capital budget hearing state university of new york dr. nancy l. zimpher, chancellor october 22,...
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Capital Budget Capital Budget HearingHearing
State University of State University of New YorkNew York
Dr. Nancy L. Zimpher, Dr. Nancy L. Zimpher, ChancellorChancellor
October 22, 2009October 22, 2009
2
State UniversityConstruction Fund
State Universityof New York
SUNY Capital Program SUNY Capital Program SummarySummary
# of# ofBldgsBldgs
Sq. Sq. FootFoot(1)(1)
AvgAvgAgeAge(2)(2)
2008-132008-13FundingFunding(1)(1) Funded ByFunded By Projects Projects
Managed ByManaged By
EducationalEducationalFacilitiesFacilities 1,8281,828 57.657.6 44.544.5 $4,426$4,426(3)(3) StateState Fund/CampusFund/Campus
HospitalsHospitals 1313 2.52.5 24.324.3 $450$450 Hospital Hospital RevenuesRevenues Fund/CampusFund/Campus
ResidenceResidenceHallsHalls 467467 19.319.3 34.034.0 $573$573 Room RentsRoom Rents
DASNY/DASNY/
CampusCampus
CommunityCommunityCollegesColleges 490490 17.917.9 41.641.6 $436$436
50% State50% State
50% Local50% LocalLocalLocal
TotalsTotals 2,7982,798 97.397.3 42.142.1 $5,885$5,885
Notes: (1) Square footage and funding expressed in millions. (2) Average age (expressed in years) represents a straight average with no consideration given to the size of buildings or
subsequent renovations.(3) Includes $1.65B in future appropriations for critical maintenance projects for 2010/2011 through 2012/2013.
3
State UniversityConstruction Fund
State Universityof New York
Educational FacilitiesEducational Facilities
Critical MaintenanceCritical Maintenance
Strategic Strategic InitiativesInitiatives
Construct New Business School - AlbanyNew School of Education/Child Care - Cortland
Electrical Distribution Upgrade - FredoniaSite Utility Lines - Alfred
4
State UniversityConstruction Fund
State Universityof New York
SUNY – Educational SUNY – Educational FacilitiesFacilities
0
2
4
6
8
10
12
14
Millions
Pre-1900
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Millions GSF
■ 73% of SUNY Educational Facilities are more than 30 years old
5
State UniversityConstruction Fund
State Universityof New YorkCapital Investment – Critical Capital Investment – Critical
MaintenanceMaintenanceAddressing Backlog and Facility Renewal Addressing Backlog and Facility Renewal
NeedsNeeds In 2007, SUNY and the In 2007, SUNY and the
Construction Fund undertook Construction Fund undertook a comprehensive Condition a comprehensive Condition Assessment Survey and Assessment Survey and Capital Reinvestment Study.Capital Reinvestment Study.
The initiative identified a The initiative identified a $3.2 billion deferred $3.2 billion deferred maintenance backlog and a maintenance backlog and a need for approximately $400 need for approximately $400 million per year for on-going million per year for on-going facility renewal.facility renewal.
