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Systemwide Capital Planning A Financial Perspective. Elvyra San Juan , Assistant Vice Chancellor, Capital Planning, Design & Construction Robert Eaton , Director, Financing and Treasury. Agenda. Campus Master Plan Five-Year Capital Outlay Plan State Facilities

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Systemwide capital planning a financial perspective

Systemwide Capital PlanningA Financial Perspective

Elvyra San Juan,

Assistant Vice Chancellor, Capital Planning, Design & Construction

Robert Eaton,

Director, Financing and Treasury


  • Campus Master Plan

  • Five-Year Capital Outlay Plan

  • State Facilities

  • Funding for State Facilities

  • State Appropriations

  • Authorizing Campus

  • Space and Facilities Database

  • Non-State Facilities

  • Funding for Non-State Facilities

  • Combined Funding & Facilities

  • Equipment Financing

  • Public/Private Developments

Campus master plan
Campus Master Plan

  • Show existing and anticipated facilities necessary to accommodate a specified enrollment at an estimated target date

  • Are generally revised every 10 years

    • 2 - 3 year process

    • Requires an Environmental Impact Report (EIR)

    • Requires Trustees approval

State university administrative manual
State University Administrative Manual


  • Policies and Procedures for Planning, Design, Construction, Plant

  • Campus responsibilities for design/construction

  • Building Official and Deputy Building Official

  • Forms

Five year capital outlay plan
Five-Year Capital Outlay Plan

  • Annually campuses submit a proposed schedule for its Campus Master Plan implementation for a five-year period

  • Includes both State and Non-State projects

  • Amendments/Revisions are allowed with Trustee approval

State facilities projects
State Facilities/Projects

  • Infrastructure Projects

  • Library Buildings

  • Academic Buildings

  • Administration Buildings

Funding for state facilities
Funding for State Facilities

  • General Obligation Bond – voter approved

  • Lease Revenue Bonds – legislatively approved

  • Annual funding provided by State Bonds ≈ $345 Million

    • “Free Money” for the CSU – CSU doesn’t pay the debt service

    • Have specific encumbrance and reversion dates

    • Utilized for Capital Renewal, Minor, and Major projects

Funding for state facilities1
Funding for State Facilities

  • Capital Renewal Projects

    • Upgrade/replace building systems (HVAC, lighting, etc.)

    • $50 million available systemwide

    • $2 million limit per campus

  • Minor Projects

    • Upgrade/renovate academic spaces

    • $25 million available systemwide

    • $400K limit per project

  • Major Projects:

    • Approx. $270 million for new construction systemwide

    • Generally based on enrollment projections and space entitlements

Funding for state appropriations
Funding for State Appropriations

  • Budget Act governs

  • CSU – Agency 6610

    • Major Capital Outlay

      • Line Item Appropriations

      • Phased Funding

        • 6610-302-xxxx

      • Streamlined Funding

        • 6610-302-xxxx

        • xxxx refers to bond funding

Funding phased p 06 07 w 07 08 c 09 10
Funding – Phased – P 06/07 W 07/08 C 09/10

  • Budget Act – Section 1.8 for money life

  • Preliminary Plans – 1 year

  • Working Drawings– 1 year

  • Construction – 1 year to secure a proceed to bid, and 2 additional years to encumber (3 total)

  • 2 years to spend encumbered funds or you lose them (revert)

  • PWB – Public Works bond approves preliminary plans, scope charges augmentations

  • DOF authorizes funding by phone

Funding streamlined pwc
Funding – Streamlined - PWC

  • PWC– 2 years to encumber, 2 years to spend

  • No DOF/PWB approvals

  • No scope charges augments

Budget act provisional language
Budget Act Provisional Language

  • Provides governing language that is different than Section 1.8

  • Reporting

  • Project Savings

  • Deadlines for money

Authorizing campus
Authorizing Campus

  • CPDC issues request for Allocation Order (RAO)

  • Resource Mgmt (F.Services) to generate A. Order

  • Project Number

  • CFIS

Capital project reporting
Capital Project Reporting


  • Account Codes

  • Use for reporting to Board, and Sacramento agencies

Space facilities database
Space & Facilities Database

  • Campus Annually Reports

  • Insurance

  • New Space $/SF

Csu debt outstanding
CSU - Debt Outstanding

  • $3.61 Billion as of January 2, 2009

    • SRB - $2.67 Billion

    • Commercial Paper - $205 Million

    • Auxiliary Organization Bonds - $185 Million

    • State Public Works Board - $492 Million

      • State appropriates money each year to CSU for the debt service

    • Other - $64 Million

Non state facilities projects

Parking Structures

Health Centers

Student Unions

Student Housing

Cont. Education

Foundation Bldgs.

