MSU Moorhead Wellness Center
St. Cloud State University Parking Ramp and Public Safety
Winona SU Wellness Center
Minnesota State Colleges
and Universities
2013 Revenue Fund Bond Projects
Kick off meeting
Presented May 24, 2011
Slide 1
Southwest MSU Sweetland Residence
MSU Mankato Julia Sears Residence
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Introducing
• Brian Yolitz – Associate Vice Chancellor for Facilities
• Sally Grans-Korsh – System Director, Facilities Planning
and Programming
• Heidi Myers, System Director, Design and Construction
• Greg Ewig – System Director, Real Estate & Facilities
Business Support
• Heather Anderson – Revenue Fund Financial Manager
• Jeff Stierlen – Revenue Fund Accountant
• Alison Norman, Director of Policy, Minnesota State
Colleges Student Association (MSCSA)
• Shannah Mulvihill, Director of University & System
Relations, Minnesota State Universities Student
Association (MSUSA)
Slide 2
Agenda
• Introductions/WebEx Protocol
• What is the Revenue Fund?
• Project eligibility
Winona State University New Residential Halls (2010)
• Schedule and Process
• Role of students and student associations
• Developing the financial pro forma
• Funding sources
• Construction delivery methods
• Unifier and project tracking
• Post sale considerations
• Campus Project Poll – What’s on your plate for 2013?
Slide 3
What is the revenue fund?
Slide 4
What is the Revenue Fund?
Slide 5
On campus
Management of facility
and auxiliary business
Presidential
responsibility
Maintain positive
revenues and
stewardship of assets
Investment
Residence halls,
dining services,
student unions,
wellness, parking
Other revenue
generating facilities
Bonds issued by
MnSCU
Office of the
Chancellor
and Investors
Campus
Operations
Capital Financing
Office of the
Chancellor
and Campus
Outside investors –
pension plans, mutual
funds, indivdiuals
Municipal bonds
Highly rated, tax
exempt
Publicly available
Official
statement/prospectus
What is the Revenue Fund?
Legislative actions
• 2008 – add colleges eligibility
• 2010 – legislature increases bond
authority to $300 million
• Board is legally authorized to issue
revenue bonds
– Must not exceed $300 million in principal
– General obligation bonds are state issued
MSU Moorhead Wellness Center
Slide 6
Bond Authority (post 2011 sale)
Bond Description
Slide 7
Amount
Current bond authority (by statute)
$300 million
Outstanding Bonds (after February 2011 sale)
($260) million
Available authority (after February 2011 sale)
$ 40 million
Bond Authority (projected for 2013)
Bond Description
Current available authority
2011 C bonds (after Normandale Ramp in July)
$ 40 million
($ 12.5) million
Available authority (after Normandale sale)
$27.5 million
Principal payments in 2011/2012
$19.0 million
Projected authority available - 2013
Slide 8
Amount
$46.5 million
Project Eligibility
Slide 9
Project Eligibility
 College or universities
 Market capacity
 Developed in facilities master plan
Century Parking Lot renovation with storm water filtering
 Enrollment projections
 Academic programs warrant investment
 Compliment city plan / surrounding use
 Lack of interest from private market
 Financial capacity
 Current fees
 Future fees
 Available resources and trade offs
 Cost of attendance
Slide 10
Julia Sears Double Room
Project Eligibility
MSU, Mankato
• Definition: “Dormitory, residence hall, food service, student
unions and other revenue producing facilities…”
– Health, wellness and athletic (such as Moorhead, Coon
Rapids and Mankato)
– Parking ramps (such as St. Cloud, Minneapolis, and St.
Paul)
• Typical “auxiliary” uses - Projects focused on student living
and related amenities
• Not used to finance academic buildings (“G.O.” bonds)
• Students pay full debt service and operating expenses
through fees
Slide 11
• Project Origination
Shoemaker Halls
Preliminary Step
St. Cloud State University
– Goal – for all projects to be contemplated in
Facilities Master Plan or other planning
document (i.e. Residential Life Plan)
– Response to program growth
– Projects already in development pipeline
– Emerging business need or funding
opportunity
– To address deferred maintenance or other
health, life or safety issue
Slide 12
Winona State University Wellness
Schedule and Process
Slide 13
Schedule and Process
Project identification and feasibility
(6 months)
Authority and design work
(6-8 mos.)
