2016 Capital Budget Instructions Published: June 6, 2014 1|Page Table of Contents Overview ....................................................................................................................................................... 4 How do I Get Started?................................................................................................................................... 5 Highlighted Bonding Considerations for 2016 .............................................................................................. 6 Qualified Capital Expenditures .................................................................................................................. 6 Moving and Relocation Expenses .............................................................................................................. 6 Private Use of Facilities .............................................................................................................................. 6 Solar Energy Systems ................................................................................................................................. 6 Key Milestones and Deadlines ...................................................................................................................... 8 2016 Capital Budget Submittals .................................................................................................................... 9 Capital Budget Guidelines ........................................................................................................................... 10 Minimizing Square Footage ..................................................................................................................... 10 Charting the Future ................................................................................................................................. 10 2014 Capital Bonding List............................................................................................................................ 11 2014 Capital Projects in 2016 Request .................................................................................................... 11 Possible 2015 Capital Bonding Request ...................................................................................................... 12 Types of Capital Projects ............................................................................................................................. 13 Higher Education Asset Preservation and Replacement (HEAPR) ........................................................... 13 Eligibility .............................................................................................................................................. 13 HEAPR Project Submittals ................................................................................................................... 13 Considerations for HEAPR projects ..................................................................................................... 14 HEAPR Thresholds ............................................................................................................................... 14 Major Capital Projects ............................................................................................................................. 15 Initiatives or Projects less than $2 million ............................................................................................... 15 Funding Request Threshold ........................................................................................................................ 16 Capital Project Scoring ................................................................................................................................ 17 Financial and Budgetary Considerations..................................................................................................... 18 Sources and Uses of Funds ...................................................................................................................... 18 2|Page Funding Sources .................................................................................................................................. 18 Multiple sources of funding ................................................................................................................ 18 Inflation Assumptions .............................................................................................................................. 18 2016 Capital Budget Submittals .............................................................................................................. 20 Hiring a Consultant for a Predesign ......................................................................................................... 20 Predesign Review..................................................................................................................................... 20 System Office Review and Feedback .................................................................................................. 21 Project Narrative and Costs Summary ..................................................................................................... 21 Reference Links ........................................................................................................................................... 23 2016 Capital Budget Guidelines (Board of Trustees):.............................................................................. 23 Charting the Future: ................................................................................................................................ 23 Predesign RFPs, predesign guides and review forms ............................................................................. 23 Building Project Inflation Schedule.......................................................................................................... 23 Contacts ...................................................................................................................................................... 24 Appendix A: Schedule of Capital Budget Process ................................................................................... 25 Appendix B: DRAFT Scoring Instrument with Annotations...................................................................... 28 Appendix C: .............................................................................................................................................. 37 2014 Capital Bonding List – Final Results ................................................................................................ 37 Appendix D: Statute Requirements For Projects Receiving State Funding ............................................. 38 Appendix E: .............................................................................................................................................. 39 What is the Composite Financial Index? ................................................................................................. 39 3|Page Overview This document outlines the general requirements and deadlines required of campuses to submit a 20162021 capital budget request. This process began with the Board of Trustees establishing capital budget guidelines, kicking off a two year process that includes solicitation of projects from the campuses, capital project scoring and ultimately bringing an approved list to the Board and through the legislative process. The capital budget is approved by the Board of Trustees in June of each odd number year prior to a scheduled capital bonding session at the state legislature. The 2016 Capital Budget request will be considered by the Board in June 2015. A capital project is any non-recurring capital expenditure for the acquisition, construction or improvement of a permanent facility, and includes: Real property acquisitions New construction (whole building, building additions and infrastructure) Renovation of existing facilities to make program or code improvements Repair and renewal of building systems in existing facilities The capital planning process recognizes that major capital projects can span several biennia from start to finish. In the 2016 request, project information will be requested for 2016, and campuses will be asked for estimates for 2018 and 2020 bonding years. A schedule (Appendix A), Scoring Form with Annotations (Appendix B), Statutory Requirements Matrix (Appendix C), and Explanation of the Composite Financial Index (CFI) (Appendix D). These instructions may be updated from time to time. Updates will be published and circulated as supplements to the originally published instructions. 