Overview of the Revenue Fund

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1 Overview of the Revenue Fund Revenue Fund Advisory Committee September 20, 2013 Greg Ewig System Director, Capital Development Minnesota State Colleges and Universities The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.

Advisory Committee Charter Designed over 10 years ago when university only membership in Fund Now: over 33 eligible participants (many more when all the interested

2 Advisory Committee Charter Designed over 10 years ago when university only membership in Fund Now: over 33 eligible participants (many more when all the interested parties are involved) Question: Value / scope / purpose Can this advisory function be better achieved through an agenda item at a student association meeting or other avenue? 2

3 What is the Revenue Fund? 3

4 What is the Revenue Fund? A way to finance non-academic buildings using revenue bonds Residence Halls Student Unions/Centers Parking ramps and lots Health/Wellness Centers

5 Funds for academic buildings come from Capital Budget (i.e. legislative process) 5

6 Current Revenue Fund Campuses

7 Revenue Fund is about 21% of systemwide total square footage System Gross Square Footage 16% 5% GO Rev Fund RF Ramps* 79% * Does not include parking lots In Alexandria or Century. 7

8 5.6 million square feet including parking ramps (4.6M sf without) Revenue Fund GSF by Program 16.38% Residence Halls 14.89% 55.21% Student Unions Wellness Centers Parking ramps 13.53%

9 Nearly 3/4 of revenues come from residence hall programs (2012) 6% 2% 19% Room and Board Fees Sales and Service Other 73% 9

10 Revenue Fund Facilities are in good condition Current Replacement Value = $1.27B Backlog: $112 million Renewal: $76 million (next 5 years) Facilities Condition Index (FCI): 0.09 (system average is 0.11) 10

ratings characterize the investment as High Grade and

11 Bond Ratings For recent bond sale: Moody s: Aa2 (high quality) Standard and Poor s: AA- (high quality) Both ratings characterize the investment as High Grade and High Quality Generally stable outlook Acknowledges challenging climate

12 Revenue Bonds Issued by Year Year Total Appropriation 2002 $36,275, $45,320, $43,070, $41,020, $35,810, A & B $85,800, C $12,000, (refunding of 2002) 2013 $58,795,000 12

13 Bonds by Campus (Total Sold) (2002-now) Campus Par Amount of Bonds %Total Enrollment (FYE / 2012) Minnesota State University, Mankato $79,249, % 14,443 Winona State University $46,900, % 8,544 St. Cloud State University $46,784, % 13,938 Minnesota State University Moorhead $32,583, % 6,574 Metropolitan State University $31,535, % 6,086 Normandale Community College $27,965, % 7,131 Southwest Minnesota State University $18,234, % 3,681 Bemidji State University $17,820, % 4,634 Minneapolis Community & Technical College $14,627, % 6,963 Saint Paul College $11,730, % 4,729 Anoka Ramsey Community College $6,420, % 6,048 Century College $4,330, % 7,662 M-State Moorhead $1,560, % 1,973 Alexandria Technical College $565, % 2,268 Total Par Amount of Bonds $340,305, % 94,674

14 Debt and Debt Service Summary Debt Capacity: $405M (by statute) Bonds Outstanding (principal): $295.3 Until Capacity Reached: About $110M Current debt service: $23.6M

15 Preparation for a bond sale 2013 Revenue Bond Sale May 2011 Call for projects Summer - Fall 2011 Predesign begins Preliminary project list Spring - Summer 2012 Legislation increasing debt ceiling Fall 2012 Board review and approval (Oct/Nov) Rating agency visits March 2013 sell bonds April 2013 work commences 2015 Revenue Bond Sale May 2013 / Kick off meeting Call for projects Summer - Fall 2013 Predesign begins Preliminary project list Spring - Summer 2014 Refine predesign Present projects to Facilities Fall 2014 Board review and approval (Oct/Nov) Rating agency visits March 2015 sell bonds

