Transcript Educational Facilities - State University Construction Fund

SUNY PPAA
Winter Conference
Presented by the
State University Construction Fund
January 28, 2014
Cooperstown, NY
2013/14 Response to Fiscal Challenges
•
Fiscal Plan Adjustments
•
Payment Predictability
• Coding Scrub z
• Project Evaluation/Prioritization
•
B-1184 reviews
•
Re-evaluation of Staff Charged to Capital
2
2013/14 Response to Fiscal Challenges
•
Maximizing 384 funds
•
Bid Postponements
•
Construction Manager Reductions
•
Program Management Campus Meetings
•
Program Finance Presentations
z
3
2014/15 Executive Budget Summary:
Capital Program
2014-15 Executive Budget vs. Capital Request (in millions)
2014/15
Request
Program
Educational Facilities:
• Critical Maintenance
• Binghamton School of Pharmacy
z
2014/15
Executive Budget
Variance
$750.0
0.0
$500.0
10.0
($250.0)
10.0
600.0
0.0
(600.0)
Residence Halls
50.0
50.0
0.0
Community Colleges
91.0
32.1
(58.9)
Transformational Information Technology Initiative
189.0
0.0
(189.0)
Research Initiative
200.0
0.0
(200.0)
Energy Initiative
100.0
0.0
(50.0)
$1,980.0
$592.1
($1,337.9)
Hospitals
SUNY-Wide Capital Initiatives:
Total
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Educational Facilities
New Funding:
•
•
•
•
$500M for critical maintenance
$10M for new School of Pharmacy at University at Binghamton
$55M for NYSUNY 2020 Round IV
z
$15M for a facility to house the College of Emergency Preparedness,
Homeland Security and Cyber Security
•
•
•
•
$50M for New York Genome Center at the University at Buffalo
$5M for Cornell College of Veterinary Medicine
$180M for Nano Utica (SUNYIT)
$150M to support campus-funded projects (384 appropriation)
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Educational Facilities
Other Items of Interest:
•
New critical maintenance funding restricted to existing facilities
•
Allocated to each State-operated campus based on current
methodology
z
•
All spending from new appropriations must be accommodated
under existing 2014/15 limit ($887M)
Prior Year Funding:
• All prior year appropriations are recommended for reauthorization
6
Community Colleges
• $32.1M (State share) was provided for 50 critical
maintenance projects which obtained local sponsor support
at 20 community colleges
• $57.3M (State share) for 13z strategic initiatives or related
critical maintenance projects at 9 colleges was not included
• Colleges have the opportunity to apply for funding through
the local Regional Economic Development Councils
($150M) and NY-SUNY 2020 ($55M)
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Disbursement Targets
1. Limits total spending in a fiscal year for each statesupported program.
2. Includes all spending within a program, including from
new and prior year appropriations, but DOB
z
disbursement target for Educational
Facilities bonded
program for 2014/15 was not adjusted upward.
Targets for 2015/16 and 2016/17 targets were reduced,
however, 2017/18 was increased and a 5th year was
added at $600M.
3. Spending from new and existing appropriations will
continue to be carefully monitored.
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Spending Targets Reflect Debt Limitations:
Total Debt Outstanding & Corresponding Available Bond Cap Room
SFY 2014/2015
$3,179
$39,521
SFY 2015/2016
$42,971
SFY 2016/2017
$1,866
$46,850
SFY 2017/2018
z
$157
$49,237
SFY 2018/2019
$106
$50,821
SFY 2019/2020
$1,025
$1,591
$52,912
$-
$10,000
$20,000
$30,000
Debt Outstanding Subject to the Bond Cap
$40,000
$50,000
$60,000
Available Bond Cap Room
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SUNY Educational Facilities & Hospital Capital Program Bonded Disbursements:
Annual Disbursements vs. Financial Plan Targets ($ in millions)
$1,000
$943
$912
$946
$968
$887
893
$800
776
$718
678
$600
$600
$606
656
619
600
$1,080
z
$905
$400
$729
$505
$968
$775
$887
393
$504
$200
$0
Annual Disbursements
2012-13 Fiscal Plan Target
2014-15 Fiscal Plan Target
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Plan Management
(in a Post-2014 Executive Budget World)
•
Factors & Issues
•
Approach
z
•
Actions
•
Requirements
•
Cautionary Notes
•
Important Updates
11
Plan Management
Factors & Issues
•
Fiscal Plan
•
Current Obligations
•
Appropriations
z
12
Plan Management
Approach
•
Determine System Spending Capacities
•
Identify Campus Priorities
z
•
Address Plans Disrupted by Last Year’s Fiscal Issues
•
Take Timely Actions to Support Campus Calendar
13
Plan Management
Actions (Next 60 Days)
•
Establish Campus Capital Priorities
•
Complete Status Review of All Active Projects
z
• Campus Lets – Unexpended
Coding
• Fund – In Design, In Construction
• Equipment
•
Verify / Update Associated Spending Projections
•
Calculate Capacity for New System-Wide Spending
•
Authorize Priority Projects within Fiscal Capacity
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Plan Management
Actions (Immediate)
•
Make 2014 MCM Funds Available
•
Issue New Coding forz Priority Summer Work
•
Process Eligible Year-End Transactions for FY 2014
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Plan Management
Requirements
• Existing Coding ‘Accounted for’ First (including MCM)
• Appropriate Project Scopes
z
• Realistic Project Values
• Reasonable Project Schedules
• Demonstrated Project Readiness
• Flexibility, Adaptability, and Predictability!
