Debt Capacity and Facilities Master Plan Priorities for Next Capital - - PowerPoint PPT Presentation

Debt Capacity and Facilities Master Plan Priorities for Next Capital Improvement Program (CIP)

Strategic Planning Retreat November 14, 2015 Diane E. Snyder, CPA, M.S. Vice Chancellor for Finance and Administration

• 1. Provide skilled technical workforce to meet present and future

employer needs in critical high demand, high growth industries in our region.

• 2. Create capacity for a growing number of students to

successfully complete training and get a job or transfer to a university. Alamo Colleges - Grew 24% since 2005, adding 12,700 students since last bond election

(15 year Demographic growth + 46%, +30,000 students by 2030)

San Antonio – Expected to grow 1,000,000 people by 2030

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Why is CIP investment needed?

Alamo Colleges must continue to be a catalyst in providing a skilled workforce for the economic benefit of our region.

Best practice followed in 2005 CIP:

• Citizen's CIP Bond Committee (Plan Development prior to

November 2005 Ballot)

• Citizen's CIP Oversight Committee (Through 2010)
• Ensure expenditures in accordance with Bond Projects approved by

Voters

• Review of funds proposed to be moved between projects
• Periodic reports to the Public and Alamo Colleges Board of Trustees

CIP includes Citizen Involvement

(Taxpayers, Business, Industry, Students, Senior Citizens' Organizations)

2005 versus 2016

2005 CIP 2016 Proposed CIP

• 1. Student Growth
• 2. Aging Facilities
• 3. Community and Workforce Needs
• 1. Student Growth (+ 30K in 15 years)
• 2. Aging Facilities
• 3. Community and Workforce Needs
• 4. Student Support for Completion

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Skilled Technical Workforce in Key Industries

1 1st

st Responders

Responders: : Must have realistic training

facilities to be prepared in the critical early stages

• f an emergency. San Antonio expected to add 1

million people by 2030.

Advanced Manufacturing in Advanced Manufacturing in Transportation – Aerospace and Transportation – Aerospace and Automotive Automotive: : Needs ongoing

specialized training for success of industries….SA2020

Hospitality Hospitality: : Employs 122,500 people with

annual payroll of $2.5 billion. Economic impact to San Antonio region is $13.4 billion….Travel and Tourism Impact Study Oct 2014.

Information Technology and Information Technology and Cybersecurity Cybersecurity: For every 10 jobs posted

in the broad IT field, just 1 person had the appropriate training…SA2020

Health Health: : 1 in every 6 jobs in

San Antonio is in healthcare – $25 billion economic impact…COSA 2016 Budget Alamo Colleges must maintain its competitive edge to prepare workforce in rapidly changing industries.

STEM

Agriculture Agriculture:

: Second largest industry in Texas.

220,000 farms in Texas. Provides most affordable and healthy food supply in the world…Economy Watch

 Critical Regional Workforce Needs:

• Information Technology/Cybersecurity
• Medical and Allied Health
• Advanced Manufacturing, Transportation & Logistics
• Hospitality
• Agriculture
• 1st Responders

 2005 CIP: Built two state-of-the-art Allied Health Buildings (SAC and SPC)

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Centers of Excellence

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Centers of Excellence

 Deferred maintenance, poor building conditions (water intrusion, roofs, HVAC)  Upgrade technology:

• To meet program needs
• Learning-centered instructional needs

 Too many small classrooms; combine some rooms  Student Support facilities cramped, spread-

• ut across campus

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Old Buildings: Under-utilized

DEFERRED MAINTENANCE: Requirements Breakdown Top 36 Buildings

9 DEFERRED MAINTENANCE UPDATE

206 Buildings 170 Buildings

84% of Inventory

Top 36 Buildings 60% $117.6 MM 40% $77.9 MM $196 MM FCI $340 MM Recommendations+FCI 29%

$98.8 MM

170 Buildings FCI 71%

$241.2 MM

Identified Project Buildings

5/12/2015

⋅ Increased $13m in Student Services since 2010

– Advisors – Tutoring – Welcome centers (admissions, testing, bursar, SFA, …)

⋅ Facilities need expansion and renovation

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Student Support Services

Priority Facility Needs: $722M

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Now is the time to address $400M, the most critical needs