Recreation Centers


Public/Private Developments

Non-State Facilities/Projects

Funding for non state facilities
Funding For Non-State Facilities

  • Generally funded through Systemwide Revenue Bonds (SRB)

  • Other Funding Sources:

    • Auxiliary Organization Revenue Bonds

    • Donations/Gifts

    • Energy Incentive/Rebates

    • Banks (Auxiliary Organizations Only)

    • Interest Earnings from Student Fees

Systemwide revenue bonds
Systemwide Revenue Bonds

  • Pledge of the CSU Revenue Programs

Systemwide revenue bonds1
Systemwide Revenue Bonds

Program flexibility

  • SRB funds can be loaned to Auxiliary Organizations

    • Loan agreement between CSU and the Auxiliary

    • Off-campus Auxiliary projects can be financed and the Auxiliary can retain ownership of the land

  • CSU can issue Variable Rate debt

  • Tax-Exempt or Taxable

Systemwide revenue bonds2
Systemwide Revenue Bonds

Executive Order 994 defines the Debt Service Coverage Ratios

  • Campus – Overall coverage ratio of Net Operating Revenues required - 1.35x Debt Service

  • Program – Campus – 1.1x Debt Service (Housing, Parking) – Existing program can subsidize new projects

  • Standalone Project – Campus – 1.1x Debt Service

  • Auxiliary – Overall coverage ratio of 1.25x Debt Service

Systemwide revenue bonds3
Systemwide Revenue Bonds

CSU Debt Ratings

  • Aa3 from Moody’s

  • A+ from Standard & Poor’s

  • CSU’s ratings better than the State of California (A1/A)

Systemwide revenue bonds4
Systemwide Revenue Bonds

The Trustees receive regular reports on the CSU’s Debt Capacity

  • Debt capacity is a measure of how much debt an institution can support at a given credit rating level

  • November 2007 BOT report – based on the ratio of Debt Service to Total Resources, the CSU has additional Debt Capacity thru 2012 of $4.5 Billion

Commercial paper
Commercial Paper

  • Variable rate, short-term borrowing, done through the CSU Institute

  • Variety of purposes:

    • “Bridge” financing for SRB projects

    • “Permanent” financing for short-term capital projects approved by the Trustees

    • Funding for the CP/Equipment Program

  • Tax-Exempt or Taxable

Combined funding facilities
Combined Funding & Facilities

  • It is possible to combine multiple funding sources for a project

    • Except State funds for a non-State facility

  • Funding a State facility with revenue bonds is not encouraged

  • It is possible to combine a State and Non-State facility into one project

    • Accounting must have a clear understanding of the use of space and construction costs

Equipment financing
Equipment Financing

  • Financing is provided through a lease, with a non-appropriation clause:

    • Lease provided by a third-party vendor

      • Current approved vendors: DLL Public Finance, Key Government Finance, Koch Financial, Providence Capital

    • Lease provided through the CP/Equipment Program

      • Generally at tax-exempt rates

      • Equipment can be financed for 1-8 years

      • $100,000 to $5 million per transaction

      • Rate is reset annually by Financing & Treasury – currently 3.6%

      • Payments are quarterly

      • Campus acquires equipment and then is reimbursed

Public private developments
Public/Private Developments

  • Allows for private entities to utilize campus land for continued support of the campus mission

  • Typical Structure

    • Campus land is leased to an Auxiliary Organization

    • Auxiliary Organization sub-leases land to a private entity

    • Private entity develops land and provides a lease payment

  • Projects must be reviewed by the Land Development Review Committee

  • Governed by Executive Order 747