4|Page How do I Get Started? Review your master facilities plan Assemble and review past project documentation o Predesigns o Past capital project narratives or spreadsheets o Legislation funding earlier phases of a project Collect and assemble core facilities data: o 2014 Building gross square footage o 2014 Facilities Condition Index o 2014 Backlog and 5 year renewal amounts o Space utilization rates from Spring and Fall 2014 in EMS Campus o Energy consumption and cost trends for the last 3 years o Institution’s repair and replacement spending in cost per square foot for last 3 years Collect and assemble other key data: o General Enrollment Data and Trends FYE (FY12-14) (Credit) Headcount (FY12-14) Credit and Non-Credit Full time / Part Time Enrollment Enrollment - % Students of Color Average age of student o Financial Data and Trends Composite Financial Index for FY11-13 If applicable: Financial Recovery Plan Status Debt service FY12-14 o Academic Data Program descriptions for areas to be impacted by project Program enrollments Degree / award attainment overall institution and for the program FY12-14 5|Page Highlighted Bonding Considerations for 2016 Qualified Capital Expenditures General obligation bond proceeds may only be used for qualified capital expenditures. Eligible costs include land acquisition, predesign, design, construction, major remodeling (if it adds to the value or life of a building and is not of a recurring nature), and other improvements or acquisitions of tangible fixed assets of a capital nature. General operating expenses, overhead, master planning, maintenance, operating costs, software and personal Although capital eligible, the system property such as computers are not qualified capital requires campuses to fund predesign expenses. Equipment may be eligible if purchased and costs out of their operating budgets. installed upon initial acquisition and construction of a building, expansion or major remodeling. Expenses that are not qualified capital expenses must be paid from funds other than general obligation bond proceeds or from general fund cash if not prohibited by law. The system may use bond proceeds only for direct capital costs and not for depreciation, amortization, overhead, general administration or similar costs. Moving and Relocation Expenses Minnesota Management & Budget (MMB) adopted a policy that bond proceeds cannot be used for moving and relocation expenses. This took effect after the 2012 capital bonding bill, and is retroactive to past bonding appropriations. Costs expected to be incurred for moving and relocation of equipment, furnishings and technology should be accounted for in the college or universities operating budget and be available when a project is funded. Private Use of Facilities MnSCU capital appropriations traditionally are funded by tax exempt general obligation bonds issued by the State of Minnesota. As a result, these projects are subject to tax compliance policies and procedures regarding private use established by the Internal Revenue Service. To ensure compliance with IRS codes and to structure our capital budget request appropriately, campuses must identify space that they expect to include for non-governmental partners, including the federal government. Any arrangements with a non-governmental partner using space in one of our projects must be for a public purpose and must be necessary to accomplish a governmental program. Solar Energy Systems Minn. Stat. §16B.323, enacted in the 2012 omnibus bonding bill, Laws 2012, ch. 293, sec. 32, provides that “a project for the construction or major renovation of a state building, after the completion of a cost-benefit analysis, may include installation of ‘Made in Minnesota’ solar energy systems of 40 kilowatts capacity on, adjacent, or in proximity to the state building.” A “state building” is defined as a building whose construction or renovation is paid wholly or in part by the state from the bond proceeds fund, and thus does not mean only buildings owned by the state. 6|Page Additional considerations for solar energy systems The cost of the solar system must not exceed 5 percent of the appropriations from the bond proceeds fund (i.e. Total Project Cost) for the construction or renovation of the state building. Purchase and installation of a solar thermal system may account for no more than 25 percent of the cost of a solar system installation. 7|Page Key Milestones and Deadlines The list below highlights the major milestones and deadlines for the 2016 capital budget process. The complete schedule is contained in Appendix A. 2014 2015 2016 June – September Campus provides preliminary project request Campus hires predesign architect Create / update predesigns August 1 50% predesign submittal due to system September 12 95% predesign submittal due to system\ October 10 Final narrative and spreadsheets due to system October 13-24 Predesign presentations November Scoring teams appointed December Final predesigns/preparation for scoring January 5-6 Capital project scoring (location TBA) January – May 2015 legislative session February – April Review scoring and evaluate for Charting the Future May – June Board of Trustees meetings June Board approves 2016 capital budget request July System makes request to state of Minnesota February Legislative session begins 8|Page 2016 Capital Budget Submittals To be considered for inclusion in the 2016 capital budget process, campuses must provide a complete submittal, which includes: Predesign. Following MnSCU predesign guidelines, a predesign document describing the specific project request, including the scope, schedule and cost. Project narrative. High level summary describing the project, its impact on students, programs, square footage and reduction of backlog and overall cost to the campus. Cost details. Describes the comprehensive cost estimate and funding sources for the entire project and the expected impact on a campus’s operating expenses. Digital photographs. New for this year, campuses should submit 2-3 high quality, digital photographs of the areas to be improved by the proposed capital project. Photos should be at least 10 megapixels (3872 x 2592), 8-bit RGB high quality/lightly compressed jpeg. The pictures should be publication quality, as they may be used for the system’s capital bonding book, scoring, and capital budget presentations. Unless these materials are provided and within established timelines, the project will not be included in the 2016 capital budget request. 9|Page Capital Budget Guidelines The Board of Trustees approved the 2016 – 2021 capital budget guidelines in March 2014, which establish the general rules and priorities on how capital projects will be evaluated and prioritized. The guidelines are grounded in three strategic principles, known as the Strategic Framework: 1. Ensuring access to an extraordinary education for all Minnesotans 2. Being the partner of choice to meet Minnesota’s workforce and community needs 3. Delivering to students, employers, communities and taxpayers the highest value/most affordable higher education option The capital budget process involves a scoring of capital projects by an appointed group of representatives from colleges, universities and system office personnel. The scoring tool uses the three Strategic Framework principles for evaluating a capital project in 2016. Further informing the scoring and prioritization of capital projects are four guiding values established by the Board for 2016: 1. 2. 3. 4. A strategic regional and statewide academic program focus Taking care of what we have Minimizing new square footage Building for the future with flexible and adaptable space Minimizing Square Footage The emphasis for 2016 will be on creating better – not necessarily bigger - space to serve students. Projects that shrink a footprint while improving the quality of instructional or student support space are preferred. Additional scoring criteria will be applied to projects that propose additional square footage for a campus. The Board’s goal is to put forth a 2016 capital budget request that reduces the overall net square footage of the system, but does not prohibit projects that propose the addition of new square footage where circumstances warrant. Charting the Future The early stages of Charting the Future work will be occurring at the same time as the 2016 Capital Budget is being developed and scored. The 2016 capital budget process is expected to incorporate – where possible - outcomes of Charting the Future implementation. Given the evolving nature of Charting the Future implementation, it is too early to tell what aspects of Charting the Future will inform the capital budget process prior to project scoring. As a result, the Capital Budget process will include time after project scoring for comparing the recommended list with Charting the Future goals and implementation. Capital projects may be adjusted in priority after scoring based on Charting the Future efforts and implementation. 