Debt Capacity and Facilities Master Plan Priorities for Next Capital

Improvement Program (CIP)

Strategic Planning RetreatNovember 14, 2015

Diane E. Snyder, CPA, M.S. Vice Chancellor for Finance and Administration

1. Provide skilled technical workforce to meet present and future employer needs in critical high demand, high growth industries in our region.

2. Create capacity for a growing number of students to successfully complete training and get a job or transfer to a university.

Alamo Colleges - Grew 24% since 2005, adding 12,700 students since last bond election(15 year Demographic growth + 46%, +30,000 students by 2030) 

San Antonio – Expected to grow 1,000,000 people by 2030

2

Why is CIP investment needed?

Alamo Colleges must continue to be a catalyst in providing a skilled workforce for the economic benefit of our region.

Best practice followed in 2005 CIP:● Citizen's CIP Bond Committee (Plan Development prior to

November 2005 Ballot)

● Citizen's CIP Oversight Committee (Through 2010)

● Ensure expenditures in accordance with Bond Projects approved by Voters

● Review of funds proposed to be moved between projects

● Periodic reports to the Public and Alamo Colleges Board of Trustees

CIP includes Citizen Involvement(Taxpayers, Business, Industry, Students, Senior Citizens'

Organizations)

2005 versus 2016

2005 CIP 2016 Proposed CIP

1. Student Growth2. Aging Facilities3. Community and Workforce Needs

1. Student Growth (+ 30K in 15 years)2. Aging Facilities3. Community and Workforce Needs4. Student Support for Completion

4

5

Skilled Technical Workforce in Key Industries

11stst Responders Responders:  :  Must have realistic training facilities to be prepared in the critical early stages of an emergency.  San Antonio expected to add 1 million people by 2030. 

Advanced Manufacturing in Advanced Manufacturing in Transportation – Aerospace and Transportation – Aerospace and AutomotiveAutomotive:  :  Needs ongoing specialized training for success of industries….SA2020

HospitalityHospitality::  Employs 122,500 people with annual payroll of $2.5 billion.  Economic impact to San Antonio region is $13.4 billion….Travel and Tourism Impact Study Oct 2014.

Information Technology and Information Technology and CybersecurityCybersecurity:  For every 10 jobs posted in the broad IT field, just 1 person had the appropriate training…SA2020

HealthHealth:: 1 in every 6 jobs in San Antonio is in healthcare – $25 billion economic impact…COSA 2016 Budget

Alamo Colleges must maintain its competitive edge to prepare workforce in

rapidly changing industries.

STEM

AgricultureAgriculture:  :  Second largest industry in Texas.  220,000 farms in Texas.  Provides most affordable and healthy food supply in the world…Economy Watch

Critical Regional Workforce Needs:◦ Information Technology/Cybersecurity◦ Medical and Allied Health◦ Advanced Manufacturing, Transportation & Logistics◦ Hospitality◦ Agriculture◦ 1st Responders

2005 CIP: Built two state-of-the-art Allied Health Buildings (SAC and SPC)

6

Centers of Excellence

7

Centers of Excellence

Deferred maintenance, poor building conditions (water intrusion, roofs, HVAC)

Upgrade technology:◦ To meet program needs◦ Learning-centered instructional needs

Too many small classrooms; combine some rooms

Student Support facilities cramped, spread-out across campus

8

Old Buildings: Under-utilized

DEFERRED MAINTENANCE: Requirements Breakdown Top 36 Buildings

9DEFERRED MAINTENANCE UPDATE

206 Buildings

170 Buildings

84% of Inventory

Top 36 Buildings

60%$117.6 MM

40%$77.9 MM

$196 MM FCI $340 MMRecommendations+FCI

29%

$98.8 MM

170 Buildings FCI

71%

$241.2 MM

Identified Project Buildings

5/12/2015

⋅ Increased $13m in Student Services since 2010– Advisors– Tutoring– Welcome centers (admissions, testing, bursar, SFA, …)

⋅ Facilities need expansion and renovation

10

Student Support Services

Priority Facility Needs: $722M

11

Now is the time to address $400M, the most critical needs

Need to start planning on next CIP to provide capacity at NVC and NLC by Year 6 (2021) – support 20% growth in on-campus FTSE

