Major Maintenance Bond update Robert Meister, Chief Finance Officer Josh Davis, Chief Operations Officer Presented to the School Board * August 11, 2020
Maintenance Opportunity We have an opportunity to work with the County to address Major and Preventative Maintenance needs ● Ability to secure cheaper funding due to low interest rates ● We have a robust backlog of Major Maintenance projects that additional funding can begin to address ● Reinvesting existing debt service savings can better support Preventive and Recurring Maintenance needs ● This is a great first step toward achieving long-term sustainability of our Maintenance programs
County Administration has identified potential savings opportunities Debt Service Savings Actual Debt Service Programmed 2020A 2020B Total Potential Refunding 2020 VPSA 2020A GO Total Total Savings Saving Savings FY2021 $812,276 $3,935,356 $4,747,632 $6,285,875 $1,538,243 $249,009 $1,787,252 FY2022 $3,004,020 $4,992,500 $7,996,520 $9,574,349 $1,577,829 $445,966 $2,023,795 FY2023 $2,948,340 $4,843,000 $7,791,340 $9,339,539 $1,548,199 $294,771 $1,842,970 ● Low rates enable us to achieve savings from what was forecasted on existing bonds ● Ability to re-invest savings in either: ○ Operations (Preventative/Recurring Maintenance recommended) ○ Offset cost on new debt ○ Harvest savings
Preventive Maintenance Needs HVAC Roofing • FY2021 PM budget is $2.9M with the following Access Control priorities: Fire • HVAC • Elevator Structure • Fire Protection Electrical • Plumbing Backflow Prevention • Budgeted PM funding shortfall is $4.3M Plumbing • Allocating Debt Service savings will help offset this Vertical Envelope shortfall Elevators • Recurring repairs of HVAC and plumbing systems Interiors • Interiors (Painting), Electrical if possible Site Trailers
Major Maintenance Priorities Project Types HVAC Access Control Roofing Structure / Vertical Envelope Electrical Fire Site Interiors Plumbing Elevators Contingency / Other
Major Maintenance Budgeting Prioritized Needs vs. ANNUAL Plans •Estimated Capital Needs total $231m between 2021-25 • FCI-Level1 projects are highest priority because of scope and •All EUL projects accomplished in 5 years with $46m annual long-term benefits budget • Deferred projects will negatively impact FCI measures and •If smaller budgets are necessary, projects shifted to later increase higher priority Needs years •Once Annual Budget LEVELS are set, prioritization and Annual FLAT communication about individual projects will take place Budget examples FCI-Level3 (Levels 1+2+3) ❸ Annual 5 yr. FCI FY21-22 FY22-23 FY23-24 FY24-25 FY25-26 Avg. ❸ FCI-Level2 ❶ (Levels >10% $9m $30m $6m $7m $19m $14m 1+2) ❷ ❷ 5%- ❷ $17m $17m $28m $10m $7m $24m 10% FCI-Level1 (Level 1 only) ❸ <5% $10m $18m $17m $11m $19m $15m ❶ ❶ Annual $36m $75m $32m $24m $62m $46m $231m over 5 years
We have identified ~$25M for MM in FY2021 Description Funds Carry Forward from Prior Years $6,900,000 (Estimated) Base Operations Funding $9,219,100 Bond Sales (7/22) $2,300,000 Bond Sales (7/22) $7,200,000 Total for FY2021 $25,619,100
Major Maintenance Priority Projects for FY2021 Project Type Projected Expenditure (% of Budget)* HVAC 44% Roofing 11% Access Control 20% Structure / Vertical Envelope 3.5% Electrical 3% Fire 2% Site 3% Interiors 1.5% Contingency / Other 12% *More details provided in Attachment A.
Placeholder - $75M next priorities for FY2022-23 Project Type Projected Expenditure (% of Budget) HVAC 30% Roofing 15% Structure / Vertical Envelope 14% Site 6% Access Control 5% Electrical 5% Fire 5% Interiors 5% Plumbing 2% Equipment 2% Elevators 1% Contingency / Other 10%
We will need to work with the County to take advantage of the current rate environment to fund MM Estimate Debt Servicing Costs Offering Size $40M $50M $60M $75M FY21 (interest only) $536,000 $670,000 $804,000 $1,005,000 FY22 $2,800,000 $3,500,000 $4,200,000 $5,250,000 FY23 $2,760,000 $3,450,000 $4,140,000 $5,175,000 * Assumes issued at 2% * Assumes Principal payments Commence FY22
Maintenance Opportunity We have an opportunity to work with the County to address Major and Preventative Maintenance needs ● Ability to secure cheaper funding due to low interest rates ● We have a robust backlog of Major Maintenance projects that additional funding can begin to address ● Reinvesting existing debt service savings can better support Preventive and Recurring Maintenance needs ● This is a great first step toward achieving long-term sustainability of our Maintenance programs
Major Maintenance Bond update Robert Meister, Chief Finance Officer Josh Davis, Chief Operations Officer Presented to the School Board * August 11, 2020
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