10 | P a g e 2014 Capital Bonding List Minnesota State Colleges and Universities requested $286.5 million for its 2014 capital bonding request. Of that, the 2014 capital bonding bill approved by the legislature and signed by the governor totaled $159.8 million, including $42.5 million worth of HEAPR and $117.3 million in capital projects. 2014 Capital Projects in 2016 Request Carry forward projects are those capital projects that: 1. Partially Funded Projects. Were funded in the 2014 capital bonding bill and have their next phase planned for 2016, or 2. Projects on the 2014 list, but unfunded. Were in the Board-approved 2014 capital budget request, but were not funded in the final 2014 capital bonding bill All carry forward projects must make an updated Capital Budget Submittal, including updated predesigns. Having a carry forward project in the 2014 capital bonding request does not necessarily guarantee a spot on the 2016 list. Special Considerations Partially funded projects in 2014. Projects with multi-biennium funding requests that received their first phase of funding in 2014 (for design and/or design and partial construction funding) must carefully review the appropriation language in the law the authorized the project. A campus must work within the same scope of the project that was authorized in 2014. Unfunded Projects in 2014. Projects submitted to the legislature on the Board’s 2014 capital budget list, but not funded, must resubmit their projects for 2016. Campuses must provide an updated Capital Budget Submittal, and highlight any adjustments or modifications to their latest request. Unfunded projects from 2014 with substantial scope changes will be considered “new” for purposes of the 2016 scoring process. 11 | P a g e Possible 2015 Capital Bonding Request In the event the legislature and governor consider a supplemental capital bonding bill in 2015, the system will develop a bonding request based on previously approved and unfunded capital projects. Subject to Board of Trustees consideration and approval, system priorities for a 2015 request are: 1) HEAPR funding 2) Board approved projects that were not funded in the 2014 Capital Bonding bill, and possibly 3) Projects partially funded in 2014 Campuses will be asked for additional information prior to the 2015 legislative session if a bonding bill will be considered, which would include: 1) Current HEAPR project requirements 2) Current predesign or design documentation 3) Update on the cost of their project from the 2014 capital bonding request 12 | P a g e Types of Capital Projects Capital budget requests fall in three general categories: 1. Higher Education Asset Preservation and Replacement (HEAPR) - Repair and replacement of building systems, including roofs, heating, cooling, ventilation, building envelope, ADA and security upgrades, and utility upgrades. Minimum project value: $50,000. 2. Major Capital Projects – new, renovated or renewed permanent building improvements to serve an academic purpose. Project threshold: Value of more $2 million or more. 3. Initiatives or Small Capital Projects – new, renovated or renewed improvements to existing buildings that serve an academic purpose with a total project cost valued between $500,000 $1.99 million. Campuses may submit individual initiatives, which may be grouped together by region (i.e. metro, northeast, southwest) or subject matter (i.e. renewable energy, STEM, etc) for purposes of the capital budget request. Higher Education Asset Preservation and Replacement (HEAPR) HEAPR will be the system’s number one request in the 2016 capital budget. Each institution will be asked for their prioritized list of HEAPR priorities later this fall. Eligibility The goal of HEAPR funding is to provide a resource to campuses to continue to keep system facilities safe, warm and dry. State statute outlines the types of projects that qualify for HEAPR funding. They include: Code compliance including health and safety Americans with Disabilities Act requirements Hazardous material abatement Access improvement, or air quality improvement Building energy efficiency improvements using current best practices Building or infrastructure repairs necessary to preserve the interior and exterior of existing buildings, or Renewal to support the existing programmatic mission of the campuses HEAPR Project Submittals Each request for a HEAPR project shall be accompanied by the following details: 1. 2. 3. 4. Full scope of work, including specific impact on backlog and Facilities Condition Index (FCI). Comprehensive cost estimate by building system – HVAC, roof, exteriors, health, safety, and welfare. Include any hazardous material abatement estimates. Operational savings or costs – ongoing operating expenditures, in particular energy cost savings, and whether the campus has considered utilizing the Guaranteed Energy Savings program. Schedule 13 | P a g e 5. Options/alternatives that were evaluated. Considerations for HEAPR projects Generally, the system office will honor prioritized requests and distribute HEAPR appropriations across a broad geographic area, targeting the highest priority projects by institution. The system will consider the following five factors when prioritizing overall system-wide HEAPR requests: 1. Safety and security. Immediate threat or harm to the safety of students, faculty, and staff 2. Code, compliance or identified obligation. Imminent enforcement actions or fines for failure to comply that can’t otherwise be covered by campus operating funds 3. Imminent facility system failure. Where there is no suitable back up option and failure will directly halt or severely impact space or operations 4. Integral part of state system need and leverages other funds. For example, if the federal government issued grants in support of energy efficiency projects 5. Part of a key partnership or collaboration effort. When considering a HEAPR request, the system will also weigh the following: 1. 2. 3. 4. 5. A campus’s past spending and encumbrance patterns of prior HEAPR projects Adequacy of submittal documentation Facilities Condition Index of the campus and building where work is proposed Past appropriations of HEAPR to a campus Backlog per square foot HEAPR Thresholds The following list below describes the dollar thresholds and the required submittals to the system office for HEAPR projects submitted for the upcoming cycle. $50,000 $50,000 – $99,999 HEAPR project minimum (new this year) HEAPR submittal form describing scope of work and a verifiable cost obtained, for example, through consultation with contractor experienced in the work. The HEAPR submittal shall include: Description of project Rationale for why is project needed FCI of building where work will occur and estimated reduction What will happen if project is not funded $100,000 - $999,999 Same as the above threshold, but adds: Engineering study and cost estimate from a reputable firm Evaluation of whether this project would be a candidate for the guaranteed energy savings program For multiple or complex projects Engineering predesign study is required Engineering predesign should include prioritization of multiple HEAPR project requests from an institution 14 | P a g e $1,000,000+ Complex project means multiple systems impacted (i.e. Energy Management system, major HVAC with roof impacts) Engineering predesign is required Major Capital Projects Major capital projects are requests for funding of design and/or construction to improve permanent academic building space where the total project cost is at least $2 million or more. Capital projects can be new or carry forward from the previous capital bonding cycle, and include the Capital Budget Submittal materials as described above. The key points of emphasis for major capital projects include: Addressing regional or statewide academic program needs, especially ones that can addresses multiple campus needs (such as consolidated science labs or clinical training space) in one project. Taking care of what we have by integrating HEAPR-like work into major capital projects, such as including the cost to replace a roof underneath an area to be renovated or upgrading campus utilities as part of the major capital project to ensure sufficient energy capacity in the future. Integrating a reduction in total square footage. This may include demolition with replacement of a smaller, more efficient building or renovation of existing space that incorporates a demolition component. Integrating flexible and adaptable space solutions, such as modular furnishings, technology to enhance learning experiences, or rooms that can be converted to other uses with minimal work. Initiatives or Projects less than $2 million Initiative projects are smaller projects of $2 million or less that improve academic buildings. The goal of initiative projects are to target smaller, but still high value improvements, that will enhance the learning environment, renovate obsolete space, and integrate sustainable systems in our facilities. The requirements of initiative projects are the same as major capital projects: predesign, narrative, cost summary and digital photographs. This year, the following four categories are encouraged for initiatives: 1. 