Debt Capacity and Facilities Master Plan Priorities for Next Capital Improvement Program (CIP) Strategic Planning Retreat November 14, 2015 Diane E. Snyder, CPA, M.S. Vice Chancellor for Finance and Administration
Why is CIP investment needed? 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 Alamo Colleges must continue to be a catalyst in providing a skilled workforce for the economic benefit of our region. 2
CIP includes Citizen Involvement (Taxpayers, Business, Industry, Students, Senior Citizens' Organizations) 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
2005 versus 2016 1. Student Growth 1. Student Growth (+ 30K in 15 years) 2. Aging Facilities 2. Aging Facilities 3. Community and Workforce Needs 3. Community and Workforce Needs 4. Student Support for Completion 2016 Proposed CIP 2005 CIP 4
Skilled Technical Workforce in Key Industries Hospitality : Hospitality : Employs 122,500 people with annual payroll of $2.5 billion. Economic impact to Information Technology and Information Technology and San Antonio region is $13.4 billion…. Travel and Cybersecurity : For every 10 jobs posted Cybersecurity Tourism Impact Study Oct 2014. in the broad IT field, just 1 person had the appropriate training…SA2020 1 st st Responders 1 Responders : : Must have realistic training facilities to be prepared in the critical early stages of an emergency. San Antonio expected to add 1 : 1 in every 6 jobs in Health : Health million people by 2030. San Antonio is in healthcare – STEM $25 billion economic impact… COSA 2016 Budget : Second largest industry in Texas. Agriculture : Agriculture 220,000 farms in Texas. Provides most affordable and healthy food supply in the world …Economy Watch Advanced Manufacturing in Advanced Manufacturing in Transportation – Aerospace and Transportation – Aerospace and Automotive : : Needs ongoing Automotive specialized training for success of Alamo Colleges must maintain its industries…. SA2020 competitive edge to prepare workforce in rapidly changing industries. 5
Centers of Excellence Critical Regional Workforce Needs: ◦ Information Technology/Cybersecurity ◦ Medical and Allied Health ◦ Advanced Manufacturing, Transportation & Logistics ◦ Hospitality ◦ Agriculture ◦ 1 st Responders 2005 CIP: Built two state-of-the-art Allied Health Buildings (SAC and SPC) 6
Centers of Excellence 7
Old Buildings: Under-utilized 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
DEFERRED MAINTENANCE: Requirements Breakdown Top 36 Buildings 29% $98.8 MM 170 Buildings FCI 170 Buildings 71% 60% 84% of Inventory $117.6 MM $241.2 MM Identified Project Buildings 40% $77.9 MM Top 36 Buildings 206 Buildings $196 MM FCI $340 MM Recommendations+FCI 5/12/2015 DEFERRED MAINTENANCE 9 UPDATE
Student Support Services ⋅ Increased $13m in Student Services since 2010 – Advisors – Tutoring – Welcome centers (admissions, testing, bursar, SFA, …) ⋅ Facilities need expansion and renovation 10
Priority Facility Needs: $722M Now is the time to address $400M, the most critical needs 11
NVC Exceeds Capacity –FTSE 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 FTSE = Full time equivalent student (12 CH) 12
Need $400M CIP or may limit future enrollment 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 Ø 2017: $135 Million $400 Million CIP with Ø 2019: $135 Million no tax increase Ø 2021: $130 Million 13
Debt Capacity Analysis: GO Bonds Voter Auth. Nov. 2016, Bonds issued Spring 2017 30 Year structure, issued in three series Assumes 2-5% valuation growth first 5 yrs.; collections rate 98.5% Source: First Southwest Issue $400M with NO tax increase 14
Options on allocation of $400M 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 – allocation a. 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
Northeast Lakeview College Priorities: $ 79M 16
Northwest Vista College Priorities: $110M 17
Palo Alto College Priorities: $106M 18
San Antonio College Priorities: $156.2M 19
St. Philip’s College Priorities: $151.5M 20
Options for North Central Land: a)“online” Regional Center used by all b) secondary campus to NVC Ø Develop a new campus focused Ø Construct testing and open computer around the quickly developing "on- laboratory space where students come line" students to the campus and take tests in person; lectures primarily take place "on-line” Ø Build a traditional campus just with less bricks and mortar Ø The library should be planned to be as "virtual" as possible with the Ø Focus construction on facilities for constructed facility housing a minimum which student have to come to of stacks and several group learning campus; spaces that host courses or spaces for students that want to gather elements of courses that require as a group to discuss the courses or "hands-on" learning (i.e. Chemistry, work together in person on projects Biology, Geology, Physics, and Kinesiology lab spaces) Ø Build less traditional classroom spaces 21
Potential IT Investment Areas 22
Next Steps ● Form Citizen's CIP Bond Committee Ø 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
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 6-9 months in advance of Board plan which may include: Town hall meetings, presentation TV/radio/newspaper releases, select PR firm 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/published Hold 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 24
Appendix: Debt Supporting Data
Facilities Improvements to Date IT Support funds used for secure wireless on all campuses, fiber linkage, E-learning management, data storage, VOIP, data security, district-wide infrastructure 26
Historical Debt Activity FY 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 issue Revenue 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
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