Address older building deferred maintenance to increase utilization Add buildings to support critical workforce programs Add/Adapt student support buildings

12

NVC Exceeds Capacity –FTSE

FTSE = Full time equivalent student (12 CH)

Grow/Adapt Facilities: add capacity via voter authorized debt◦ November Board Retreat – authorize est. Citizen’s

Committee◦ Preparation for bond election – 12 months◦ Election for bonds –November 2016◦ Initial Sale of Bonds –Spring 2017◦ Build capacity for growth

Ø2017: $135 MillionØ2019: $135 MillionØ2021: $130 Million

13

Need $400M CIP or may limit future enrollment

$400 Million CIP with no tax increase

Source: First Southwest

14

Debt Capacity Analysis: GO Bonds

Voter Auth. Nov. 2016, Bonds issued Spring 201730 Year structure, issued in three seriesAssumes 2-5% valuation growth first 5 yrs.; collections rate 98.5%

Issue $400M with NO tax increase

Prior CIP was approx. equal $ alloc. to each college◦ Did not consider College # Students variances◦ Did not consider older renovation needs◦ Did allocate $ off the top for Technology

$400M New CIP – allocationa. Determine % to fund areas at all 5 colleges:

(IT, Security, Sustainability/ Energy, new regional center (NCC), Signage/Physical Plant),

b. Consider full-time student equivalent (FTSE) “on-campus” forecasted at 2025 to allocate $ per college

c. Consider higher $ on older colleges/renov. (SAC/SPC)

15

Options on allocation of $400M

16

Northeast Lakeview College

Priorities: $ 79M

17

Northwest Vista College

Priorities: $110M

18

Palo Alto College

Priorities: $106M

19

San Antonio College

Priorities: $156.2M

20

St. Philip’s College

Priorities: $151.5M

Options for North Central Land: a)“online” Regional Center used by allb) secondary campus to NVC

Ø Develop a new campus focused around the quickly developing "on-line" students

Ø Build a traditional campus just with less bricks and mortar

Ø Focus construction on facilities for which student have to come to campus; spaces that host courses or elements of courses that require "hands-on" learning (i.e. Chemistry, Biology, Geology, Physics, and Kinesiology lab spaces)

21

Ø Construct testing and open computer laboratory space where students come to the campus and take tests in person; lectures primarily take place "on-line”

Ø The library should be planned to be as "virtual" as possible with the constructed facility housing a minimum of stacks and several group learning spaces for students that want to gather as a group to discuss the courses or work together in person on projects

Ø Build less traditional classroom spaces

22

Potential IT Investment Areas

● Form Citizen's CIP Bond CommitteeØ Taxpayers, Business, Industry, Students, Senior Citizens' Organizations

Ø Plan Development prior to November 2016 Ballot

Ø Helps develop preliminary marketing plan which may include: Town hall meetings, TV/radio/newspaper releases, select PR firm

● Facilities Plan – to Board by May or June 2016

● Target Election: November 2016

Next Steps

24

Voted Limited Tax Bonds:   Typical Project Plan Steps Event Timing

Facilities Study is commissioned- Board appoints Citizen’s Facilities Committee to work with Staff and Consultant(s)

Citizen’s Committee also determines preliminary marketing plan which may include:  Town hall meetings, TV/radio/newspaper releases, select PR firm

6-9 months in advance of Board presentation

Results of Facilities Study is presented to Board

Board approves Order calling for election

Bond Steering Committee appointed- marketing period begins 2-4 months prior to Election

Notices posted/publishedHold PTA/Civic Organization/Town hall meetings

Conduct Election Uniform Election Days November/May

Canvass election returns 8-11 days post Election

End of Election contest period- Bonds may be issued Earliest is 30 days after Canvassing

Source: Fulbright & Jaworski, LLP, First Southwest

Appendix:Debt Supporting Data

Facilities Improvements to Date

26

IT Support funds used for secure wireless on all campuses, fiber linkage, E-learning management, data storage, VOIP, data security, district-wide infrastructure

Historical Debt ActivityFY Action Taken

2006 Issued $110.3 million in Ltd Tax Bonds and $30.4 million in MTN

2007 Issued $334.6 million Ltd Tax Bonds, $81.1 million MTN, $32.3 million Revenue Bonds

2009 Called existing debt of $5.5 million; Issued $11.9 million in MTN

2011 Cash defeased $525K Series 2007 MTN; $55 million new issue MTN, Series 2011

2012 Refunded all outstanding Revenue Bonds with $78.1 million issueRevenue Financing System Series 2012 A&B  ($15 million new money)