16 2011 Projects Institution Anoka Ramsey Community College Coon Rapids Project Title Construct Fitness, Field House and Wellness Center Approved Project Cost Status $9,900,000 Complete Bemidji State University Renovate Birch Hall $7,530,000 Complete Minnesota State Community Technical College Moorhead Minnesota State University Mankato Minnesota State University Mankato Minnesota State University, Moorhead St. Cloud State University Wellness Center addition $1,457,000 Complete Renovate Centennial Student Union Ballroom $4,500,000 Complete Construct Residence Hall $29,925,000 Complete Renovate Dahl Hall $8,615,000 Complete Renovate North Shoemaker, Case & Hill Halls $16,675,000 Complete Saint Paul College Construct Parking Ramp $10,429,000 Complete Normandale College Construct Parking Ramp $12,000,000 Complete

17 2013 Sale overview Universities Sold $58 million (including $3 million taxable) Projects summary: Renovate and update 425 bed spaces (St. Cloud, Moorhead) Remove 1,200 beds from system s inventory (Mankato/Gage) Add parking stalls (Metro State) Add 35,000 sq. ft. of new student union space at Metro State and WInona Renovate 33,000 sq. ft. of student union space (Winona, St. Cloud)

18 2013 Projects Institution Project Title Total Estimated Project Cost Campus Funding Total Cost of Bond Issuance Metropolitan State Construct Student Center $11,600,000 $1,695,000 $14,484,000 Metropolitan State Construct Parking Ramp $17,510,000 $1,000,000 $21,860,000 MSU, Mankato Demolish Gage Hall $6,000,000 $4,000,000 $2,220,000 MSU Moorhead Renovate West Snarr Hall $4,900,000 $0 $5,439,000 St Cloud State St Cloud State Winona State System - Taxable Bond Series Renovate East and West Shoemaker Renovate Atwood Student Center Renovate Kryzsko Commons $17,200,000 $4,200,000 $14,430,000 $4,970,000 $1,390,000 $3,973,000 $4,250,000 $2,250,000 $2,220,000 Planning and Design $3,000,000 $0 $3,330,000

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25 St. Cloud State University (Atwood) Updated common areas and consolidated student groups and organizations on the main floor with open, yet private, work areas 25

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27 2015 Revenue Bond Candidates Bond Year Title Institutions Program Type Project Amount Campus Contribution Student Housing Replacement Vermilion Residential $ 4,500,000 $ 1,000,000 Comstock Memorial Union Renovation and Addition Minnesota State University Moorhead Dining/Student Union $ 8,500,000 $4,500,000 Campus Funding Source Campus funds & outside funding sources 2015 Revenue Bond and CMU R&R Reserves 2015 Student Life Expansion Century College Residential Dining and Student Health Services North Wing College Center Minnesota State University, Mankato Inver Hills Community College Dining/Student Union $ 1,000,000 $ 200,000 New Fee Dining, Student Health $ 37,000,000 $ 2,000,000 Dining/Student Union $ 7,800,000 $1,000,000 Existing Revenue Fund Reserves General Fund Fund Balance 27

28 Future Planning in the Revenue Fund 28

29 Capital Planning Consolidated planning effort Tie together with the work on Charting the Future Capital Guidelines dual track Revenue Fund 2015 Capital budget 2016 Themes Keeping costs low, but Catching up on maintenance and repair Keep up with projects Position for the future Unknown 29 How rating agencies will look at higher ed Price sensitivity (cost of attendance)

30 Questions 30

Revenue Fund. Minnesota State Colleges and Universities. Revenue Fund Advisory Committee

Revenue Fund. Minnesota State Colleges and Universities. Revenue Fund Advisory Committee Revenue Fund Revenue Fund Advisory Committee February 3, 2014 Greg Ewig System Director, Capital Development Minnesota State Colleges and Universities The Minnesota State Colleges and Universities system