MINNESOTA STATE COLLEGES AND UNIVERSITIES
FACILITIES CONFERENCE
April 24-26, 2013
REVENUE FUND AND CAPITAL PROJECTS
CONTACT(S):
Greg Ewig, 651.201.1775, Gregory.ewig@so.mnscu.edu
Heather Anderson, 651.201.1772, heather.anderson@so.mnscu.edu
PURPOSE:
To provide an overview on the planning and financing mechanism
administered at the system office to develop and support projects that are
eligible for revenue bond financing
Revenue Fund Projects: College or university auxiliary or revenue generating facilities, such as
residence halls, student unions, health/wellness centers, and parking.
Background
The Revenue Fund is a planning and financing mechanism administered at the system office to
develop and support projects that are eligible for revenue bond financing on campuses.
Although the capital process is fairly uniform regardless of whether the project is revenue or
general obligation supported, a few important points about the revenue fund:
1. The revenue fund is exclusively a system process. The Board of Trustees
issues a n d controls when and how many revenue bonds it issues within
established debt authority limits. This authority is the primary distinction
from the biennial capital budget process. The system’s current debt
authority is $405 million, which was increased in the 2012 Legislative
session. In the capital bonding process, by contrast, system capital needs
compete with other Minnesota agencies’ capital needs for a limited supply
of general obligation bonds.
2. The revenue fund is self-nominating process. The revenue fund is driven by
the needs and planning efforts of individual campuses to put forth a
project. Campus master plans, predesign and design planning are all similar
to an academic project. The campus drives the project nomination process,
along with student input and consultation. Often times, student support is
the crucial ingredient to a revenue fund project moving ahead. Unlike the
general obligation bond process, the revenue fund does not rely on a
competitive scoring mechanism to rank projects that establish funding
priorities as part of the Board approval process. The major criteria are 1)
demonstrated need, and 2) ability to afford the project (including the full
debt service).
MINNESOTA STATE COLLEGES AND UNIVERSITIES
FACILITIES CONFERENCE
April 24-26, 2013
3. Revenue bond projects are self-supported. Although revenue fund projects
are not rank ordered, they are analyzed on a project by project basis based
on their financial feasibility. Debt and revenue profiles of each project will
vary depending on the size of a campus and project type. Dedicated fee
revenues are required for each project, meaning each revenue fund
project is able to support itself in terms of debt service, operating
expenses and reserves before being added to a project list for
Board consideration.
Capital Investment in Revenue Fund Facilities
Revenue fund policy and practice have taken a two prong approach to capital investment:
1. Keeping revenue fund facilities, “safe, warm and dry,” similar to what HEAPR funds are used
for academic facilities, and
2. Responding to the Board’s and campuses’ strategic directions to support enrollment and
demographic changes by offering updated residential and student lifestyle facilities (student
unions, wellness/athletic centers, etc.)
Participation
All colleges and universities are eligible to participate in the revenue fund. Currently, fourteen
(14) campuses are part of the revenue fund, including: 1. Alexandria Technical and Community
College, 2. Anoka Ramsey Community College, Coon Rapids, 3. Bemidji State University, 4.
Century College, 5. Metropolitan State University 6. Minnesota State Community and Technical
College Moorhead, 7. Minnesota State University, Mankato, 8. Minnesota State University
Moorhead, 9. Minneapolis Community and Technical College, 1 0 . Normandale Community
College, 11. St. Cloud State University, 12. Saint Paul College, 13. Southwest Minnesota State
University, 14. Winona State University.
Revenue Bond Authority
The Revenue Fund currently has a $405 million authority limitation, which was increased in
the 2012 legislative session.
MINNESOTA STATE COLLEGES AND UNIVERSITIES
FACILITIES CONFERENCE
April 24-26, 2013
2015 Revenue Bond Sale
Kick Off Preview
Preliminaries
May – December 2013
 May 16, 2013 – Kick Off / Revenue Project 2015 Meeting, MSU Mankato (Also available via WebEx) – All campuses
considering a revenue fund project in the 2015 Revenue Bond should attend
 Early June –Verify expected projects identified during kick off meeting
 June – Evaluate rev fund projects in master facilities or residential life plans
 July – November – Campus hires architect and/or other professionals; develop predesign and financial pro forma
 November 30 – 50% submittal of predesign and proforma due to system office
Authority and Feasibility
January 2014 – August 15, 2014
Legislative Authority and Project Feasibility
Phase
 February 15 – 100% predesign and proformas due; campuses to provide evidence of jurisdiction support for project
 February – March – campuses consult with student organization regarding student fees for the revenue fund
 April 15 - revenue fund fee student consultation letters due to system office
 May/June –2015 Revenue Fund Project Update (review only) and Facility fees considered by Board for next fiscal year
(including fees for 2015 projects, if applicable)
 August - Finalize pro forma and presentations to students in the fall – review student impact, student consultation
plan
Approvals
August 16, 2014 – December 31, 2014
Preparation for Rating Agencies and Board Approval
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August/September – Final student consultations on projects; collect updated student consultation letters
September – preparation for Board submissions and rating agency visits
October or November – First reading at the Board of Trustees
November/December – Rating agency visits
November/December - Preliminary Statements prepared
November or January – Second/Final Board of Trustees reading – Sale approval
Final Approvals and Sale
Final Board approval and bond sale
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January – Final Board approval (depending on schedule)
January – Notice to legislature after Board approval
January - Official Statements published
February - Sale Date
Late February/early March – Funds available
January 2015 – February 2015