand or where the likelihood of an unfavorable outcome is less than probable. During the current and prior year reporting period there were no reported cases that met this criteria.
Matters for which the likelihood of an unfavorable outcome is less than probable but more than remote involve a wide variety of allegations and claims. These matters arise in the course of carrying out AOC programs and operations. The ultimate outcomes in these matters cannot be predicted at this time; however as of September 30, 2019, the lower and higher level estimate of these cases are $500 thousand and $9,400 thousand, respectively. Sufficient information is not currently available to determine if the ultimate resolution of the proceedings, actions, and claims will materially affect AOC’s financial position or results of operations. Based on the less than probable nature of these claims, an accounting entry for the estimate was not posted and there is no impact on the financial statements.
Environmental Cleanup Cost Liabilities Related to Asbestos Cleanup The AOC is responsible for managing and/or abating friable and non-friable asbestos-containing materials (ACM) in all Capitol complex buildings owned by the federal government. Pursuant to the Federal Accounting Standards Advisory Board (FASAB) Technical Bulletin 2006-1, Recognition and Measurement of Asbestos-related Cleanup Costs, AOC recognizes a liability for cleanup costs that are both probable and reasonably estimable. This liability is founded on “per square and linear foot” cost indexes (based on current industry guidance for asbestos cleanup projects) which are then applied to recorded quantities of ACM to derive a total estimated liability.
Actual cleanup costs may differ from the recorded estimate due to additional cost factors that are, at this time, not reasonably estimable. For example, there may be an additional difficulty factor associated with AOC projects due to the unique working conditions on Capitol Hill. Additionally, containment (room or area) for asbestos abatement is a required work element that is not reasonably estimable at this time. Due to the uniqueness of individual project requirements, there is not enough information to determine the type of, and how much containment would be required. The AOC has determined the lower level estimate of potential containment cost could be up to $98.5 million.
Fort George G. Meade, Maryland In addition to the requirements of Technical Bulletin 2006-1, AOC is subject to various federal, state, and local environmental compliance and restoration laws. Applicable laws include the Clean Air Act; the Clean Water Act, the Solid Waste Disposal Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
114 Section III • Financial Information
Management’s review concluded that AOC is not responsible for the clean-up and remediation of previous environmental contamination on the approximately 100 acres of land at Fort George G. Meade, Maryland, which the U.S. Army transferred to AOC. The Army is responsible for the environmental clean-up of any previous contamination under CERCLA. The AOC understands that the Army is actively monitoring existing contamination on the entire site, including the land transferred to AOC, and is pursuing appropriate remediation of this contamination.
Future Funded Energy Contracts The Energy Policy Act of 1992 authorized the use of private sector financing to implement energy conservation methods and energy-efficient technologies by Federal entities. These contracts provide technical services and upfront project financing and allow federal agencies to pay off the project costs over a period not to exceed 25 years. Per Office of Management and Budget (OMB) Memoranda M-98-13 and M-12- 21, obligations, budget authority and outlays for these energy savings projects will be recognized on an annual basis when due, rather than recording the full obligation upfront.
With approval from Congress, AOC has partnered with private energy service providers for Energy Savings Performance Contracts (ESPCs) in the Capitol Building, House Office Buildings and Senate Office Buildings jurisdictions. In accordance with OMB guidance, the total capital costs for AOC’s energy savings projects are obligated on an annual basis, as per the payment schedule specified in each individual contract. These projects play an important role in AOC’s strategy to reduce energy consumption by 30 percent within 10 years.
The ESPCs have helped AOC complete conservation measures by way of:
converting from pneumatic to direct digital heating, ventilation and air conditioning (HVAC) control and upgrading building automation
retrofitting existing light fixtures with high-efficiency lamps, ballasts, controls and reflectors; installing LED lighting in hearing rooms and expanding the lighting control rooms
upgrading transformers to high-efficiency models
adding removable insulation covers to reduce heat loss from steam valves
replacing aged air handling units with new energy efficient units
replacing failing and defective steam traps and valves to eliminate steam loss and waste
installing new motion/occupancy sensors in areas with infrequent and low occupancy levels
ARCHITECT OF THE CAPITOL
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