Third party approvals
(4-5 months)
Final approvals and sale
(1-2 months)
Slide 14
Linden Hall
Schedule and Process
Bemidji State University
1. Project Identification Phase –
(June – December 2011)
• May/June – identify projects (master plans)
• June – start predesign and pro forma
• September - student consultation
• November – 100% predesigns and proformas
• December - legislative authority legislation prepared
(if needed)
• legislative strategy developed
Slide 15
Schedule and Process
2. Authority and Design Work
(January – June 2012)
Slide 16
MSU Mankato Sears Lounge
•
January – Submit legislation seeking increase in bond authority
•
April/May – fees submittals for FY13
•
May – Receive authority increase from legislature
•
June –proceed with schematic design
•
June –taxable bond financing available to advance schematic
design to campuses
3. Third Party Approvals
(July – December 2012)
• September – consultation with students
Wellness Center
Schedule and Process
MSU Moorhead
• October – first reading at Board
• October / November – present to rating agencies
• December – receive bond rating
• November/December - second reading at Board
Slide 17
Student Union
Schedule and Process
4. Final Approvals and Sale
(December 2012 – February 2013)
Slide 18
•
Final Board approval (second reading)
•
Publication of Official Statement
•
Notice to the legislature
•
Price and sell bonds
•
Money is available for construction!
MSU Mankato
Process – Predesign and Design
Slide 19
Master Plan Update Every 5 Years
Facilities Master Plan
Predesign defines further Capital Projects
Scope: What is it?
Campus Individual
Capital Plan
Predesign for
Revenue Fund
Projects
2-year cycle
Cost: how much?
Schedule: when
to build and open?
Winona State University Krysko Commons
Slide 20
Predesign for 2-year
Legislative Process or other
Funding Sources for
Academic Projects
New Construction or
Renovation
HEAPR
Schedule Options for Design
Note: Project cost may be impacted when design phase adjusted.
Master Planning
Update Every Five Years
Student Consultation on Planning and Funding Components Identified
Predesign
6 months to Develope the
Scope, Cost and Overall
Schedule with Student
Consultation
Options - All Schedules impact
overall Cost
Bond Sale for
Revenue Supported
Projects
Design
Design
Bid
Bond Sale for
Revenue Supported
Projects
Bid
Slide 21
Construction
Construction
First Step - Predesign
• Defining Scope –master plan
or other surveys
• Understanding the inter-relationship
between the scope – cost – schedule
• Impact /inter-relationship
• Business plan and
student consultation
critical
Slide 22
Scope –
What is it?
Options studied
Cost –
How much:
Initial cost,
ongoing and
overall
repayment?
Schedule –
need for
execution
impact on cost
and scope
Predesign – Basic Elements
Data that should be evaluated even before a consultant is retained.
• Scope Components
– Survey and analysis of need
– Demographics – current, future, trends
• Cost
– Existing debt, capacity, backlog, upcoming renewal needs
• Schedule
– Schedule: design, construction, occupancy
Slide 23
Lounge areas:
Left – renovation at
Bemidji SU and
Right – new at
MSU Mankato
Predesign - Scope
• Renovation
– Modernization – Renewal
– Renovation: Minor and Major
Kitchen Renovation – MSU Mankato
– Backlog of Deferred Maintenance and upcoming Renewal
• New Construction
– Staging, wetlands, ‘quiet’ hours, etc
New Snack Areas
Bemidji SU - left
MSU Mankato - right
Slide 24
Inter-relationship – scope & cost
• Master plans – scope development
– Facilities Master Plan, Academic, Demographics, Technology, Housing, etc
– Infrastructure work required for the project
– Mechanical, electrical, water/sewer, parking, grounds issues, etc
• Student interface – surveys, consultation
• Debt capacity; deferred maintenance backlog and upcoming
renewal needs (FRRM report); operational costs
• Hazardous issues
– Asbestos, environmental issues and concerns
• Community components
– Housing and other comparables – local market research
– Peer institutions
– Real estate – leasing or buying (contact Real Estate Director Greg Ewig!)