Campus-wide Satellite Boilers – Alfred Ceramics
6
State UniversityConstruction Fund
State Universityof New York
GSF Rated Poor20%
GSF Rated Fair28%
GSF Rated Good42%
GSF Rated Excellent10%
2007 Building Condition Assessment Survey (BCAS) 2007 Building Condition Assessment Survey (BCAS) Profile of Overall Ratings Statewide Profile of Overall Ratings Statewide
Approx. 55 Million Gross Square Feet (GSF)Approx. 55 Million Gross Square Feet (GSF)
Capital Investment – Critical Capital Investment – Critical MaintenanceMaintenance
Addressing Backlog and FacilityAddressing Backlog and Facility Renewal Renewal NeedsNeeds
7
State UniversityConstruction Fund
State Universityof New York
A long term investment is necessary to A long term investment is necessary to reduce the current backlog to an industry reduce the current backlog to an industry standard of 5 percent of current standard of 5 percent of current replacement valuereplacement value
The 2008-09 Enacted Budget included an The 2008-09 Enacted Budget included an initial commitment of $550 million initial commitment of $550 million annually over a 5-year periodannually over a 5-year period
The follow chart illustrates a 15-year-plan The follow chart illustrates a 15-year-plan to reach the desired outcometo reach the desired outcome
Capital Investment – Critical Capital Investment – Critical MaintenanceMaintenance
Addressing Backlog and FacilityAddressing Backlog and Facility Renewal Renewal NeedsNeeds
8
State UniversityConstruction Fund
State Universityof New York
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Sta
rt 2
00
7
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
Year
Do
lla
rs (
Mil
lio
ns
)
Investment
Backlog
Capital Investment – Critical Capital Investment – Critical MaintenanceMaintenance
Addressing Backlog and FacilityAddressing Backlog and Facility Renewal Renewal NeedsNeeds $550M/$777M/$945M$550M/$777M/$945M
Will Reduce Backlog to 5% of Current Replacement Value in Fifteen YearsWill Reduce Backlog to 5% of Current Replacement Value in Fifteen Years
9
State UniversityConstruction Fund
State Universityof New York
Strategic InitiativesStrategic Initiatives
High Tech Incubator - Fredonia
Science Engineering Technologies - Oswego
New Technology Building – Buffalo College
New Engineering Building – Buffalo University
10
State UniversityConstruction Fund
State Universityof New York
Strategic InitiativesStrategic Initiatives
Enacted Capital programs since 2008 Enacted Capital programs since 2008 contained over $1.7 billion in funding for contained over $1.7 billion in funding for Strategic Initiative projectsStrategic Initiative projects
Many of the initiatives provide vital support to Many of the initiatives provide vital support to science, technology and research activitiesscience, technology and research activities
These investments are necessary to:These investments are necessary to: Maintain and enhance SUNY’s ability to attract and Maintain and enhance SUNY’s ability to attract and
retain students and faculty retain students and faculty Be competitive in its academic offerings and Be competitive in its academic offerings and
research capacityresearch capacity
11
State UniversityConstruction Fund
State Universityof New York
SUNY’s Capital SUNY’s Capital InvestmentInvestment
Merits of Multi-year Capital Programs:Merits of Multi-year Capital Programs: Adds predictabilityAdds predictability Cost effectiveCost effective Leads to better planning allowing for the Leads to better planning allowing for the
identification and prioritization of projects to identification and prioritization of projects to address ongoing critical maintenance needsaddress ongoing critical maintenance needs
Provides for the efficient execution of necessary Provides for the efficient execution of necessary capital investments by allow appropriate capital investments by allow appropriate sequencing and phasing of projectssequencing and phasing of projects
Enables the University to maintain Enables the University to maintain constant levels of investment; avoids peaks constant levels of investment; avoids peaks and valleys and the long ramp-up period to and valleys and the long ramp-up period to reach sustainable investment levelsreach sustainable investment levels
12
State UniversityConstruction Fund
State Universityof New York
SUNY’s Capital SUNY’s Capital InvestmentInvestment
Educational & Hospital Facility Capital Programs Annual State Fiscal Plan Project Commitment & Disbursement Targets thru 2012/13
2008/09 Actuals showing B1184 delays; Estimated 2009/10-2012/13 as needed to Reduce CM Backlogs & support #1 SI's
$1,253
$1,038$953
$500
$492
$493
$710
$246$164$151$169
$220$360$280
$1,148
$496
$718
$199 $269
$377
$287$242 $225 $224
$297
$409$464
$984 $980$962
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
199
8-99
199
9-00
200
0-01
200
1-02
200
2-03
200
3-04
200
4-05
200
5-06
200
6-07
200
7-08
200
8-09
200
9-10
201
0-11
201
1-12
201
2-13
Do
llars
, in
mill
ion
s
New Contract Commitments Annual Disbursement Levels
13
State UniversityConstruction Fund
State Universityof New York
Capital Plan ProgressCapital Plan Progress
Replace HTHW Lines – New PaltzWaste Stream Mechanical Facility – Cornell University
Hudson Hall General Reconstruction – PlattsburghReplace Fuel Tanks – Downstate Medical Center
14
State UniversityConstruction Fund
State Universityof New York
4/05 4/06 4/07 4/08 4/09 9/09.0
.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Billions
Design Construction
SUNY Capital Program SUNY Capital Program (1)(1)
Projects in Design and Projects in Design and ConstructionConstruction
(1) Educational Facilities and Hospital Plans Only.
