1. MSUSA Capital Bonding Request Proposal 2008-2013

2. Bonding Proposal Overview – “the what and the why”  Maintaining Existing Facilities is a Key Focus of the MnSCU Bonding Request: As the steward of one-third of all state-owned buildings, MnSCU responsibly has made preservation of those buildings its top priority. MnSCU’s bonding proposals in Higher Education Asset Preservation and Repair (HEAPR) funds, which make the unglamorous, yet vital, repairs to leaky roofs, broken furnaces, outdated electrical wiring and other critical safety repairs that extend the life of existing facilities.  Moreover, every MnSCU campus generally receives HEAPR funds, meaning that HEAPR investment will benefit all MnSCU campuses, not just a select few.

3. Bonding Proposal Overview - Continued  HEAPR funding can drastically increase the energy efficiency the buildings on our campuses. Many of these buildings were built between 1950-1975, and were not built according to high efficiency standards. In addition, HVAC systems across the system are leaking, unable to adequately heat and cool classrooms, and waste enormous amounts of energy. New roofs and HVAC systems at many these facilities will be insulation against fluctuating energy costs.  HEAPR funds are also exempt from the traditional one-third debt service requirement, providing more direct value to students.  Since 2000, the HEAPR program has focused on reduction of the system-wide backlog of maintenance and repair, estimated in 1999 to be $500 million. A 2005 study now estimates the backlog at $635 million. Backlog is defined as work not accomplished due to lack of funding resources.

4. Bonding Proposal Overview - Continued  Bonding funding is sometimes the only way our campuses can renovate existing buildings, expand with new ones, and acquire new land: There are many projects proposed every year that benefit our campuses (look at the hand out for the 2008-2013 request)  A Bonding Investment Would Inject Cash into Local Communities: Passing bonding bills provide a fresh infusion of cash into urban, suburban and rural communities, generating a high demand for construction services and energizing secondary industries that serve the construction sector. Indeed, creating construction projects would spur job creation and help sustain the state’s economy.

5. What is Debt Service?  Both MnSCU and the U of M must contribute its own funds to help pay for a project.  The formula requires that a campus must pay 1/6 of the project out of its budget and the Office of the Chancellor must pay 1/6 of the cost.

6. MnSCU’s 2008-2013 Bonding Request  At the MnSCU’s Board of Trustee meeting on May 16, 2007 the preliminary bonding request was unveiled. The Proposed Capital Budget includes $110 million for major repair and replacement projects – HEAPR; and $237.3 million in line-item projects, property acquisition and demolition. The request to the Legislature and the Governor is for $271 million and $76.3 million in debt service directly financed by the System and each college and University gaining a capital project. The total plan calls for a total appropriation of $347.3 million.

7. MnSCU Bonding Appropriation History ($ in Millions)  2007 – Requested $33.8 and received no funding  2006 – Requested $280.4 and received $191.4  2005 – Requested $292.6 and received $213.6  2004 – Requested $274.9 and received no funding  2003 – Huge budget cuts, no request  2002 – Requested $251 and received $218.6  2001 – No Request  2000 – Requested $230 and received $131.1

8. Bonding site visits this year  Both the House and Senate Capital Investment committees will be conducting site visits to some of our Universities starting in September and ending in October. The locations and schedules have not been scheduled yet.  If your University is selected for a visit, the office would like to assist any students that might be going along on the tour. We can discuss talking points and details.

9. What Next?  MSUSA staff will be working with the Office of the Chancellor to discuss messaging and strategy in how to ‘sell’ the request at the legislature. Our first meeting is scheduled for Thursday July 26. If you are interested in finding out more, please contact MSUSA. Any Questions?