• Academic interface – student interface
– Wellness centers, other
Slide 25
Inter-relationship – scope & cost *
* Note: these costs are here as illustrations only – contact us for recent cost data information
• New construction example (housing)
– Single units: 200 @ $70,000 each = $14 million x 1.3 project
cost x 1.1 sale cost = $20 million for total project
– Double suite units: 200 @ $52,000 each = $10.4 million x
1.3 project cost x 1.1 sale cost = $14.8 million for total project
• New construction vs Renovation/Renewal
– 30,000 sq ft new construction @ $225/sq ft x 1.3 project cost x
1.1 sale cost = $9.7 million
– 10,000 sq ft new construction @$225 sq ft and 20,000 sq ft
renovation at $100/sq ft x 1.3 x 1.1 = $6.1 million
• Parking (example):
– 1,000 stalls at grade = $2.5 million requires 4 to 6 blocks
– 1,000 stalls at deck = $8 million requires two blocks
Slide 26
– 1,000 stalls at ramp = $15 million requires one block
Inter-relationship – cost & schedule
* Note: these costs are here as illustrations only – contact us for recent cost data information
• New Construction
– Design eight months and construction 10 months: accelerated
design time and construction yields potential increase
–
Design twelve months and construction 16 months: overall price
may be the same or it may decrease due to increased scheduling
flexibility and lack of overtime required or it may increase due to inflation
of materials
• Renovation
– Maintaining operations may add additional cost in overall schedule –
could add $10 to 50/sq ft. Predesign consultants need to review and
discuss.
• Complications:
– Staging issues may add additional costs (ability to construct the work)
– Timing of construction could add costs if winter season is a component
could add significant dollars for frost cutting, winter heating, etc
Slide 27
– Special conditions: asbestos, environmental, wetlands, ‘quiet’ hours, etc
*
Campus Funded Projects !
Saint Paul College Fitness Lab
• former machine shop lab space
• Less than $100,000 – not including equipment).
• Some equipment was donated from another
university and some was bought.
Space is used extensively!
Large kinetics area is used
for group spinning classes.
Slide 28
Campus Funded Projects…
Above: Simple changing rooms created.
Below: weight area separate from kinetics area.
Slide 29
Reused lockers across from
Changing Rooms.
Simple office/check in.
Student Association Role in the
Revenue Fund Process
Alison Norman, MSCSA Director of Policy
Shannah Mulvihill, MSUSA Director of System & University
Relations
May 24, 2011
Slide 30
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Working with Campus Student Senates
Slide 31
•
Projects should focus on “ needs” vs. “ wants” – You’re asking students
to pay for the whole project. Projects should be a part of the master
plan, and be desired by students.
•
Actively involve students in consultation early in the process.
•
Should be a collaborative discussion, not an “information-only”
presentation.
•
Listen to concerns and try to address them.
•
Make sure you bring the correct people to the meeting
•
Present students with more than one option. (e.g.: What can you get for
$4/credit vs. $6/credit)
•
Make sure students fully understand revenues and expenditures.
•
What fees will be needed for the life of the project?
•
Will revenues be sufficient to meet costs?
•
Does data support long-term need/viability of the project?
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Role of Statewide Student Associations
Slide 32
•
Stewards of the best interests of students statewide – draw on
institutional knowledge to provide advice to students.
•
Convene the Revenue Fund Advisory Council
•
Engage in high-level decisions/recommendations about revenue fund
processes (to the Legislature, Board of Trustees, etc.)
•
Train campus student senates on best practices for consultation.
•
Assist campus student associations in understanding individual
projects.
•
We will intervene in individual projects if students oppose a project or if
we have significant concerns about the viability of a project, ineffective
consultation, negative statewide impacts, etc.
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Questions/Concerns?
Alison Norman
Director of Policy, MSCSA
anorman@mscsa.org
(651) 297.5877
Shannah Mulvihill
Director of University & System Relations, MSUSA
smoore@msusa.org
(651) 224-1518
Slide 33
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Developing the financial
pro forma
Slide 34
Revenues
Student Union
Developing the
financial pro forma
– Primary – Student fees
– Secondary – rents, commissions, etc.