15
State UniversityConstruction Fund
State Universityof New York
SUNY Capital Program SUNY Capital Program (1)(1)
Projects Active or Completed Projects Active or Completed Since 2004Since 2004
(1) Educational Facilities and Hospital Plans Only.
Critical Maintenance Strategic Initiatives
1,862 Projects($4.3B)
200 Projects($2.6B)
16
State UniversityConstruction Fund
State Universityof New York
0
500
1,000
1,500
2,000
2,500
3,000
# Projects $ Value In Design 287 $ 2.8 B Under Construction 526 $ 2.2 B Completed Projects 1,249 $ 1.9 B Total 2,062 $ 6.9 B
SUNY Capital Program SUNY Capital Program (1)(1)
Projects Active or Completed Projects Active or Completed Since 2004Since 2004
(1) Educational Facilities and Hospital Plans Only.
17
State UniversityConstruction Fund
State Universityof New York
HospitalsHospitals Hospital Capital is distributed Hospital Capital is distributed
to each hospital based on its to each hospital based on its approved multi-year strategic approved multi-year strategic business planbusiness plan
Projects include both critical Projects include both critical maintenance and revenue-maintenance and revenue-enhancing initiativesenhancing initiatives
Each SUNY Hospital pays for Each SUNY Hospital pays for the principal and interest the principal and interest associated with the debt for its associated with the debt for its capital projectscapital projects
Appropriations are required to Appropriations are required to submit for Certificate of Need submit for Certificate of Need approvalapproval
Vertical Expansion – Upstate Medical Center
Major Modernization - PHII – Stony Brook University Hospital
18
State UniversityConstruction Fund
State Universityof New York
HospitalsHospitals
0
100
200
300
400
500
03/04 04/05 05/06 06/07 07/08 08/09 09/10
Fiscal Year
Dol
lars
in M
illion
s
Funding Amount
Hospital Funding – Capital FundingHospital Funding – Capital Funding
19
State UniversityConstruction Fund
State Universityof New York
Residence HallsResidence Halls
The Residence Hall The Residence Hall Capital program is self Capital program is self sustaining with revenues sustaining with revenues from room rents and other from room rents and other associated revenues associated revenues paying the cost of debt paying the cost of debt serviceservice
Switched to disbursement-Switched to disbursement-based bonding in 2008 to based bonding in 2008 to utilize capital in a more utilize capital in a more efficient mannerefficient manner
East Campus Housing Project – Binghamton University
20
State UniversityConstruction Fund
State Universityof New York
Residence HallsResidence Halls
0100
200300400500
600700
03/04 04/05 05/06 06/07 07/08 08/09 09/10
Fiscal Year
Dol
lars
in M
illion
s
Funding Amount
Residence Hall Funding – Capital FundingResidence Hall Funding – Capital Funding
21
State UniversityConstruction Fund
State Universityof New York
Community CollegesCommunity Colleges
All community college capital projects are All community college capital projects are planned, designed, bid and constructed under planned, designed, bid and constructed under local control and authority, either by the college local control and authority, either by the college or the local sponsoror the local sponsor
Local sponsors must provide at least 50% of the Local sponsors must provide at least 50% of the capital funding for a Community College projectcapital funding for a Community College project
Colleges must obtain a local sponsor resolution Colleges must obtain a local sponsor resolution committing the local sponsor’s funding share to committing the local sponsor’s funding share to be included in SUNY’s Capital Budget Requestbe included in SUNY’s Capital Budget Request
22
State UniversityConstruction Fund
State Universityof New York
Community CollegesCommunity Colleges
050
100150200250300350400450
03/04 04/05 05/06 06/07 07/08 08/09 09/10
Fiscal Year
Dol
lars
in M
illio
ns
Funding Amount
Community College Funding – Capital FundingCommunity College Funding – Capital Funding
23
State UniversityConstruction Fund
State Universityof New York
Community CollegesCommunity CollegesCapital ReinvestmentCapital Reinvestment
A study is currently underway similar to A study is currently underway similar to the one performed for the SUNY State-the one performed for the SUNY State-operated campuses and for the CUNY operated campuses and for the CUNY Senior and Community CollegesSenior and Community Colleges
A late fall completion is anticipatedA late fall completion is anticipated The study will provide information on the The study will provide information on the
level of capital investment needed to level of capital investment needed to address the backlog and facility renewal address the backlog and facility renewal needs for each Collegeneeds for each College
24
State UniversityConstruction Fund
State Universityof New York