2. 3. 4. Renewable Energy (solar, geothermal, biomass and wind) STEM upgrades (laboratory renovations and updates and trade spaces) Classroom upgrades (i.e. active learning classrooms) Charting the Future Pilot Projects (TBD) 15 | P a g e Funding Request Threshold Traditionally, design funding is sought in one biennium and construction is requested in the following biennium for projects above a certain threshold. This year: Total Project request of $5 million or less. May request design and construction funding in one biennium, provided that the full project can be completed within two years of receiving appropriations. Total projects request more than $5 million in total cost. Should request design funding in 2016 and construction funding request in a subsequent biennium. 16 | P a g e Capital Project Scoring Major capital projects and Initiatives are subject to a scoring process involving presidentially-appointed representatives from nearly all universities and colleges. These representatives come together for a scoring session that is scheduled for early January 2015. Representatives are assigned groups that discuss and score 6-8 capital project submittals each. Scoring groups are designed to have members of diverse (rural/urban), type of institution HEAPR projects are not scored geography (college/university), and job disciplines (academic, student in the capital project scoring affairs, finance, facilities, IT). No representative scores a event project from their own institution. Capital project scores are tabulated and rank ordered to help create a recommended capital budget list for the Chancellor’s consideration. The Chancellor reviews the list and may adjust the list to reflect Charting the Future implementation goals, a 2015 capital bonding bill, or other emerging issues that may have bearing on the project priorities. After Chancellor review, the list is prepared for recommendation to the Board of Trustees for their review and approval. Scoring criteria organized around the Strategic Framework integrates the guiding principles from the Board’s capital budget guidelines. A draft scoring sheet and criteria is found in Appendix B. This year, three core considerations are included to begin the scoring criteria and campuses with project that satisfy these will receive 10 points each: 1. 2. 3. Project will result in a net reduction in square footage when completed Project was funded on the 2014 Capital Budget list or on the 2014 list approved by the Board of Trustees Project will be utilized by two or more campuses when completed 17 | P a g e Financial and Budgetary Considerations Sources and Uses of Funds Capital budget requests require a full description the source of funding. The total project costs should be described in the source of funds, including any special conditions or financing that is being used to accomplish the project. Funding Sources In preparing your capital budget request, the campus will be required to describe the sources and uses of capital funding. The sources are: 1. General Obligation Bonds 2. Revenue Bonds 2. Agency Operating Funds 3. Federal Funds 4. Local Government Funds 5. Private Funds Most projects will use and request general obligation bonds. If the project includes a private use component, identify the amount attributable to this private use as this allows us to recommend an approach with MMB regarding the issuance taxable general obligation bonds. Taxable general obligation bonds may cost the campus more in total costs because interest rates may be slightly higher. Multiple sources of funding Campuses must identify multiple sources of funding in their capital budget request. Where other sources of capital funding are used, campuses must identify the: 1. 2. 3. 4. Type Amount Conditions to receipt of funds Schedule for delivery of funds Inflation Assumptions Inflation is an essential part of calculating accurate capital budgets. A cost engineer will typically calculate the cost of a building project based on prices available at the time the estimate is prepared. Through the cost planning process, the project is then placed in the assumed future time frame of project implementation. Based on forecasts of future trends in building costs, the project cost estimate is multiplied by an appropriate inflation factor to allow for this time shift. How Are Costs Inflated? The campus should first determine building project costs based on “today’s” present value. Present value is an estimate of the project cost for July 31, 2014. Present value is then inflated to the midpoint of construction based on the project schedule. 18 | P a g e The state’s capital budget process defines “midpoint of construction” as the date midway between the commencement date and the date of substantial completion. The “date of commencement” is the start of the construction period when construction forces arrive on the project site. “Substantial completion” is when progress of the work is sufficiently complete so the owner can occupy or utilize the work site for its intended purpose. Midpoint of construction is used because it most accurately represents the costs that contractors will use at the time of bid preparation. While it is true that many material costs are committed early in construction (e.g., fabricated steel), other material and labor costs are not locked in and will continue to increase until final completion. Some non-building items such as furniture, fixtures, and equipment may not be procured until the very end of the project. To find the appropriate inflation cost for a project, agencies should identify the month and year closest to the midpoint of construction and include that date in the Project Cost form. The Building Project Inflation Schedule current as of the publication of these instructions is April 2, 2013. MMB is scheduled to update their Building Project Inflation Schedule in spring 2015, well after capital project scoring occurs. Capital projects will be adjusted to reflect the updated inflation based on new MMB numbers. 19 | P a g e 2016 Capital Budget Submittals Hiring a Consultant for a Predesign Every project must have a current predesign. For projects that were already funded for design, an update to an existing predesign is required. Regardless of the scope of work, the following processes should be followed: 1. Consult the system’s master contract list found on the following web page for qualified architectural firms that offer predesign services (See #41 and #42) MnSCU Professional/Technical Contract list: http://www.finance.mnscu.edu/facilities/design-construction/pm_emanual/index.html Facilities P/T Consultants Master Contract List (NEW - Eff. 5/1/14) Facilities P/T Master Contract Instruction and Overview (rev 5/1/13) 2. Prepare a predesign RFP. A predesign RFP template is available for your use here: http://www.finance.mnscu.edu/facilities/planning-programming/predesign/ 3. Select at least 2-3 firms on the list to receive a proposal. Include at least one firm that is designated as a Targeted Group (TG) business. More details on Targeted Group/Economically Disadvantaged Small Business: http://www.mmd.admin.state.mn.us/mn02001.htm MnSCU Professional/Technical Contract list: http://www.finance.mnscu.edu/facilities/design-construction/pm_emanual/index.html (#41) 4. Enter into a professional/technical contract with the selected firm. http://www.finance.mnscu.edu/contracts-purchasing/contracts/forms/ (#5) 5. Use the Predesign Guide and Predesign Review Form for Academic Projects as a guide when preparing the predesign. http://www.finance.mnscu.edu/facilities/planning-programming/predesign/ a. Predesign Review Form for Academic Projects (August 2012). A feedback form used when Minnesota State Colleges and Universities evaluates predesign submittals for projects funded with capital appropriations or campus funded. b. Predesign Guide (July 2010). This provides campuses and consultants the Predesign Basics when preparing a predesign document for Minnesota State Colleges and Universities. Predesign Review 20 | P a g e After a consultant is selected by the campus and work begins, the system office reviews project predesigns at various stages of completion of the predesign document. The system’s Predesign Guidelines provide the framework for predesign organization. System Office Review and Feedback The campus and consultant shall submit versions of the predesign document when the document is approximately 50% and 95% complete. This is intended to ensure consistency in predesign submittals and to offer recommendations on how to improve the project submittal. 