 Need to start planning on next CIP to provide capacity at NVC and NLC by Year 6 (2021) – support 20% growth in on-campus FTSE  Address older building deferred maintenance to increase utilization  Add buildings to support critical workforce programs  Add/Adapt student support buildings

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NVC Exceeds Capacity –FTSE

FTSE = Full time equivalent student (12 CH)

Grow/Adapt Facilities: add capacity via voter authorized debt

• November Board Retreat – authorize est. Citizen’s

Committee

• Preparation for bond election – 12 months
• Election for bonds –November 2016
• Initial Sale of Bonds –Spring 2017
• Build capacity for growth

Ø 2017: $135 Million Ø 2019: $135 Million Ø 2021: $130 Million

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Need $400M CIP or may limit future enrollment

$400 Million CIP with no tax increase

Source: First Southwest

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Debt Capacity Analysis: GO Bonds

Voter Auth. Nov. 2016, Bonds issued Spring 2017 30 Year structure, issued in three series

Assumes 2-5% valuation growth first 5 yrs.; collections rate 98.5%

Issue $400M with NO tax increase

 Prior CIP was approx. equal $ alloc. to each college

• Did not consider College # Students variances
• Did not consider older renovation needs
• Did allocate $ off the top for Technology

 $400M New CIP – allocation

• a. Determine % to fund areas at all 5 colleges:

(IT, Security, Sustainability/ Energy, new regional center (NCC), Signage/Physical Plant),

• b. Consider full-time student equivalent (FTSE) “on-

campus” forecasted at 2025 to allocate $ per college

• c. Consider higher $ on older colleges/renov. (SAC/SPC)

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Options on allocation of $400M

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Northeast Lakeview College Priorities: $ 79M

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Northwest Vista College Priorities: $110M

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Palo Alto College Priorities: $106M

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San Antonio College Priorities: $156.2M

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• St. Philip’s College

Priorities: $151.5M

Options for North Central Land: a)“online” Regional Center used by all b) secondary campus to NVC

Ø Develop a new campus focused around the quickly developing "on- line" students Ø Build a traditional campus just with less bricks and mortar Ø Focus construction on facilities for which student have to come to campus; spaces that host courses or elements of courses that require "hands-on" learning (i.e. Chemistry, Biology, Geology, Physics, and Kinesiology lab spaces)

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Ø Construct testing and open computer laboratory space where students come to the campus and take tests in person; lectures primarily take place "on-line” Ø The library should be planned to be as "virtual" as possible with the constructed facility housing a minimum

• f stacks and several group learning

spaces for students that want to gather as a group to discuss the courses or work together in person on projects Ø Build less traditional classroom spaces

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Potential IT Investment Areas

• Form Citizen's CIP Bond Committee

Ø Taxpayers, Business, Industry, Students, Senior Citizens' Organizations Ø Plan Development prior to November 2016 Ballot Ø Helps develop preliminary marketing plan which may include: Town hall meetings, TV/radio/newspaper releases, select PR firm

• Facilities Plan – to Board by May or June 2016
• Target Election: November 2016

Next Steps

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Voted Limited Tax Bonds: Typical Project Plan Steps

Event Timing

Facilities Study is commissioned- Board appoints Citizen’s Facilities Committee to work with Staff and Consultant(s) Citizen’s Committee also determines preliminary marketing plan which may include: Town hall meetings, TV/radio/newspaper releases, select PR firm 6-9 months in advance of Board presentation Results of Facilities Study is presented to Board Board approves Order calling for election Bond Steering Committee appointed- marketing period begins 2-4 months prior to Election Notices posted/published Hold PTA/Civic Organization/Town hall meetings Conduct Election Uniform Election Days November/May Canvass election returns 8-11 days post Election End of Election contest period- Bonds may be issued Earliest is 30 days after Canvassing

Source: Fulbright & Jaworski, LLP, First Southwest

Appendix: Debt Supporting Data

Facilities Improvements to Date

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IT Support funds used for secure wireless on all campuses, fiber linkage, E-learning management, data storage, VOIP, data security, district-wide infrastructure

