Ohio University 20 Year Capital Plan

Report
Ohio University
20 Year Capital Plan
CACUBO
September 30, 2012
Michael T. Angelini
Associate Vice President for Finance
Ohio University Capital Planning
Campus Reputation and History
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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
Ohio University Capital Planning
Campus Reputation and History
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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
Ohio University Capital Planning
The Tipping Point
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Sightlines data suggest that institutions with a $40$50/sq ft backlog are able to manage a healthy state
and keep a well-maintained campus
The university’s current backlog was estimated at
$78/sq ft in November, 2011
Projecting the same level of annual deferred
maintenance investment resulted in backlog
estimates of $120/sq ft in 10 years and total backlog
of $1 billion, or $200/sq ft, in 20 years!
We had reached the tipping point!
4
20 Year Plan
Impact on Deferred Maintenance
Backlog
5
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
$40.0
Est. FY06-20 Deferral: $170.8 M
$35.0
$30.0
$ in Millions
$25.0
Increasing Net
Asset Value
Deferral will grow each year if FY10 funding
levels are maintained
$20.0
Decreasing Net
Asset Value
$15.0
$10.0
$5.0
$2.2
$5.5
$5.9
$5.1
$8.1
$6.9
$6.8
$7.9
$8.2
$8.2
$8.2
$8.2
$8.2
$8.2
$8.2
$8.2
$8.2
$8.2
$8.2
$7.6
$7.6
$7.6
$7.6
$7.6
$7.6
$7.6
$7.6
$7.6
$7.6
$7.6
$0.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Annual Stewardship
One-Time Capital
6
Capital Improvement Plan - 20 Year Plan
Athens General Fund Deferred Maintenance Backlog Progress
7
Ohio University Capital Planning
20 Year Capital Improvement Plan
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The University faces difficult challenges with regard
to its facilities:
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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

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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
Ohio University Capital Planning
20 Year Capital Improvement Plan
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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
Ohio University Capital Planning
20 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
Ohio University Capital Planning
20 Year Capital Improvement Plan
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Features of the 20 Year Plan - FY2013 – FY2032:
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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
Ohio University Capital Planning
20 Year Capital Improvement Plan
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Plan Development:
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Process facilitated by Facilities Planning and Space
Management
Deans and Vice Presidents prioritized needs
University focused teams
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Focused consultant studies
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Housing, Deferred Maintenance, Debt Capacity
Facilities Planning Advisory Council endorsement
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Real Estate, Space Management, Sustainability, Project Teams
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 Planning
Space Planning Principles

