1. Report to the State Board of Higher Education Prepared by Office of the Chancellor Finance and Administration December 21, 2001 Part II: Capital Renewal / Deferred Maintenance Funding Strategies to Reduce the Backlog

2. OUS Total GSF in 2000 (18.2M GSF) Grouped By Construction Date into 5 Year Cohorts 0 500000 1000000 1500000 2000000 2500000 3000000 18801885189018951900190519101915192019251930193519401945 1950 195519601965197019751980198519901995200020052010 YEAR GSF

3. 3 Summary of Findings E & GAuxiliariesTOTAL $40M $6M $46M $488M$67M$555M Backlog of DM Avg. Annual CR * *average over next 50 years, varies by year Current Needs:

4. E&G Only Deferred Maintenance by Subsystem Total DM = $488M

5. Oregon University System- E&G Deferred Maintenance by Campus

6. 6 Funding Strategies for DM All approaches have 4 common steps 1. Assess the CR/DM needs 2. Build support 3. Identify Funding Strategies 4. Present Strategy to Legislators

7. 7 Actions Taken to Date 2001-2007 OUS Capital Program detail Updated Campus Master Plans Updated Facilities Renewal Baseline Study Presented to State Debt Advisory Commission

8. 8 Actions Taken to Date 2001 Legislative Session OUS Goal: Sustained Funding for Annual Capital Renewal OUS Action: Requested full annual CR funding portion of DM Backlog Legislative Outcome: Approved $12 Million/year (4 th biennium in a row)

9. 9 Actions Taken to Date 2001 Legislative Session OUS Goal: Reduce DM Backlog OUS Action: Sought Legislative support for G.O. Bond program for K-12, CCs, OUS, and OHSU Legislative Outcome: Support for major new ballot measures for issuance of G.O. Bonds - Seismic Rehab of Public Education- $500 Million - OHSU Opportunity Program- $200 Million

10. 10 Common Funding Strategies Direct state appropriations Bonds or debt financing Student fees Maintenance Reserve Reallocation through cost reductions Dedicated Tax Business Tax Credits (BTC) – State program through Office of Energy

11. 11 Proposed Funding Strategy - 2003 Legislative Action Referral of general ballot measure to voters for approval of General Obligation (GO) Bond issuance.  Purpose: Substantially reduce OUS DM Backlog over 10-year period.  Bond amount:$500 Million  Term of bonds:15-30 years  Limited term of bonding authority (sunset): 10 yrs.

12. 12 Recommendation Board approves the strategy and authorizes Chancellor and staff to test feasibility with prospective partners : - Governor candidates- Legislative candidates - Legislative leaders- Labor organizations - Business associations - Other stakeholders - Campus Alumni Desired Outcome: Gain support of Governor and Legislature for OUS Legislative Concept.

13. 13 Timeline: 12/01Board approval of strategy & process; discuss Legislative Concept 2/02Chancellor’s status report to Board; Board reviews/approves Legislative Concept 4/02Chancellor submits Legislative Concept on behalf of Board 6 & 10/02Status reports to Board 2003 Legislative Session: Legislature approves bill referring ballot measure to voters 11/03General Election