Minnesota State Colleges and
Universities
Overview of Capital Planning and the
Revenue Fund
October 22, 2010
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
• Greg Ewig – System Director, Real Estate
& Facilities Business Support
Slide 2
What is a revenue bond?
• “IOU”
• Type of municipal bond
Screen shot of
details about our
2009 Revenue
Fund Bond
Slide 3
What is the Revenue Fund?
Some representative
Revenue Fund projects
Slide 4
What is the Revenue Fund?
• A way to finance non-academic
buildings using revenue bonds
– residence halls
– student unions
– health/wellness
– parking, and
– other revenue producing facilities
(auxiliaries)
• Academic buildings – Use General
Obligation Bonds (“Bonding Bill”)
Slide 5
What is the Revenue Fund?
College
Projects
Revenue
Fund
University
Projects
Slide 6
Eligibility
• 1955 – Revenue fund created (state
universities)
• 2008 - colleges become eligible for
revenue fund
Slide 7
Authority
• Statutory. Minn. Stat. §§136F.90-136F.98
– Governs bond authority
– Operations of revenue fund
• Board of Trustees.
– Approves all bond sales
– Approves fees
• Bond Documents.
– Indenture is the contract between MnSCU and the
Trustee (handles the bonds)
– Master Indenture adopted by Board of Trustees on
January 18, 2007 governs the past and future sales.
Slide 8
New Procedure
• Revenue Fund Management
– Procedure 7.3.5
– In development (along with tuition and fee
procedure rework)
• Current status:
– consultation with student associations
• Next:
– consultation with campus leadership
Slide 9
Financial Capacity vs. Bond Authority
• Debt Capacity
– Based on previous year’s financials and
history of revenue generation
– The amount of debt the Fund can afford
– Current Capacity = $350 million
• Bonding authority
– Legislature sets debt ceiling for bonds
– Authority increased in 2010
– Current Authority = $300 million
Slide 10
Bond Authority
2011 Bond Sale
Slide 11
Current Bond Authority
$300 million
- Outstanding Bonds
$175 million
Available bond authority
$125 million
2011 Bond Sale
$ 87 million
After 2011 bond sale
$ 38 million
Working relationships
Office of the
Chancellor
Slide 12
Campuses
Advise and
prepare Rev Fund
Board of Trustees
Students
Legislature –
authority increase
Generating
operating revenue
and manage
expenses
Financial Advisors
and bond counsel
Operations and
repair of facilities
Campus Staff
Making debt
service payments
Funding
• All revenue fund debt and expenses
are funded through user fees
• No tuition or state appropriation can be
used to pay debt
• Student Fees and user generated revenue
keep operations and debt paid
– Board approves tuition & fees each year
– Student consultation required
Slide 13
Cycle of a revenue fund project
What’s in
the master
plan?
Approval
and Build
Financially
Feasible
Slide 14
Revenue
fund
eligible?
Predesign
Summary:
1. Master Plan is updated every five years.
Purpose is to set vision for future (short,
me d and long term) with five year
increments. This allows for meaningful
discussion on immediate plans.
2. Students consultation sought.
3. Revenue Funded projects emphasized with
student consultation at this level.
Facilities Master Plan
Funding Plan for Campus
Revenue
Funding
Donations and other
Improvements
Donations
and other
Operations Budget
Repair and Replacement Projects
and
Other change in program projects
HEAPR Funded Projects
(Asset Preservation per Statute)
Repair and Replacement Project
Capital Projects
(Large scale Additions and Renovation Projects
Requiring Capitalized Funding)
Predesign Document
(Scope, Cost and Schedule)
Master Plan notification and student consultation –
Predesign Summary and consultation
• Master plan formal update occurs every five years; consultation noted in presentation
to Office of the Chancellor.
• Predesign defines further the scope, cost and schedule of any capital project.
• Note that there are different review forms for academic and non-academic buildings.
Facilities Master Plan
Other FundingDonations, Grants
Partnerships
Summary:
1. Predesign communicates essential project
objectives with factual data prior to the
commencement of the design process.
2. Predesign is the stage during which the purpose,
scope, cost and schedule of the complete project
are defined and instruction to design professionals
are produced.
3. Alternatives to building or renovation need to be
reviewed. Options in building need to be
provided to allow for potential delivery of
program even if optimum funding is not achieved.
Operational Funds from
Campuses – Repair and Replacement
Revenue Fund Bond Sale
For Non-Academic Buildings
Campus Individual
Capital Plan
Predesign
Legislative
Appropriation
Legislative Process
2-year Board Approved Plan
Renovation or
New Construction
HEAPR
Slide 16
Predesign - Scope
• Renovation
– Modernization – Renewal
– Renovation: Minor and Major
– Backlog of Deferred Maintenance and upcoming Renewal
Kitchen Renewal
– MSU Mankato
• New Construction
– Staging, wetlands, ‘quiet’ hours, etc
New Snack Areas
Bemidji SU - left
MSU Mankato - right
Slide 17
Predesign Purpose: Cost, Scope and Schedule
• Predesign communicates essential project objectives with factual data prior
to the commencement of the design process.
• Predesign is the stage during which the purpose, scope, cost and schedule of
the complete project are defined and instruction to design professionals are
produced.
•
Critical to understand that these three elements are connected and will impact
each other; i.e. scope will impact cost and schedule will impact cost, etc
Cost – what is cost of
design and construction
and sale impact?
