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Part II: Capital Renewal / Deferred Maintenance Funding Strategies to Reduce the Backlog

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

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Part II: Capital Renewal / Deferred Maintenance Funding Strategies to Reduce the Backlog

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

  2. OUS Total GSF in 2000 (18.2M GSF) Grouped By Construction Date into 5 Year Cohorts 3000000 2500000 2000000 GSF 1500000 1000000 500000 0 1880 1885 1890 1895 1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 YEAR

  3. Summary of Findings Current Needs: Avg. Annual CR * Backlog of DM *average over next 50 years, varies by year

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

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

  6. Funding Strategies for DM All approaches have 4 common steps1. Assess the CR/DM needs 2. Build support3. Identify Funding Strategies4. Present Strategy to Legislators

  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. Actions Taken to Date2001 Legislative Session OUS Goal: Sustained Funding for Annual Capital RenewalOUS Action: Requested full annual CR funding portion of DM Backlog Legislative Outcome: Approved $12 Million/year (4th biennium in a row)

  9. Actions Taken to Date2001 Legislative Session OUS Goal: Reduce DM BacklogOUS 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. 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. Proposed Funding Strategy - 2003 Legislative ActionReferral 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. 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 ofGovernor and Legislature for OUS Legislative Concept.

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

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