Community Colleges Community Colleges Capital ReinvestmentCapital Reinvestment
25
State UniversityConstruction Fund
State Universityof New York
““Greening of SUNY”Greening of SUNY” The University is the leader in the The University is the leader in the
areaarea In 2007, the State University Board of In 2007, the State University Board of
Trustees adopted a resolution as part Trustees adopted a resolution as part of its overall plan of action for the of its overall plan of action for the “Greening of SUNY”“Greening of SUNY”
All new buildings and major All new buildings and major rehabilitations must achieve at least a rehabilitations must achieve at least a LEED Silver rating at State-operated LEED Silver rating at State-operated campuses and statutory collegescampuses and statutory colleges
Community Colleges are encouraged to also achieve at least a LEED Silver rating
These requirements are over and above the current State requirements
Bio Tech Building – Stony Brook University
26
State UniversityConstruction Fund
State Universityof New York
Economic ImpactEconomic Impact Extensive and geographically diverse network Extensive and geographically diverse network
of University facilities across the State of University facilities across the State provides a built-in framework for promoting provides a built-in framework for promoting economic development activities in nearly economic development activities in nearly every regionevery region
Last year, Education and Hospital investments Last year, Education and Hospital investments alone totaled over $530 millionalone totaled over $530 million
Approximately half, or $260 million, was for Approximately half, or $260 million, was for labor costs - not counting the ripple effectlabor costs - not counting the ripple effect
This year’s investment level is estimated to This year’s investment level is estimated to reach over $700 millionreach over $700 million
SUNY’s Capital Program is a significant SUNY’s Capital Program is a significant economic engine throughout the Stateeconomic engine throughout the State
27
State UniversityConstruction Fund
State Universityof New York
Current Economic Current Economic ClimateClimate
SUNY is experiencing:SUNY is experiencing: An increase in number of
bidders Bids that are considerably
under estimate Higher levels of
competition for projects from Architects and Engineers
Crumb Library Window Replacement - Potsdam
28
State UniversityConstruction Fund
State Universityof New York
0
1
2
3
4
5
6
7
8
9
10
11
12
Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 090
4
8
12
16
20
24
28
32
36
40
44
48
Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09
State University Construction FundState University Construction FundAverage Number of Average Number of BiddersBidders per per
OpportunityOpportunityApril 1, 2008 thru September 30, April 1, 2008 thru September 30,
20092009
State University Construction FundState University Construction FundAverage Number of Average Number of SOQsSOQs per per
OpportunityOpportunity (1) (1)
April 1, 2008 thru September 30, April 1, 2008 thru September 30, 20092009
(1) Includes all procurements for which Statements of Qualifications (SOQs) are received.
29
State UniversityConstruction Fund
State Universityof New York
$0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
$275
$300
$325
$350
$375
$400
$425
$450
$475
$500
$525
State University Construction State University Construction FundFund
Bid vs. EstimateBid vs. Estimate
September 1, 2008 – September 30, 2009
Millions
Estimate
Amount Bid
30
State UniversityConstruction Fund
State Universityof New York
63.7
70.6
83.7
0 25 50 75 100Percent
2007
2008
2009 (YTD)
Fis
ca
l Y
ea
r
State University Construction FundState University Construction FundPercent of Bids within EstimatePercent of Bids within Estimate
43 Projects
58 Projects
58 Projects
31
State UniversityConstruction Fund
State Universityof New York
Continue the ProgressContinue the Progress Continue multi-year capital Continue multi-year capital
investmentsinvestments Third installment of $550M Critical Third installment of $550M Critical
Maintenance for Educational FacilitiesMaintenance for Educational Facilities Funding for Community College projects Funding for Community College projects
that have local sponsor resolution supportthat have local sponsor resolution support Additional investments for Strategic Additional investments for Strategic
Initiatives and HospitalsInitiatives and Hospitals SUNY/SUCF Flexibility PackageSUNY/SUCF Flexibility Package
Project delivery mechanisms such as Project delivery mechanisms such as Design-Build and CM at RiskDesign-Build and CM at Risk
Post-audit capability as opposed to current Post-audit capability as opposed to current pre-audit requirementspre-audit requirements
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