Schedule –
Scope – what is the
project, type, size,
functions, spaces ?
how will timing of
overall design,
construction and
sale impact cost
and scope?
Many Different Options to Schedule for
Potential for Design and Bond Sale
Each variation of when Design and Bond Sale occurs has an impact on overall project cost.
Options are evaluated at the Predesign level to optimize project scope, cost and schedule.
Master Planning
Update Every Five Years
Student Consultation on Planning and Funding
Components
Predesign
6 months to
Develop the Scope,
Cost and Overall
Schedule with
Student
Consultation
Bond Sale
Design
Options - All
Schedules impact
overall Cost
Design
Bid
Construction
Bid
Construction
Bond Sale
Beginning of a Project
• Campus determines a need for a new or renovated project in
the master plan, discusses with student leadership and further
analysis is done during the Predesign development.
• Identification of options
–
–
–
–
On campus
Off Campus
Developer
Public Partner
• Verify project is in campus Facilities Master Plan and has had
preliminary student consultation – if not potential for update
to Master Plan may be required
– Verify appropriate functional uses, sufficient space, or other basic
needs
– Verify acquisition of property, either on or off campus
Feasibility of The Project
• Campus Committee including faculty/staff/students to
– review options
– draft purpose and scope
• Discuss with Facilities Planning the RFP process for a
Predesign (either pre-selected consultants or widespread
published RFP depending on contract value).
• Review components of the Predesign form to gather a sense
of the scope, cost and schedule to be discussed see website
for predesign form for non-academic projects
http://www.facilities.mnscu.edu./facilities/revenuefund/docs/NonAcademic_Predesign122809.pdf
• Retain a Consultant for the Predesign.
• Work with Consultant to develop Predesign.
• Facilities Planning reviews predesign at 50% and 90% stages;
but can also review at other times and be a resource to assist
in evaluation of scope, cost and schedule.
Developing The Project
• Work with O of C to estimate preliminary debt, funding costs,
etc. This can be done at early stages even during Facilities
Master Planning process.
• Facilities Planning and Revenue Fund O of C can meet with
campus community to explain predesign scope, cost and
schedule implications and discuss funding sources/options.
• Consult with appropriate student body per Policy etc.
• Request affirmative consultation letter on project to be sent
to O of C and state wide student organization.
• Inform O of C officially of interest in project.
BOND SALE STATUS
Slide 23
Recent Events (for 2011 sale)
• Fall Semester – 2009
– Identified projects – rough scope and cost
– Began Predesign process
– Student and campus community discussion on project
scope and funding
• Spring Semester – 2010
– January 15: Student letters citing initial project
support/Increase in Legislative Authority
– March 1: Preliminary Pro Forma and 50% pre- design
for projects to OOC
– April 15: Fees, finance plans, Student Consultation
letters submitted to Board of Trustees for FY2011
Slide 24
– August 15: 100% predesign and proformas delivered to
OOC
Current Stage (2011 Sale)
• Predesigns are complete; some design
work has begun
• Final student consultations (Oct)
• Board of Trustees First Reading (Nov)
• Rating Agency Visits and presentations
(December)
• Board of Trustees Approval (January)
• Bond Sale – February (money available
for design and construction)
Slide 25
2011 Bond Sale Project List
Campus
Slide 26
Project
Revenue Fund Bonds
Anoka Ramsey Community College
Wellness/Fitness
Center
$6,000,000
Bemidji State University
Renovation of Birch
Residence Hall
$6, 500,000
Minnesota Community and Technical
College Moorhead
Wellness/Fitness
Center
$1,500,000
MSU Mankato
New Residence Hall
MSU Mankato
Renovate Student
Union Ballroom
$2,500,000
MSU Moorhead
Renovate Dahl
Residence Hall
$8,650,000
St. Cloud State University
Renovate N.
Shoemaker &
Case/Hill
$16,000,000
Saint Paul College
New Parking Ramp
$10,500,000
Planning
Various
$25,000,000
$3,000,000
Recap of 2011 Sale
• $87 million total (includes bond costs)
• 8 projects
– 5 university
– 3 college
• Residential
– Renovate nearly 1,000 beds
– Add 300 new beds
• Wellness
– 2 new wellness centers
• Student Union
– Renovate ballroom
• Parking
– Add 610 stall ramp
Slide 27
Early Steps for 2013 Bond Sale
Spring – 2011
• Solicit new projects for 2013 sale
Summer 2011
• Initiate predesigns
Fall 2011
• Initial consultation with students
Winter 2011/12
• Obtain increase in legislative authority (if
needed)
Slide 28
Additional Info Sessions
• Future WebEx info sessions planned for
specific audiences:
– Planning for a revenue fund project
– Developing a Pro Forma (Campus)
– Flow of Funds/Account Structures/Accounting
– Student Consultation
• Staff is available for individual campus
meetings – call anytime!
Slide 29
Contact Information
• Brian Yolitz, Associate Vice Chancellor for
Facilities, Brian.yolitz@so.mnscu.edu, 651-2011777
• Sally Grans-Korsh, System Director for Facilities
Planning and Programming, 651-201-1776 and
sally.grans@so.mnscu.edu
• Gregory Ewig, System Director for Real Estate
and Facilities Business Support, 651.201.1775
and gregory.ewig@so.mnscu.edu
Slide 30