Historical Debt Activity

FY Action Taken

2006 Issued $110.3 million in Ltd Tax Bonds and $30.4 million in MTN 2007 Issued $334.6 million Ltd Tax Bonds, $81.1 million MTN, $32.3 million Revenue Bonds 2009 Called existing debt of $5.5 million; Issued $11.9 million in MTN 2011 Cash defeased $525K Series 2007 MTN; $55 million new issue MTN, Series 2011 2012 Refunded all outstanding Revenue Bonds with $78.1 million issue Revenue Financing System Series 2012 A&B ($15 million new money) Refunded $77.9 portion Ltd Tax 2007 /2007A with $74.1 Ltd Tax 2013 Cash defeased $1.6 million Series 2007 MTN 2014 Cash defeased $2.3 million Series 2007 MTN 2014 Refunded $48.5 million 2007 MTN with $40.7 million Refunding issue 2015 Cash defeased $4.9 million Series 2007 MTN

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Estimated Outstanding Debt @ 8/31/16 (in millions)

Limited Tax MTN Revenue Total Outstanding @ 8/31/15 $364.9 $99.4 $64.0 $528.3 Total Debt Service FY 16 ($10.0) ($9.8) ($4.7) ($24.5) Debt Management Strategies FY 16 (1) (2) ($9.1) ($12.8) $55.0 $33.1 Outstanding @ 8/31/16 $345.8 $76.8 $114.3 $536.9

Average Life is the weighted average maturity in years of the debt- indicates how rapidly principal is expected to be paid off

Ltd Tax Debt = 13.043 years (11-1-15)

MTN Debt = 6.001 years (11-1-15)

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(1) Includes defeasance of the Series 2006/2007 MTN and refunding of Ltd Tax 2006/2006A (2) Issuance of Revenue Bonds for DSO Building FY2016/2017

Total Outstanding Debt

Total Principal Outstanding As of Limited Tax Bonds 11-1-15 Limited Tax Bonds, Series 2012 $ 74,110,000 Limited Tax Bonds, Series 2007A 34,140,000 Limited Tax Bonds, Series 2007 173,420,000 Limited Tax Refunding Bonds, Series 2006A 45,020,000 Limited Tax Refunding Bonds, Series 2006 38,180,000 $ 364,870,000 Maintenance Tax Notes Maintenance Tax Notes, Series 2011 $ 39,325,000 Maintenance Tax Notes, Series 2007 64,905,000 Maintenance Tax Notes, Series 2006 20,480,000 $ 99,360,000 Revenue Bonds Revenue Financing System, Series 2012A $ 54,575,000 Revenue Financing System, Series 2012B 4,680,000 $ 59,255,000 Total Principal Outstanding $ 523,485,000

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Comparative Debt Statistics

Peer Community College Tax Supported Revenue Supported Unrestricted Net Assets

Alamo Colleges $472.7 million $64.0 million $86.2 million Austin $82.7 million $169.6 million $22.0 million Collin County $34.6 million $3.2 million $235.7 million Dallas County $321.5 million $15.2 million $237.8 million El Paso none $47.1 million $34.7 million Houston $645.9 million $194.1 million $118.2 million Lone Star $458.8 million $114.4 million $52.5 million San Jacinto $279.0 million None $77.9 million South Texas College $88.8 million None $146.2 million Tarrant County None None $206.3 million

As of April 1, 2015 Source FirstSouthwest:, MAC website, CAFRs

Peer Community College Per Capita Per FTSE As % of Taxable Assessed Value

San Jacinto $558 14,285 .71% Houston $319 13,733 .50% Alamo Colleges $277 13,991 .47% Lone Star $205 11,838 .36% Dallas County $136 6,799 .20% South Texas College $89 3,093 .26% Austin $50 4,523 .07% Collin County $38 1,806 .04% Tarrant County $3 218 .01% El Paso None None n/a

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Comparative Debt Statistics

Tax Supported Debt- 2014

As of April 1, 2015 Source FirstSouthwest:, MAC website, CAFRs

Available Debt Instruments

Purpose Auth Repayment Debt New Building Furnishing Instrument Construction Acquisition Renovate & Equipping Land Voted Limited Yes No Yes Yes Yes Voter Levy Tax Bonds Maintenance No No Yes Yes* No Statute Levy or Operating Tax Notes Combined Fee Yes Yes Yes Yes Yes Board Operating Revenue Bonds * Equipping of existing facilities more flexible than the equipping of new facilities.

Source: First Southwest

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