1. Submittal of 50% document. The 50% document should include core campus data, basic location of the project and estimated costs: Document is organized in a manner consistent with the Predesign Guidelines Basic summary of the project – scope, schedule and cost Identification of where the project is found in the campus master facilities plan Identification of academic programs impacted Identification of partners involved (3rd party or other MnSCU) Campus and building maps identifying general project area Data that the campus is using in support of the project, such as: Depending on timing of the submittal for the predesigns, allow at least 2 weeks for review and feedback from the system office. Given the substantial amount of submittals, if your campus misses the deadline, the system office cannot guarantee review and feedback on a project. 2. Submittal of 95% document: Predesign should be nearly complete and incorporate the feedback and recommendations from the system office’s 50% review. 3. New for this Year – a Predesign Presentation Shortly after predesigns documents are completed, the system office will schedule a short predesign presentation via Webex. The purpose is to: Close out the predesign process Offer recommendations on improvements Verify the project parameters Solicit any additional information outstanding for the project The participants include the system office capital development staff, Associate Vice Chancellor for Facilities and other staff members (i.e. academic affairs or ITS) as projects and needs dictate. Project Narrative and Costs Summary Campuses are required to submit Project Narratives and Cost Summaries in a new Excel workbook format. This change is being made to respond to updates to the State of Minnesota’s capital budget request system and feedback on the details needed by the legislative staff and legislators when making capital budget decisions. 21 | P a g e The goal of the project narrative and cost summary is to summarize the major components of the project. Think of this as your primary sales tool for your project, as this description and information will be relied on when submitting the project for formal consideration during scoring, for bonding book details, and ultimately to the State of Minnesota when the legislature and annotated narrative and cost spreadsheets are contained in the Appendix. 22 | P a g e Reference Links 2016 Capital Budget Guidelines (Board of Trustees): http://www.mnscu.edu/board/materials/2014/march19/fin-03-guidelines.pdf Charting the Future: http://www.mnscu.edu/chartingthefuture/ Predesign RFPs, predesign guides and review forms http://www.finance.mnscu.edu/facilities/planning-programming/predesign/ Predesign RFP Template. For use when seeking to hire a predesign architect or firm to assist the campus with preparing a predesign and submitting a capital project request. Predesign Guide (July 2010). This provides campuses and consultants the Predesign Basics when preparing a predesign document for Minnesota State Colleges and Universities. Predesign Review Form for Academic Projects (August 2012). A feedback form used when Minnesota State Colleges and Universities evaluates predesign submittals for projects funded with capital appropriations or campus funded. Building Project Inflation Schedule http://www.mmb.state.mn.us/doc/budget/bud-cap/12/inflation.pdf. 23 | P a g e Contacts Gregory Ewig, Director, Capital Development Gregory.ewig@so.mnscu.edu 651.201.1775 Lisa Jansen, Senior Planner, Capital Development Lisa.jansen.@so.mnscu.edu 651.201.1788 24 | P a g e Appendix A: Schedule of Capital Budget Process Due Date Description Responsibility June 6, 2014 Send email to Campuses notifying FY2016 - 2021 Capital Budget Request is starting and defining expectations. (include Charting the Future, Strategic Framework, and Guidelines) System Office June 9, 2014 Campuses start to prepare RFPs to hire consultants to work on predesign Campus June 13, 2014 Send Project Narrative and Cost Workbook to campuses Additional Information System Office In Excel format July 3, 2014 Campuses submit FY2016, FY18 and FY20 project titles and cost estimates to system office Campus Consultant required to work on the Predesign July 18, 2014 Campuses review backlog and renewal data; begin studies for FY16 HEAPR projects Campus Consultant may assist. 50% Predesign Request Document Due to System Office Campus Preliminary project narrative and cost spreadsheets due (Draft) to System Office Campus August 4, 2014 August 15, 2014 Review 50% submittal. Conference call may be required System Office Email campuses with date of conference calls August 15, 2014 Send 50% Predesign document and Narrative comments to campuses System Office Fall semester starts on August 25, 2014 September 3, 2014 HEAPR Submittal form sent to Campuses System Office September 12, 2014 95% Predesign Request Document Due to System Office August 1, 2014 Campus 25 | P a g e September 15, 2014 Review 95% Predesign document September 26, 2014 System Office Send 95% Predesign document September 26, 2014 comments to campuses; preliminary HEAPR requests due from campuses System Office 100% predesign (final) document Campus Final Narrative and spreadsheets due to system office Campus October 10, 2014 October 13, 2014 - Predesign Presentation to Capital October 24, 2014 Development (System Office) Email campuses System Office, Campus with date of conference calls October 24, 2014 System office sends requests to campus presidents to nominate scoring team members System Office October 31, 2014 6-year capital plan developed - high level - (FY16, FY18 & FY20) System Office Develop debt service / CFI impact with November 3, 2014 new capital projects (include in scoring) System Office Campuses receive updated feedback November 7, 2014 on predesigns, narratives, and spreadsheets System Office November 10, 2014 - Prepare Scoring Package and create November 26, 2014 Project Teams November 21, 2014 50% HEAPR documents due to System Office Scoring Package available to Scoring Teams (Narrative and spreadsheets); December 3, 2014 copy of predesigns to be made available electronically System Office Campus System Office December 3, 2014 Campuses review scoring package January 5, 2015 Campus Prepare Project Analysis sheets for December 8, 2014 FY2016 Capital Budget Request December 22, 2015 projects System Office Upload to SharePoint 26 | P a g e January 5-6, 2015 January 2015 January 31, 2015 February 2015 March 2015 Scoring of FY2016 Capital Projects Location TBA System Office Campus Tabulation and Analysis of Scoring FY2016 Capital Projects Consultation with Chancellor System Office 100% HEAPR documents due to system office Campus Leadership Council reviews preliminary results System Office Evaluation of capital project list; identification of projects that align with Charting the Future Capital Request FY16 to the Leadership Council (includes FY18, FY20 prelim projects) Capital Bonding Request, First Reading May 2015 June - July 2015 Capital Bonding Request, Second Reading First meeting on bonding book creation Submit Board approved FY16 capital bonding request to MMB - BPAS system System Office System Office System Office System Office System Office July - August 2015 Bonding Book created and published System Office August-November Capital bonding tours, visits and 2015 presentations System Office Campus October 2015 BPAS system locks capital budget request January 2016 Governor presents bonding recommendation February 2016 Legislative session begins May 2016 State of Minnesota Legislative session ends 27 | P a g e Appendix B: DRAFT Scoring Instrument with Annotations INSTITUTION and CAMPUS: PROJECT TITLE: PROJECT TYPE: Major Capital Project Initiative PROJECT SQ. FT: NEW: RENOVATE: RENEW: DEMOLISH: Core commitments in the Strategic Framework for capital planning in FY2016-2021 are: Ensure access to an extraordinary education for all Minnesotans Be the partner of choice to meet Minnesota’s workforce and community needs Deliver to students, employers, communities and taxpayers the highest value/most affordable higher education option 0.5 Preliminary Considerations Strategic Framework Elements No Yes 1 Project will result in a net reduction in square footage when completed 0 10 Insert expected net reduction in square footage 2 Project was funded on the 2014 Capital Budget list or on the 2014 list approved by the Board of Trustees 0 10 10 points if the legislature funded the project on the 2014 (or prior) list; 5 points if the project was on