MSUSA Capital Bonding Request Proposal 20082013

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MSUSA Capital Bonding Request Proposal 2008-2013
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Bonding Proposal Overview the what and the why

• Maintaining Existing Facilities is a Key Focus of
  the MnSCU Bonding Request
• As the steward of one-third of all state-owned
  buildings, MnSCU responsibly has made
  preservation of those buildings its top priority.
  MnSCUs bonding proposals in Higher Education
  Asset Preservation and Repair (HEAPR) funds,
  which make the unglamorous, yet vital, repairs to
  leaky roofs, broken furnaces, outdated electrical
  wiring and other critical safety repairs that
  extend the life of existing facilities.
• Moreover, every MnSCU campus generally receives
  HEAPR funds, meaning that HEAPR investment will
  benefit all MnSCU campuses, not just a select
  few.

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Bonding Proposal Overview- Continued

• HEAPR funding can drastically increase the energy
  efficiency the buildings on our campuses. Many
  of these buildings were built between 1950-1975,
  and were not built according to high efficiency
  standards. In addition, HVAC systems across the
  system are leaking, unable to adequately heat and
  cool classrooms, and waste enormous amounts of
  energy. New roofs and HVAC systems at many these
  facilities will be insulation against fluctuating
  energy costs.
• HEAPR funds are also exempt from the traditional
  one-third debt service requirement, providing
  more direct value to students.
• Since 2000, the HEAPR program has focused on
  reduction of the system-wide backlog of
  maintenance and repair, estimated in 1999 to be
  500 million. A 2005 study now estimates the
  backlog at 635 million. Backlog is defined as
  work not accomplished due to lack of funding
  resources.

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Bonding Proposal Overview- Continued

• Bonding funding is sometimes the only way our
  campuses can renovate existing buildings, expand
  with new ones, and acquire new land
• There are many projects proposed every year that
  benefit our campuses (look at the hand out for
  the 2008-2013 request)
• A Bonding Investment Would Inject Cash into Local
  Communities
• Passing bonding bills provide a fresh infusion
  of cash into urban, suburban and rural
  communities, generating a high demand for
  construction services and energizing secondary
  industries that serve the construction sector.
  Indeed, creating construction projects would spur
  job creation and help sustain the states
  economy.

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What is Debt Service?

• Both MnSCU and the U of M must contribute its own
  funds to help pay for a project.
• The formula requires that a campus must pay 1/6
  of the project out of its budget and the Office
  of the Chancellor must pay 1/6 of the cost.

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MnSCUs 2008-2013 Bonding Request

• At the MnSCUs Board of Trustee meeting on May
  16, 2007 the preliminary bonding request was
  unveiled. The Proposed Capital Budget includes
  110 million for major repair and replacement
  projects HEAPR and 237.3 million in line-item
  projects, property acquisition and demolition.
  The request to the Legislature and the Governor
  is for 271 million and 76.3 million in debt
  service directly financed by the System and each
  college and University gaining a capital project.
  The total plan calls for a total appropriation of
  347.3 million.

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MnSCU Bonding Appropriation History ( in
Millions)

• 2007 Requested 33.8 and received no funding
• 2006 Requested 280.4 and received 191.4
• 2005 Requested 292.6 and received 213.6
• 2004 Requested 274.9 and received no funding
• 2003 Huge budget cuts, no request
• 2002 Requested 251 and received 218.6
• 2001 No Request
• 2000 Requested 230 and received 131.1

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Bonding site visits this year

• Both the House and Senate Capital Investment
  committees will be conducting site visits to some
  of our Universities starting in September and
  ending in October. The locations and schedules
  have not been scheduled yet.
• If your University is selected for a visit, the
  office would like to assist any students that
  might be going along on the tour. We can discuss
  talking points and details.

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What Next?

• MSUSA staff will be working with the Office of
  the Chancellor to discuss messaging and strategy
  in how to sell the request at the legislature.
  Our first meeting is scheduled for Thursday July
  26. If you are interested in finding out more,
  please contact MSUSA.
• Any Questions?