1. Florida’s Economy: University Construction, Capital Markets and PECO
Joe Shepard, Vice-President for Administration, FGCU
Chris Kinsley, Director, Finance & Facilities, BOG
August 7, 2008

2. While other state are now strongly competing with Florida for retirees, boomer demographics are even more powerful. So, while Florida’s share may decline, overall population growth will remain strong.

5. The SUS is well placed to serve this geographic pattern.

6. Over the past few year, Florida’s university have experienced a building boom, thanks to unprecedented levels of PECO funding, as well as capital from other funding sources, including local debt funding for facilities such parking and housing.
($2.6 billion dollars for 7 year period) It’s like they say, a billion here, and billion there, and soon your talking real money
The State University System has also experience the same cost escalation for materials and labor that the rest of the State and Nation did
PECO is returning to historic levels. However, this is a great opportunity to build, for three reasons:Project costs are lower, due to decreasing construction
Would provide an economic stimulus to the state economy

7. Bond Capacity 06-07 10 Deals approved by BOG
Total value of approx. $275 million
Majority were housing/ parking
1 medical (Lake Nona)
1 stadium project (FIU)

8. Bond Capacity 07-08 6 Deals approved by BOG
Total value of approx. $136 million
Half were housing/ parking
Half were special projects
1 stadium project (UF renovation/ addition)
(Medical Office Bldg/USF, East Campus Office/UF)
Variable is highly competitive compared to fixed. Caution – This will change one day. Must have a realistic variable rate debt plan, must good liquidity match.

9. PECO Priority Guidelines
a. Continuation of funded projects.
b. Utilities Infrastructure/Capital Renewal/Roofs needs.
c. Renovation and remodeling projects
d. Instructional, then research, followed by support space needs to include projects that will bring each university to the system average percentage of formula need.
e. Projects to provide specialized space for a newly approved academic program.
f. Land acquisition in accordance with University Board of Trustees adopted master plans.
g. Matching external funds from non-private sources.
Improve alignment of BOG and BOT priorities
Factors to consider:
Only those in RED generate questions
Need to balance needs of small and large institutions – not just a dollar allocation process.
Small usually request more general purpose space
Large generally request both general and program specific or specialized space
BOG does not create projects – Only the BOT creates projects.

10. Check List for CIP Approval
Buckle up.
Look both ways .
Pull out with caution.
Where are you going?
Can a school start 10 projects?
Review spending history.
Match request to schedule.
Maximize space, not $.
Look both ways – previous appropriations, and expenditure history should guide future requests
Is everyone ready? Generally speaking, most schools can only manage initiation of 3-4 projects in a given year, yet we see requests to start over 10 projects. Perhaps ask how many new PECO projects did we receive in our best year ever in the last 10 years, and use that as a guide
We see BOT asking for 100% of funding in Year 1. Our general rule It is very rare to have all funds under contract, much less spent in Year 1.
Maximize projects/space, not dollars
Where are you going? You detrmine what gets built. BOG doesn’t initiate any projects. We don’t know specific needs. We review everything within the general parameters. Not like DOE, K-12
UF is a good example of what a CIP-2 should look like (There are others)

11. Utilization is Increasing