are disbursed. Figure 12 summarizes the total assets by major component at September 30, 2019.
PP&E is the AOC’s largest asset, representing over 66 percent of total assets. PP&E, net of accumulated depreciation, equaled near $2.3 billion at fiscal year-end, an $89 million increase from the FY 2018 balance. The increase in PP&E from the prior year is primarily due to the capitalization of construction project improvements, net of depreciation expense. Major capitalized improvements included Phase 1 of the Cannon Renewal Project ($153 million), the Rayburn House Office Building Garage Interior Restoration ($31 million), the House of Representatives Child Care Center ($16 million) and the Russell Exterior Envelope Project ($13 million). Figure 13 summarizes the PP&E balances by asset class at September 30, 2019. The largest asset class of AOC’s PP&E balance is building improvements ($1.2 billion, 52 percent of total PP&E). The majority of the AOC’s building portfolio is made up of historic buildings whose ages exceed the standard 40-year accounting useful life and most of the original costs of the buildings are fully depreciated. The remaining balance sheet value is in improvements. This category is followed by buildings ($631 million, 28 percent) and construction work-in-progress ($222 million, 10 percent). In FY 2019, the largest construction work-in- progress projects included Phase 2 of the Cannon Renewal Project ($28 million), the Rayburn Building Security Window Installation ($15 million), the U.S. Capitol Building Exterior Stone and Metal Preservation Project ($15 million) and Phase 2 of the Senate Underground Garage and Landscape Restoration ($14 million). The AOC expects the PP&E balance to continue to increase in future years due to capital cost accumulations related to the Cannon Renewal Project and various campus restoration projects.
The remainder of the AOC’s assets are comprised of investments, accounts receivable, retail inventory held for sale in the CVC gift shops and other assets such as travel advances. Investments are composed of two primary instruments: the Capitol Visitor Center Revolving Fund held with the U.S. Department of Treasury (near $25 million) and an escrow balance held with the public related to the Thurgood Marshall Federal Judiciary Building3
(near $11
million). Total investments equaled $35 million, representing a net increase of $2 million, or 6 percent from FY 2018. This increase is primarily a result of increased Treasury security holdings (and the corresponding investment income earned) from monies received from sales by the CVC gift shops, net of expenses and commissions
3
The AOC’s investments include funds held by a trustee outside of the U.S. Department of Treasury as a result of financing the construction of the Thurgood Marshall Federal Judiciary Building. Congress did not appropriate funds for this building’s construction but, instead, authorized the use of private financing to cover its cost. In 1989, the AOC entered into a development management agreement with Boston Properties for its design, development and construction. Shearson Lehman Hutton, Inc. and Kidder, Peabody, & Co., Inc., issued 30-year Serial Zero Coupon Certificates of Participation to finance the construction. Pursuant to a Trust Agreement, the proceeds were received by a trustee, The United States Trust Company of New York (now the Bank of New York Mellon). The Operating Reserve Fund is held in reserve to cover the future renovation needs of the building.
2019 PERFORMANCE AND ACCOUNTABILIT Y REPORT
FIGURE 13 Net PP&E by Asset Class
Construction Work-in-Progress $221.0 | 9.8%
Land Improvements $48.6 | 2.2%
Land $169.2 | 7.5%
Other $14.6 | 0.7%
Buildings $630.8 | 28.0%
Building Improvements $1,166.6 | 51.8%
Total PP&E: $2,250.8 ($ in Millions)
from vendor food service operations at the Capitol Cafe. The CVC Revolving Fund investments are first available for the operation of the gift shops and — after consultation with the appropriate oversight committees — any remaining funds may be used for the operation of the CVC. The escrow reserve fund supporting the Marshall Building may be used for renovations to that facility.
The annual trend in the AOC’s total assets for FY 2014 through FY 2019 is presented in Figure 14. As displayed, the total assets increased by $772 million, or 30 percent, over this period. This increase is principally the result of a $429 million (24 percent) increase in general property, plant and equipment (net of accumulated depreciation) and a $343 million increase (46 percent) in the fund balance with Treasury (FBWT). The largest single component of the FBWT increase is related to the appropriations designated for the AOC’s House Historic Buildings Revitalization Trust Fund. Since FY 2014, Congress has enacted more than $187 million in appropriations to support the revitalization of major historic buildings and assets of the U.S. House of Representatives, which the AOC is responsible for maintaining and preserving. Multiyear/no-year appropriations to the AOC’s jurisdictions make up the remaining component of this FBWT increase. The AOC uses multiyear and no-year appropriations to fund many of its long-term construction projects. The agency’s FY 2016–FY 2019 budgets each included $62 million in direct appropriations for the restoration and renewal of the Cannon House Office Building. The general property, plant and equipment increase was a result of the capitalization of multiple large construction projects over this period, including the U.S. Capitol Dome restoration, Phases 0 and 1 of the Cannon Renewal Project, the cogeneration plant and multiple stone restoration and preservation projects.
Management’s Discussion and Analysis • Section I 33
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