The principles apply to the planning for new space
and the management of existing space
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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 Planning
Progressive Project Approval
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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
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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 Planning
Board of Trustees Oversight
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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 Plan
Plan Visuals
Pictures & 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
6 Years-No Action Map
18 18
10 Years-No Action Map
19 19
20 Years-No Action Map
20 20
6 Years-As Planned Map
21 21
10 Years-As Planned
Map
22 22
20 Years-As planned
Map
23 23
CIP Summary Sheet
24 24
CIP Summary Sheet
25 25
DRAFT: FY 2013 Annual Capital
Improvement Plan
June 5th, 2012 (Dollars in millions)
Estimated
Budget
Capital Projects
1
2
3
4
5
6
7
Lausche Heating Plant Replacement
8
8a
8b
8c
8d
9
O&M
Public
Private
100.0
Gifts
Grants
Deferred
M aintenance
Reduction
-
-
-
2.1
33.0
33.0
-
-
-
-
10.0
Indoor Multi-Purpose Facility
12.5
10.5
-
-
-
2.0
0.0
Violet L. Patton Center For Arts Education
8.0
-
-
-
-
8.0
0.0
Athena Classroom Renovation-Phase 2
0.5
0.5
-
-
-
-
0.0
Clippinger Hall-Mechanical Renovation
5.5
5.5
-
-
-
-
5.5
$16.9M
See Below:
Bromley Hall Academic Relocations
2.5
2.5
-
-
-
-
0.5
Lease Space Up fits for Academic Relocations
5.5
5.5
-
-
-
-
0.0
0.18
0.18
-
-
-
-
0.1
7.0
7.0
-
-
-
-
3.5
1.75
1.75
-
-
-
-
0.3
-
-
-
-
-
West Union Street Office Center Relocations
Tupper Hall Up fit
Lindley Hall Up fit (also see 9e below)
Planning Funds for FY2014
$4.8M
See Below:
OU-HCOM Cleveland design
1.0
-
-
1.0
-
-
0.0
Scripps College of Communication Phase 2, design
1.0
1.0
-
-
-
-
0.0
McCracken Rehabilitation, design
2.6
2.6
-
-
-
-
0.0
Ridges Master plan
0.2
0.2
-
-
-
-
0.0
Deferred Maintenance "Keep-Up" Projects: Athens
9a
9b
9c
9d
9e
9f
9g
9h
9i
9j
9k
9l
9m
9n
-
State
Capital
Performance Contract
Swing Space Implementation
7a
7b
7c
7d
7e
100.0
Debt
$18.6M
See Below:
West Green Roof Replacements
1.1
-
1.1
-
-
-
Keep-Up
Alden Library Repairs
2.7
-
2.7
-
-
-
Keep-Up
0.55
-
0.55
-
-
-
Keep-Up
Convocation Center Roof/Ramp Repairs
1.3
-
1.3
-
-
-
Keep-Up
Lindley Steam Piping Replacement
1.5
-
1.5
-
-
-
Keep-Up
Memorial Auditorium Repairs
1.5
-
1.5
-
-
-
Keep-Up
Exterior Painting/Woodwork Repair
0.75
-
0.75
-
-
-
Keep-Up
Peden Concrete Restoration
0.75
-
0.75
-
-
-
Keep-Up
Pruitt Field Turf Replacement
1.1
-
1.1
-
-
-
Keep-Up
Campus Lighting Improvements
0.5
-
0.5
-
-
-
Keep-Up
Cutler & Wilson Halls Waterproofing
0.52
-
0.52
-
-
-
Keep-Up
Campus Roadway Improvements
0.75
-
0.75
-
-
-
Keep-Up
Stocker Air Handling Unit Replacements
0.5
-
0.5
-
-
-
Keep-Up
Other Deferred Maintenance Projects under $500,000
5.1
-
5.1
-
-
-
Keep-Up
Clippinger/Accelerator Bldg. Roof Repairs
26
DRAFT: FY 2013 Annual Capital
Improvement Plan
June 5th, 2012 (Dollars in millions)
Capital Projects
10
Softball Lighting
11
Peden Turf Replacement
12
General Fund Athens: Safety Projects
$1M
12a
Elimination 15 Passenger Vans
12b
Other Safety Projects
13
Deferred Maintenance Projects: Regionals
13a
Shoemaker Center Repairs, Chillicothe
13b
Shannon Hall Renovations, Eastern
13c
Herrold Hall Renovations, Lancaster
13d
Deferred Maintenance "Keep-Up" projects
14
High Visibility Grounds Project, Athens Campus
14a
College Green Gateways, Sidewalks, Amphitheater Rehab
14b
Emeriti Park Lighting, Pond Dredging, and Irrigation
14c
Richland Avenue Sidewalks and Landscape
14d
Lindley Park Rehabilitation
15
Housing Development Plan
$110.9M
15a
Residence Hall Construction, Phase 1
15b
Wolfe Street Demolition
15c
South Green Parking Replacements
15d
South Green Utility Infrastructure
15e
Bush Hall Rehabilitation
15f
Minor Capital Deferred Maintenance Projects
15g
Jefferson Hall Renovation Planning
15h
Bromley Hall Renovations
16
Culinary Services Improvement Plan
$7.5M
16a
Nelson Commons, Phase 2
16b
Minor Capital Deferred Maintenance Projects
17
IDP Classroom Equipment: Athens and Regional
Total FY 2013 Capital Activity
Debt
0.25
-
-
0.25
-
-
Keep-Up
0.80
-
-
0.80
-
-
Keep-Up
-
-
See Below:
State
Capital
-
O&M
-
Public
Private
Gifts
Grants
Deferred
Maintenance
Reduction
Estimated
Budget
0.275
-
-
0.275
-
-
0.0
0.725
-
-
0.725
-
-
0.5
6.8
-
3.8
3.0
-
Keep-Up
Keep-Up
Keep-Up
Keep-Up
2.0
-
-
2.0
-
0.0
0.0
0.0
0.0
See Below:
82.4
-
-
-
-
6.6
1.1
82.4
-
-
1.1
-
-
2.3
0.75
-
-
0.75
-
-
0.0
1.1
-
-
1.1
-
-
0.0
12.0
-
-
12.0
-
-
6.0
4.50
-
-
4.50
-
-
Keep-Up
3.00
-
-
3.00
-
-
0.0
6.0
-
-
6.0
-
-
3.0
6.5
-
-
6.5
-
-
3.25
1.0
-
-
1.0
-
-
Keep-Up
0.54
-
-
-
-
0.0
See Below:
$
329.1
$ 152.6
0.54
$ 23.0
$ 44.0
$ 100.0
$ 10.0
43.6
27

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