the list, but unfunded by the Include the priority number from 2014 list 3 Project will be utilized by two or more campuses when completed 0 10 Identify the other campus(es) involved TOTAL POINTS: (Max: 30 points) Subtotal 1.0 Ensure access to an extraordinary education for all Minnesotans: Projects must reflect alignment in academic and facilities planning, support state and regional academic programming and collaboration, target long term space requirements on a regional basis, enhance facilities that support and improve access for traditionally underrepresented students with emphasis on how the project enhances student success. Projects shall have evidence that they: Strategic Framework Elements 1.1 Comments that justify your score Aligns campus facilities, technology and academic planning and shows coordinated campus priorities n/a Low 0 1 Ave 2 High 3 4 Guidance on Documentation needed for Low – Ave – High score Low – no evidence provided by campus that project aligns between academic, technology and facilities planning; project is not in facilities master plan or 5 master plan update Ave – project identified in facilities master plan, but no indication of coordination with 28 | P a g e Target regional and state academic priorities, such as STEM, transportation, manufacturing, technology, energy, healthcare, agriculture and engineering 1.2 0 1 2 3 4 5 0 1 2 3 4 5 Meet long-term space requirements for programs on a regional and multi-regional basis for programs including single institution, multicampuses 1.3 academic or technology plans High - description of project makes clear that a coordinated effort made in facilities, academic and technology plans and project priority is aligned; campus provides examples of process and how this project was determine to be a priority Low – project is campus specific and does not apply to a regional or statewide academic priority; little to no description or evidence of how project meets regional or state academic program needs Ave – targets statewide academic priorities in STEM, transportation, manufacturing, tech, energy, healthcare, agriculture and engineering; enrollment data and long term job outlook provided to support project High – Same attributes as Ave, but includes regional data supporting project’s specific academic target (enrollment, demographic trends for the specific region; employment prospects and placements; added staff requirements). Avoid use of general state or national statistics (i.e. “the need for nurses in the state is expected to grow 35% over the next decade…” Provide specific details on how this will enhance the ability to deliver programs. Low – no mention of long term viability of program or explanation of anticipated changes in employment needs; low enrollment in programs or no evidence of program and demographic / enrollment statistics to support project Ave – campus provides current statistics (enrollment trends, predictive models), including sources, and rationale to support program space; evidence that campus evaluated project with other campuses to determine whether combining programs and space is feasible High – Strong data or predictive analytics on enrollment and workforce need in support of long term space; campus may have evidence of lease that proved out need for long term space; campus incorporated space utilization statistics and why project is needed; preferred if project serves multiple institutions 29 | P a g e Encourage space that will improve access and success to traditionally underrepresented students, such as space that targets more individualized learning and advising 0 1.4 1 2 3 4 5 Include features that yield informal learning spaces and blur the line between traditional classroom learning and supportive collaborative, group learning methods 0 1.5 1 2 3 4 5 Be the partner of choice to meet Minnesota’s workforce and community needs: Projects will reflect partnerships with current and emerging workforce and community as partnerships and collaboration with the system. Projects shall have evidence that it will: Strategic Framework Elements 2.1 Low – project does not include this type of space or promotes traditional, tiered classroom or limited informal space Ave – incorporates features that support informal learning or “drop in” space; incorporates flexible furniture features High – same features as Ave, but features meet future teaching methodologies, such as active learning spaces and/or technology rich classrooms, modular, flexible furnishings; could be informal space that represent latest pedagogical thinking and learning; may be a blended project (classroom or labs) that adds drop in space or group study space TOTAL POINTS: (Max: 25 points) SUBTOTAL: 2.0 Charting the Future Dimension Low – project may not be directly related to improve access or success of underserved students; or, no mention made of how project will improve success of underrepresented learners Ave – evidence provided (such as institutional research, student surveys, etc) on how this project improves underrepresented students access or success High – Many of the same features as average, but project highlights features that support underrepresented students, such as space for additional tutoring, advising, computer labs, or other features that are necessary to support programs that will enhance support of traditionally underrepresented students; project focuses on features to improve access and reduce barriers to student learning or interaction with the campus Contribute to the delivery of programs that address continuing or emerging workforce and/or community needs n/a 0 Low 1 Ave 2 3 High 4 5 Guidance on Documentation needed for Low – Ave – High score Low – Project has no direct connection to programs that address continuing or emerging workforce or community needs Ave – Project describes connections between space and programs that address a workforce or community need; identifies how the project meets those needs, such as space for classrooms that 30 | P a g e Support and enhance STEM (science, technology, engineering and math) programs 2.2 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 Promote or increase retention, completion, and transfer within the MnSCU system 2.3 Produce space for applied learning to occur on campus 2.4 SUBTOTAL: support workplace solutions, applied learning space, clinics and other space that have a direct training or learning component High – Project has many of the attributes of Ave. project, but includes additional statistics in support of program delivery and how they will address workforce needs or has matching funds or other contributions (equipment) from non-state sources Low – Project does not include STEM programs or space Ave – Project proposes renovation of space in support of STEM programs; includes data points on space utilization and backlog reduction High – Same features as Ave, but includes further description on how the project builds capacity, addresses specific program need (i.e. reduce wait lists) and/or targets a need that cannot be met via other means Charting the Future Dimension Low – Project is not relevant toward increasing retention and completion or no documentation to support program targeting retention or completion Ave – Project adds student support space that is specifically targeted toward programs that enhance retention, completion and transfer (computer labs, student service areas for intrusive advising, etc.) High – Same attributes as Ave. project, but more comprehensive explanation and part of overall strategy for increase retention rates; campus provided goals and data in support of retention, completion and success Low – project has no applied learning component Ave – project has clinic or other space that allows students to participate in specific training on campus solving real world problems High – same features as Ave., but project explains process to incorporate a third party in project; third party contributes capital or other matching funds to the incorporates a third party; identification of private use component, if relevant TOTAL POINTS: (Max: 20 points) 31 | P a g e 3.0 Deliver to students, employers, communities and taxpayers the highest value/most affordable option: Projects will represent value through academic multi-purposing of spaces and improved utilization, energy efficiency, improved utilities or infrastructure, improved facility conditions/reduced deferred maintenance, and institutional financial stability. Projects shall have evidence that it will: Strategic Framework Elements n/a Low Ave High Advance cooperation among campuses to reduce costs and enable the sharing of administrative operations, academic programs, and academic support 3.1 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 Project prioritizes renovation and repurposed space to