 Refunded $77.9 portion Ltd Tax 2007 /2007A with $74.1 Ltd Tax

2013 Cash defeased $1.6 million Series 2007 MTN

2014 Cash defeased $2.3 million Series 2007 MTN

2014 Refunded $48.5 million 2007 MTN with $40.7 million Refunding issue

2015 Cash defeased $4.9 million Series 2007 MTN

27

Estimated Outstanding Debt @ 8/31/16  (in millions)

Limited Tax

MTN Revenue Total

Outstanding  @ 8/31/15 $364.9 $99.4 $64.0 $528.3

Total Debt Service FY 16  ($10.0) ($9.8) ($4.7) ($24.5)

Debt Management Strategies FY 16 (1) (2)

($9.1) ($12.8) $55.0 $33.1

Outstanding @ 8/31/16 $345.8 $76.8 $114.3 $536.9

Average Life is the weighted average maturity in years of the debt- indicates how rapidly principal is expected to be paid off

Ltd Tax Debt = 13.043 years (11-1-15)MTN Debt = 6.001 years (11-1-15)

28

(1) Includes defeasance of the Series 2006/2007 MTN and refunding of Ltd Tax 2006/2006A(2) Issuance of Revenue Bonds for DSO Building FY2016/2017

Total Outstanding DebtTotal Principal Outstanding

As of Limited Tax Bonds 11-1-15

Limited Tax Bonds, Series 2012 $ 74,110,000Limited Tax Bonds, Series 2007A 34,140,000Limited Tax Bonds, Series 2007 173,420,000Limited Tax Refunding Bonds, Series 2006A 45,020,000 Limited Tax Refunding Bonds, Series 2006 38,180,000

$ 364,870,000

Maintenance Tax NotesMaintenance Tax Notes, Series 2011 $ 39,325,000Maintenance Tax Notes, Series 2007 64,905,000Maintenance Tax Notes, Series 2006 20,480,000

$ 99,360,000

Revenue BondsRevenue Financing System, Series 2012A $ 54,575,000Revenue Financing System, Series 2012B 4,680,000

$ 59,255,000

Total Principal Outstanding $ 523,485,000

29

30

Comparative Debt StatisticsPeer

Community College

Tax Supported

Revenue Supported

Unrestricted Net Assets

Alamo Colleges $472.7 million $64.0 million $86.2 million

Austin $82.7 million $169.6 million $22.0 million

Collin County $34.6 million $3.2 million $235.7 million

Dallas County $321.5 million $15.2 million $237.8 million

El Paso none $47.1 million $34.7 million

Houston $645.9 million $194.1 million $118.2 million

Lone Star $458.8 million $114.4 million $52.5 million

San Jacinto $279.0 million None $77.9 million

South Texas College $88.8 million None $146.2 million

Tarrant County None None $206.3 million

As of April 1, 2015Source FirstSouthwest:, MAC website, CAFRs

Peer Community

College

Per Capita Per FTSE As % of Taxable Assessed Value

San Jacinto $558 14,285 .71%

Houston $319 13,733 .50%

Alamo Colleges $277 13,991 .47%

Lone Star $205 11,838 .36%

Dallas County $136 6,799 .20%

South Texas College $89 3,093 .26%

Austin $50 4,523 .07%

Collin County $38 1,806 .04%

Tarrant County $3 218 .01%

El Paso None None n/a

31

Comparative Debt StatisticsTax Supported Debt- 2014

As of April 1, 2015Source FirstSouthwest:, MAC website, CAFRs

Available Debt Instruments

  Purpose Auth RepaymentDebt  New Building   Furnishing

Instrument Construction Acquisition Renovate & Equipping Land         

Voted Limited  Yes No Yes Yes Yes Voter LevyTax Bonds

         Maintenance No No Yes Yes* No Statute Levy or 

OperatingTax Notes         

Combined Fee Yes Yes Yes Yes Yes Board OperatingRevenue Bonds

* Equipping of existing facilities more flexible than the equipping of new facilities.

Source: First Southwest

32