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Plan Management
Cautionary Notes
• “Maintenance of Existing Infrastructure”
• “Multiple,” “Various,” &z“Bank” Projects
• “Charging Staff to Capital Funds”
• “B-1184”
• Expect Data, Metrics, & Benchmarks!!
17
Plan Management
Important Updates
Fund Terminology in the New Paradigm
OUT:
Strategic Initiatives
Appropriations
Funding
PBE
Bob
z
IN:
SUNY 2020
Fiscal Plan
Disbursements
e-Builder
Tom
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Construction Cost
&z
Economics Update
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FY 2013 Bid Results
(January 2013 to January 2014)
• Total value of bids taken for this period is $497,735,000
• Bids are 6.5% below established budgets
9
z
8
• Bids are 0.6% above median budgets 7
6
• 33 bids have been taken
5
8.6
4
• Average number of bidders per
project statewide is 7.2,
below recent trends
3
8.9
8.6
5.6
8.2
7.2
2
1
0
2008 2009
2010 2011
2012
2013
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Regional Results Breakdown (1)
Projects by Region
(count)
$9,952
2%
4
14
11
4
z
Volume by Region
(budget x 1000)
$172,26
1 35%
South
South
Central
Central
West
West
East
East
$47,676
10%
$267,84
5 54%
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Regional Results Breakdown (2)
• South (Downstate) Region: $267.8 million bids
LvB -10.5%, MvB +0.8%, 9.5 bids each project
• Central Region: $47.7 million bids
LvB -6.0%, MvB -2.7%,z 7 bids each project
• West Region: $172.3 million bids
LvB +0.8%, MvB +4.1%, 6 bids each project
• East Region: $9.9 million bids
LvB -12.0%, MvB -1.1%, 6.3 bids each project
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Current Comparison to FY 2012
Comparison of Bid Ranges, all bids FY2012 to Current Point of FY 2013:
• 2012 Statewide: LvB -16.1%, MvB -8.4% = Range of 7.7%
• Current Statewide: LvB -6.5%, MvB +0.6% = Range of 7.1%
• 2012 Volume $312M vs. Current Volume $497M = Net Increase of 59%
z
Differences in Bid Range:
• Current bid range is superior compared with previous results in the 10-11% area.
• Halting of bids for 2012 created a data gap that was damaging to our internal
tracking.
• As always, there are specific projects that have results outside of these
averages.
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What Do the Bid Results tell us?
• The construction market in western NY has become very tight.
GC’s, certain specific trades and union labor availability are
driving prices up.
• Similarly, Downstate markets have
an increase in cost due to
z
permanent Sandy recovery work, although their increases are
smaller due to the depth of the market.
• Increases in labor costs, while small, are being passed on to
owners. Material costs appear to be stable, although long term
indicators suggest higher trends…. Someday.
• Beware the desperate shrewd bidder – don’t spend your savings.
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Where are we going?
• Global manufacturing
has spotty and limited
signs of growth
• There are no economic
z
paradigm-changers
available –
Live the New Normal
• USA wholesale
inventories have
increased by +/- 50% in
the last 4 months
Baltic Dry Index, 3 Year Chart
25
Where are we going?
• Harper-Petersen Index
(right) reflects container
shipments, i.e. finished
goods.
z
• North American railroad
car shipments have
declined about 3% from
2012-2013.
HARPEX, 5 Year Chart
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Where are we
going?
z
M2 – total supply of money,
USA, 30 years
M2V – velocity of total money,
USA, 50 years+
27
Where are we going?
Commodity prices have been surprisingly stable
over the last 12+ months.
z
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Where are we going?
• Energy pricing has assumed
“typical” seasonal and political
peaks and valleys without any
surprises.
Natural Gas
• Food pricing is mixed and “peaky.”
z
Crude Oil (WTI)
Ethanol
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So, all this means…
• Construction cost trends already established can be
expected to continue without any dramatic change.
• All construction work takes
z place in a local market;
budget issues must be anticipated, monitored,
adjusted and managed.
• “Eternal vigilance is the price of getting a good deal.”
(a misattribute of Thomas Jefferson, actually a misquote of John Philpot Curran)
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