improve space utilization 3.2 Represent a ‘major’ reduction in deferred facility maintenance backlog and a positive impact on the FCI 3.3 3.4 Incorporates renewable energy systems in project for either academic or production purposes to reduce overall energy consumption Guidance on Documentation needed for Low – Ave – High score Low – recreates same or similar space within 10 miles of existing campus; space could be better accommodated using a technology solution or leased location Ave – leverages campus proximities and technology to consolidate space needs among 2 or more campuses in administrative, academic or academic support programs; project includes components that shares space (student support or other) with other institutions, resulting in direct student benefit and lower overall cost to the system as a whole High – Similar to Ave. project, but with additional detail among the campuses to explain the facilities and operational savings to be gained and how it will directly improve student’s interaction with the campuses. Low – Project requests new square footage, no or limited renovation Ave. – renovation and renewal project; uses enrollment and space utilization trends to support project request; reduces backlog for a campus building at least 10% High – renovation project with some demolition embedded in work; reduces backlog; targets classrooms or labs for enhancements that will improve space utilization, even if capacity is lowered Low – New square footage proposed. See additional Criteria in Section 4. Ave - Renovation. Reduces building or area with highest FCI High – same as Ave and substantially reduces highest backlog items identified on campus wide basis (i.e. roof, campus wide HVAC or electrical, etc.) Low – little to no mention in documentation of renewable energy incorporated in project Ave - project identifies renewable energy analysis, but does not meet payback within 20 years High – same as Ave, but project includes renewable energy in part of project (can be for production or for academic program) 32 | P a g e 3.5 3.6 3.7 Identify and, leverages alternative financing, such as the state’s Guaranteed Energy Savings Program in addressing backlog and renewal needs in lieu of seeking capital bonding Build in flexible and adaptable features, including room types, equipment and furnishings, that allow for cost effective adaptability of future programs Support evidenced by campus local investment in terms of sustained R&R rates 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 Minimize the need to create new or additional utility and support infrastructure 3.8 3.9 3.10 Represent a financially viable effort in terms of current and future campus financial position and Composite Financial Index (CFI) Identifies total operating costs required (including new staff, anticipated utility costs, and any additional specialized costs required as a result of the project) 0 1 2 3 4 5 SUBTOTAL: 4.0 Low – no description of new faculty, staff additions; energy costs or ongoing operational costs required for project Ave – describes and outlines projected operating costs (specific FTE); energy consumption expectation and reductions; High – No new operating costs or reduced operating costs expected over the long term TOTAL POINTS: (Max: 50 points) FOR PROJECTS ADDING NEW SQUARE FOOTAGE ONLY Consider the following criteria when new space is proposed: Strategic Framework Elements 4.1 Low – not included or no mention of alternative financing / matching funds Ave – identifies matched funds, but not expected to provide any more than 5% - 15% of total project cost High – project incorporates alternative financing Low – Special purpose space or tiered classroom limiting the ability of the space to be used for other purposes; space with fixed furniture is not preferred Ave – Allows for adaptable furnishings; technology is standard for the campus; Low – Campus invested less than $1.00 psf for last 2-3 years Ave – Investment averaged $1.00 psf for the past 2-3 years High – investment above $1.00 psf for past 2-3 years Low – new square footage proposed; requires own HVAC Ave – renovation with some updates to improve energy performance; reduces consumption expectations; current utility infrastructure can handle project High – may be a renewable energy project; or is a project that significantly decreases expected energy consumption of campus Low – Campus CFI is below 2.0 Ave – Campus CFI is between 2.0 – 3.0 High – Campus CFI is above 3 Verifiable evidence of enrollment demands and workforce needs that support n/a 0 Low 1 Ave 2 3 High 4 Comments that justify your score 5 Low – no evidence of enrollment increases; or, evidence of enrollment 33 | P a g e the need for new space Consideration of space needs that can be satisfied through short- or long-term methods, such as leasing off-campus space, or sharing space with other colleges and universities within the system 4.2 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 Evidence of partner contributions that support a portion of the construction and operating costs of the project 4.3 4.4 Specialized program or student needs that require construction of new square footage decrease in targeted service area; low space utilization; Ave – Evidence of enrollment increases in the program area that would be enhanced by new space; could not be addressed with leased space; workforce / verifiable evidence of graduate success High – enrollment demands coupled with specialized workforce skills, equipment or needs that cannot be fulfilled in existing space; outside partner provides equipment or other matching funds; does not significantly increase campus square footage Low – no discussion of alternative space solutions; no evidence of long-term solution to space problems Ave – discussion of alternatives to solving space by renovation of on campus space; evidence that campus leased space for this purpose and have enrollment to back up need for space on campus High – campus has proof of concept that program is successful in off-campus or other location; evaluated space sharing with other MnSCU institution or operated with other MnSCU institution previously; long term enrollment trends and enrollment needs support space on campus Low – no matching funds indicated Ave. – grant opportunities or other non-state funds available, but contingent on receipt of state funds High – non-state funds provided; endowment or other financial support (i.e. equipment) offered to cover at least 50% or more of initial capital cost Low – program can be accommodated on campus or in renovated space; no unique characteristics require new space Ave. – building and 34 | P a g e Impact on the viability of a college or university’s longterm operating budget 4.5 0 1 2 3 4 5 0 1 2 3 4 5 0 1 2 3 4 5 Evidence that technology and flexible space use have been fully maximized before proposing the need for new space 4.6 4.7 Calculation of the cost to students attributable to estimated debt service and expected increase in operating expenses infrastructure obsolescence make new build more cost effective than renovation; specialized energy High – similar to Ave. but includes special program conditions (i.e. filtering, noise, hazardous waste, etc) that would benefit from new or stand alone square footage Low – the new square footage results in substantial depreciation expense and operating expenses (utility costs, maintenance, cleaning) that would not be offset by gains in enrollment; projected to put campus Composite Financial Index (CFI) below 2.0 for at least three years after receipt of funds; debt service with new project may require financial restructuring Ave. – campus will maintain CFI; can manage debt service; evidence that CFI will remain stable or grow even if enrollment decline. High – campus absorbs and expects to grow CFI with the addition of the project Low – no evidence of hybrid or online courses incorporated in program prior to requesting new square footage Ave. – high space utilization in program rooms; no viable space on campus for programs; campus successfully held online and hybrid courses to maximize program space High – similar to Ave., but campus also utilized some nontraditional meeting times (weekends) and teaching methodologies to maximize space and seat utilization; growth of program requires new square footage Low – project debt service would add more than $100,000 / year in institutional debt service; cost to students on an DS/FYE $20/credit or more Ave. – Project debt service would be less than $50,000 or less a year and no more than $10/credit 35 | P a g e High – project debt service of $25,000 or less a year and DS/FYE of $10/credit or less TOTAL POINTS: (Max: 35 points) SUBTOTAL: TOTAL Scoring Points for the Project: Total Points 0.5 Core Considerations (30 points max) 1.0 Ensure Access