Proposed University Building Fund (UBF)

These are possible purposes: Preserve investment in facility and infrastructure assets Establish a mechanism for receiving M&O funds for new construction projects Have reliable funding sources for capital reinvestment Have reliable funding sources for annual maintenance and operations for buildings and infrastructure Incentivize improved space management practices. Why does UA want to create a UBF?

Discuss and Decide upon parameters for fund creation and operation (more on this) What will it manage: capital investment, annual maintenance investment, operations costs? Seek introduction of legislation to statutorily create the fund. Request capital funds and new construction operating funds for initial deposit. How will UA create the UBF?

(these are listed for discussion, not already decided upon) Legislative Appropriations Deposits made by an MAU on behalf of its facilities Rents or ICR collected on space (there will be some limitations on when this can apply) A portion of capital project balances available once project is complete Fund 7 accounts Other? What are the potential sources of revenue?

What expenses can the UBF cover? Recapitalization funding needed to extend building life Annual maintenance for those buildings placed in the fund Operations services (snow removal, custodial, etc.) for those buildings placed in the fund

How will the UBF be implemented? Phased coverage of facilities; begin with coverage of buildings 15 years old and newer, including facilities re-aged by completion of deferred maintenance (DM). More buildings will be added as new construction is authorized and DM backlog is caught up. Seek phased annual operations and maintenance funding for new construction beginning with the construction appropriation. This becomes base funding by time of building completion. Other parameters…..

When will UA move forward with this concept? Internal discussions and decisions completed during fall Legislation introduced for session beginning January 2013.

Other Questions How will the UBF deal with Deferred Maintenance backlog? By using the DM funds to address any backlog, and re-aging the buildings. How is the UBF managed? By UA

What legislation is proposed? University Building Fund Statute (this DRAFT is a mark-up of AS Alaska public building fund) Sec. _______. University Building Fund. (a) There is created as a special account in the general fund the University Building Fund into which shall be deposited (1) payments made to the University of Alaska by a public or private occupant of a covered building under an agreement with University of Alaska for costs of the occupant's use and occupancy of building space,; and (2) appropriations to the University Building Fund,. (3) deposits made by the Board of Regents from fund sources such as federal grants, and (4) earnings from the fund reinvested for inflation-proofing. (b) Beginning with the appropriations for the fiscal year beginning July 1, 2013, on an annual basis and under AS (Executive Budget Act), the legislature may appropriate amounts from the University building fund to the University of Alaska to pay use, management, operation, maintenance, and depreciation costs related to space withinof covered buildings managed by the University of Alaska. (c) Appropriations to the University Building Fund are not one-year appropriations and do not lapse under AS (d) The unexpended and unobligated balance of an appropriation from the University Building Fund lapses into the University Building Fund at the end of the fiscal year for which it was appropriated. (e) Nothing in this section exempts money deposited into the University Building Fund from the requirements of AS (Executive Budget Act) or dedicates that money for a specific purpose. (f) Except for buildings or other structures located on land granted to the University in the Act of Congress approved January 21, 1929, "covered building" means thoseany buildings owned by the University of Alaska and transferred to the fund by the specially identified as “covered buildings” by the University’s Board of Regents.

What is needed for success? System-wide support for the final concept chosen to support achieving sustainment funding. Courage of our conviction that well-maintained assets are critical to our mission and to help support Strategic Direction Initiatives. Thorough, clear, data-backed materials for use with Governor’s Office and Legislature.