MSU Mankato
Expenses
– Reserve amount (3 months minimum)
– Debt Service
– Operating Expenses
– Revenue fund assessment
– Standardized pro forma templates (see
website)
Slide 35
Developing the financial pro
forma
http://www.finance.mnscu.edu/facilities/revenuefund/index.html
Slide 36
Financial Pro Forma - Assessment
• Program fee
– $20K for Residence Halls
– $10K for Student Union/Centers
– $ 5K for all other programs Plus
• % of bond
– 0.25% of the par amount of bonds
• Used to manage the Revenue Fund
• Charged at the end of the fiscal year
Slide 37
Funding sources
Minneapolis Community and Technical College Student Center Renovation and Addition – under construction
Slide 38
Funding Sources
Definition: “The Board of Trustees may issue revenue
bonds…and use the proceeds together with other public or private
money that may otherwise become available…”
- Minn. Stat. Sec. 136F.98
Revenue
bonds
General
obligation
bonds
Private
Funds
Campus
Operating
Project Funds
Slide 39
Parking Ramp
Funding
St Cloud State University
• Primary mechanism: Student fees and user
generated revenue
– Board of Trustees must approve fees
– Students consultation required
• Prohibitions: Tuition or appropriations
– Never comingle
– Prohibited to pay debt service
– May use auxiliary funds
• Multiple funding sources are encouraged
Slide 40
– BUT - Assets must be kept separate for financial
reporting
Funding Sources
•Revenue bond – taxable or tax exempt
•Other Sources
•General Obligation
•Separable
•Own legal requirements
•Private funding
•Naming rights
•Donative intent
• Grants?
Slide 41
Winona State University Wellness Center used multiple sources of funding
Funding Source
• Tax exempt bonds
– 20 years (usually)
– Interest we pay is tax exempt to investors
– Debt service reserve usually used for last year’s
payment
• Taxable bonds
– 10 years
– Held by Office of the Chancellor
– Available for: design and to supplement projects
– Debt paid by OOC until transferred to campus
– Prefer increments of $500,000
Slide 42
Linden Hall Renovation
Bemidji State University
Southwest MSU Sweetland Residence Hall
Construction delivery
methods
Slide 43
Construction Delivery Methods
• Design/ Bid/ Build
• Contractor hired after design is complete
– Selection based on low bid
• Construction Manager at Risk
• Contractor hired during design phase
– Selection based on qualifications and O&P cost
• Design/ Build
• Contractor and Architect hired prior to design
– Selection based on qualifications and cost
Slide 44
Project Management
Information System (PMIS)
Slide 45
PMIS
Project Management for:
– Project Directory
– Budget
– Contracts & Invoices
– Schedule
– Correspondence
– Reports
– Drawings and Specifications
– Warranty/POE
Slide 46
PMIS
• Partners
– College/University staff
– Office of the Chancellor staff
– Owner’s Representative
– Architect/Engineer
– Contractor
– Other partners
Slide 47
Post sale considerations
Normandale Kopp Student Center – under construction
Slide 48
Post Sale Considerations
• Financial
– Construction draw plan
– Debt service payments
– Assessment levied
• Occupancy
– Post occupancy evaluation
– Lessons learned
Slide 49
Campus Project Poll – What’s
on your plate for 2013?
Slide 50
Presenters Contact Information
•
Heather Anderson (Revenue fund financials)
651.201.1772 and heather.anderson@so.msncu.edu
•
Gregory Ewig (Revenue fund)
651.201.1775 and gregory.ewig@so.mnscu.edu
•
Sally Grans-Korsh (Planning – Master Plan and Predesign)
651-201.1776 and sally.grans@so.mnscu.edu
•
Heidi Myers (Design & Construction)
651.201.1773 and heidi.myers@so.mnscu.edu
•
Jeff Stierlen (Revenue fund accounting)
651.201.1740 and jeff.stierlen@so.mnscu.edu
Slide 51
•
Brian Yolitz (Capital, Facilities oversight)
•
651.201.1777 and brian.yolitz@so.mnscu.edu
•
Alison Norman (Director of Policy, MSCSA)
•
(651) 297.5877 and anorman@mscsa.org
•
Shannah Mulvihill (Director of University & System Relations, MSUSA)
•
(651) 224-1518 and smoore@msusa.org