to Extraordinary Education (25 points max - 15 points Ave - 5 points minimum) 2.0 Partner of Choice (20 points max - 12 points Ave - 4 points minimum) 3.0 Deliver to students, employers, communities and taxpayers the highest value/most affordable option (50 points max - 30 points Ave 10 points minimum) 4.0 NEW SPACE ONLY (35 points max 21 point Ave 7 points minimum) Project Total Points How would this project support or enhance the recommendations contained in Charting the Future? Additional Suggestions to Improve Project 36 | P a g e Appendix C: 2014 Capital Bonding List – Final Results Priority Project Title Request 1 Higher Education Asset Preservation and Replacement (HEAPR) $110.000 1 Demolition (systemwide) $20.601 2 $35.865 $35.865 3 Metropolitan State University science education center Bemidji State University Memorial, Decker renovation, Sanford Hall demolition and Hagg Sauer design $13.790 $13.790 4 Lake Superior College allied health revitalization renovation $5.266 $5.266 5 Minneapolis Community & Technical College workforce, phase 2 renovation $3.600 $3.600 6 $1.500 $1.500 7 Saint Paul College culinary arts and computer numerical control/machine tool renovation Minnesota State College-Southeast Technical, Red Wing and Winona welding, science labs and classrooms renovation $1.700 $1.700 8 Central Lakes College, Staples campus rightsizing renovation 9 12 Minnesota State University, Mankato clinical science facility Minnesota State Community & Technical College, Moorhead transportation center addition and renovation Rochester Community & Technical College Art Hall renovation and post-demolition design of Plaza and Memorial Halls Minnesota West Community & Technical College, Jackson and Canby classroom, powerline facility and Geothermal System renovation 13 Dakota County Technical College transportation and emerging technologies renovation $7.586 14 $2.020 $2.020 $5.864 $5.864 16 Century College digital fab lab, kitchen space and solar panel system renovation Northland Community & Technical College, Thief River Falls aviation maintenance facility addition and demolition Northeast Higher Education District; Itasca, Rainy River, Vermilion and Hibbing science labs, classroom, biomass heating renovation and demolition $3.344 $3.344 17 Winona State University Education Village, Phase I, renovation $5.902 $5.902 18 Anoka Technical College manufacturing technology hub and auto tech lab $1.500 19 Saint Paul College health and science alliance center addition $14.482 20 Century College classroom and workforce alignment addition $1.000 21 South Central College, North Mankato STEM and healthcare renovation $7.467 22 $0.865 23 St. Cloud State University student health and academic renovation Minnesota State Community & Technical College, Fergus Falls and Wadena campus rightsizing and Center for Student Success renovation 24 Northland Community and Technical College, East Grand Forks lab renovation $0.749 25 Winona State University Phelps Hall Psychology Lab renovation $0.592 Total $286.5 $159.8 $52.0 $120.7 $234.5 $39.1 10 11 15 User Financing General Obligation Final Bill $42.500 $4.581 $4.234 $25.818 $25.818 $6.544 $6.544 $1.000 $1.000 $3.487 $0.865 $1.385 37 | P a g e Appendix D: Statute Requirements For Projects Receiving State Funding STATUTE 1. §16B.241 Coordinated Facility Planning 2. §16B.32, Subd 1 Alternative Energy Sources if renovating 50 percent or more of an existing building or its energy systems 3. §16B.32, Subd 1a Renewable Energy Sources - 2% of energy use Solar or Wind-predesign must include analysis 4. §16B.32, Subd 2 Energy Conservation Goals May enter into an energy savings agreement with utility or energy services provider 5. §16B.323 Solar Energy in State Buildings. Up to 5% of appropriation to be used on Solar energy system when doing substantial reconfiguration or replacement of energy systems (Mad in MN systems) 6. §16B.325: Apply Sustainable Guidelines (B3-MSBG) (New Bldgs & Major Renovations – See www.msbg.umn.edu §216B.241 Sustainable Building 2030 requirements 7. §16B.326 Written plan w/predesign to consider providing Geothermal & Solar Energy Heating & Cooling Systems on new or replacement HVAC systems 8. §16B.327 Recycle 50% of Construction & Demolition Waste RECIPIENT State Agency Higher Ed Political Subdivisions YES (required by statute) NO (not required by statute) NO (not required by statute) YES NO NO YES NO NO YES NO NO YES YES YES YES YES YES YES YES YES YES must comply with MSBG 75% YES must comply with MSBG 75% NO But must comply with MSBG 75% 9. §16B.33 State Designer Selection Board YES YES NO 10. §16B.335, Subd 1, Notification to House & Senate Committees YES YES YES 11. §16B.335, Subd 3 Predesign Submittal See Statute for exempted projects YES YES YES YES YES YES YES NO NO YES YES YES YES YES YES NO YES NO YES YES YES See appropriation See appropriation See appropriation 12. §16B.335, Subd 4 Energy Conservation Standards (Energy Code - MN Rules 1322/1323 http://www.doli.state.mn.us/CCLD/Codes.asp 13. §16B.335, Subd 5 & 6 Information Tech. Review & ltr by MN.IT 14. §16B.335, Subd. 3c Consider the use of MINNCOR products www.minncor.com 15. §16B.35 % for Art When considered in original legislative request; & when constn is $500K or greater 16. §16A.695 Use / Grant Agreement 17. §177.42-44 Prevailing Wage RatesContractor must pay prevailing wages https://www.revisor.mn.gov/statutes/?id=177 18. Appropriation Language Regarding requirement for matching funds 38 | P a g e Appendix E: What is the Composite Financial Index? The Composite Financial Index (CFI) offers insights regarding financial strengths and weaknesses. The composite is calculated from 4 component measures: return on net assets, operating margin, primary reserve, and viability. (See also the definitions of these components). The calculation of CFI from these components involves certain "strength factors" and "weighting factors" applied t o the 4 components. Operating margin is one of 4 component measures in the Composite Financial Index. The ratio numerator is "Inco me (Loss) Before Other Revenues, Expenses, Gains, or Losses" from the Statements of Revenues, Expenses and Cha nges in Net Assets". The denominator is 1) the total of all operating revenues plus 2) all nonoperating revenue from the Statements of Revenues, Expenses and Changes in Net Assets. Primary reserve ratio is one of 4 components in the Composite Financial Index. The ratio numerator is “Expendable Net Assets” "Expense Net Assets" computed from the Net Assets section of the Statement of Net Assets as 1) "Total Net Assets" less 2) "Invested in capital assets, net of related debt." The denominator is computed from data on the Statement of Revenues, Expenses, and Changes in Net Assets" and includes 1) total operating expenses plus 2) interest expense. Return on net assets is one of 4 component measures in the Composite Financial Index. The ratio numerator is "Change in net assets" computed by taking the 'Change in net assets" from the Statements of Revenues, Expenses and Changes in Net Assets. The denominator is "Total net assets;" use beginning net assets (i.e., prior year ending net assets). Viability ratio is one of 4 component measures in the Composite Financial Index. The ratio numerator is "Expendable Net Assets," the exact same value used as the numerator for the Primary Reserve Ratio calculation. The denominator is "Long term Debt" computed from the "Statements of Net Assets" by adding 1) the current and 2) the noncurrent portions of long term debt. What is the relevance of the CFI? System Procedure 7.3.16 provides financial health indicators, including a review of the Composite Financial Index score at the end of each fiscal year. The CFI score is computed annually by each college and university as part of a fiscal year-end analysis of financial trends and highlights. A CFI score less than 1.5 (based on a two-year moving average) OR a CFI score under 0.5 for the most recent year requires a Financial Recovery Plan (FRP) which includes the specific steps that will be taken and expectations as to how these steps will improve the college's or the university's financial health above the trigger level. The FRP will be submitted to the Finance Division in the system office. Periodic progress reporting will be required if it is expected that corrective action will take more than one fiscal year. The FRP must include: Fund-level detailed, measurable steps tied to the fiscal year and the projected impact of the steps; Analysis of mid-year interim financial statements addressing FRP and the degree to which actual results match expected results; and Narrative linking the FRP to Higher Learning Commission criteria for accreditation; how are planned steps expected to improve college/university ability to achieve specific criterion. 39 | P a g e