Presentation Transcript

1. Ohio University20 Year Capital Plan

   CACUBO September 30, 2012 Michael T. Angelini Associate Vice President for Finance
2. Ohio University Capital PlanningCampus Reputation and History Ohio University, founded in 1804, is known for its beautiful setting and character, as well as its academics and student life There are 200+ Athens campus buildings of various ages, including 40+ residential housing and dining halls Past capital planning for new construction and renovations was largely dependent on biennial State Capital appropriations and funds generated through debt issuance 2
3. Ohio University Capital PlanningCampus Reputation and History The University recognized that the capital needs were greater than available funds In the past, a variety of campus constituents worked together to identify the best uses for the limited funding Unexpected donor gifts tended to complicate and reprioritize projects – there was no ‘grand scheme’ The university’s deferred maintenance had not been adequately funded, as corroborated by Sightlines studies of investments in the campus facilities 3
4. Ohio University Capital PlanningThe Tipping Point Sightlines data suggest that institutions with a $40-$50/sqft backlog are able to manage a healthy state and keep a well-maintained campus The university’s current backlog was estimated at $78/sqft in November, 2011 Projecting the same level of annual deferred maintenance investment resulted in backlog estimates of $120/sqft in 10 years and total backlog of $1 billion, or $200/sqft, in 20 years! We had reached the tipping point! 4

5. 20 Year PlanImpact on Deferred Maintenance Backlog

6. At current funding levels, backlog will grow by $130 M by 2020 Gap between funding and target will increase from $8 to $18 M General Fund – Total Capital Spending Est. FY06-20 Deferral: $170.8 M Deferral will grow each year if FY10 funding levels are maintained Target Investment Increasing Net Asset Value Decreasing Net Asset Value
7. Capital Improvement Plan - 20 Year Plan Athens General Fund Deferred Maintenance Backlog Progress 7
8. Ohio University Capital Planning20 Year Capital Improvement Plan The University faces difficult challenges with regard to its facilities: The state skipped the FY2011-FY2012 cycle for biennial state capital appropriations Important planned projects have been delayed Deferred Maintenance continues to grow and it is noticed Housing stock is deteriorating faster than it can be rehabilitated and doesn’t offer options students want 10 Year Residential Housing Plan approved by Board - Feb, 2011 The coal fired heating plant is near the end of its useful life and regulatory restrictions are likely to increase 8
9. Ohio University Capital Planning20 Year Capital Improvement Plan A different approach to capital planning has been undertaken resulting in a 20 Year Capital Plan The plan uses future state appropriations to ‘catch up’ deferred maintenance and ‘keep up’ buildings Debt issuance, public/private partnerships, gifts and grants are considered as funding sources for major rehabilitation projects and infrastructure replacement A subset of the overall 20 year plan, the Six Year Capital Plan, is approved by the Board of Trustees annually and its cash flows and debt service requirements inform both operating and capital budgeting 9
10. Ohio University Capital Planning20 Year Capital Improvement Plan Actions taken in order to prepare for the use of debt: Undertook a comprehensive debt affordability study in support of funding a 20 Year CIP which incorporates the Residential Housing study Debt capacity analyses were performed for several scenarios considering current outstanding debt, projected new debt, additional debt service and the effect on operating expenses, impact on balance sheet and key ratios, and peer comparisons Progress updates were made to the Board of Trustees at each meeting Developed a debt policy; approved by the Board in September, 2011 Prepared the 20 Year CIP arriving at the projected debt need Met with rating agencies on campus and in NYC prior to issuance Issued bonds These efforts involved nearly a year in the planning and implementation 10
11. Ohio University Capital Planning20 Year Capital Improvement Plan Features of the 20 Year Plan - FY2013 – FY2032: Planned in a 20 year context that removes some outdated buildings Addresses top priority programmatic needs Utilizes debt for major rehabilitation of existing buildings Utilizes anticipated state appropriations to “keep up” buildings and “catch up” on deferred maintenance Utilizes swing space so we can vacate buildings and do a better job of upgrading systems Leverages gift and grant funding Utilizes Residential Housing Auxiliary debt to upgrade housing stock Utilizes Performance Contracting to implement energy conservation measures with payment from Central Utility Account over 15 year payback period Utilizes Public/Private partnership for Heating Plant replacement 11
12. Ohio University Capital Planning20 Year Capital Improvement Plan Plan Development: Process facilitated by Facilities Planning and Space Management Deans and Vice Presidents prioritized needs University focused teams Real Estate, Space Management, Sustainability, Project Teams Focused consultant studies Housing, Deferred Maintenance, Debt Capacity Facilities Planning Advisory Council endorsement Cross Organizational Faculty, Staff, Students Deans and Vice Presidents endorsement Approval of Capital Funding and Priorities Committee Revamped plan development, annual plan update, and project approval process 12
13. Ohio University Capital PlanningSpace Planning Principles The principles apply to the planning for new space and the management of existing space All academic administrative and auxiliary space; both on and off campus Facilities is responsible for the day-to-day oversight and stewardship of space and its best utilization Space Management processes will be transparent Space requests and assignments follow a process to insure space efficiency, optimal utilization and responsiveness to current and emerging needs
14. Ohio University Capital PlanningProgressive Project Approval Assures capital projects are in keeping with the University Strategic Plan and do not conflict with each other Projects will be reviewed and approved by the appropriate individuals at various stages in a project life Planning study, programming, schematic design, detail design, contract award and construction Facilitates tracking and reviewing the sources, sufficiency and availability of funds at milestones throughout the project life
15. Ohio University Capital PlanningBoard of Trustees Oversight The 20 year Capital Plan will be refreshed annually and Board approval of the Six Year Capital Plan will be requested We will continue to refine our debt models and adjust our sources and uses to reflect evolving economic conditions and state realities Periodic informational updates to Board Individual Board approvals requested for projects of $500,000 or greater once developed Board approval requested for bond issuances

16. 20 Year PlanPlan VisualsPictures & Summaries

    6, 10, 20 Years – Building Age Maps No Action – Same Annual Investment Levels 20 Year Capital Improvement Plan Investments 20 Year Capital Plan ‘Sources and Uses’ Summary Totals by Biennium Summary Totals by Project Type FY 2013 Annual Capital Improvement Plan 17

17. 6 Years-No Action Map

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18. 10 Years-No Action Map

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19. 20 Years-No Action Map

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20. 6 Years-As Planned Map

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21. 10 Years-As Planned Map

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22. 20 Years-As planned Map

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23. CIP Summary Sheet

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24. CIP Summary Sheet

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25. DRAFT: FY 2013 Annual Capital Improvement Plan June 5th, 2012 (Dollars in millions)
26. DRAFT: FY 2013 Annual Capital Improvement Plan June 5th, 2012 (Dollars in millions)