Revenue Fund
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Matt Rubel, MSCSA Treasurer and Sarah Clarke, MSCSA Director of Government Relations The Revenue Fund is a financing program for colleges and universities to build dormitories, parking facilities, wellness centers, and other revenue generating facilities on campus that do not serve an academic purpose. This session will discuss the history and details of the program, and what students should consider before using the Revenue Fund to build new facilities on campus.
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Revenue Fund
- 1. The Revenue Fund with Matt and Sarah
- 4. Types of Bonds History of Revenue Fund How it works Projects Student Involvement MSCSA position Overview
- 5. General Obligation (GO) Higher Education Asset Preservation and Replacement (HEAPR) Revenue Fund Three type of Bonds
- 6. General Obligation (GO) ◦ Most buildings on campus ◦ State pays for 2/3 of project costs ◦ MnSCU system and campus 1/3 Higher Education Asset Preservation and Restoration (HEAPR) ◦ Warm, Safe, Dry ◦ State pays 100% Revenue Fund ◦ Students (users) pay 100% The Differences in Bonds
- 8. Established in 1955 Includes: ◦ Residence halls ◦ Dining services ◦ Student Unions ◦ Some parking facilities ◦ Any other revenue generating facilities History of Revenue Fund
- 9. Since inception - only open to State Universities, until 2008 MSCSA initiated the legislative change to open the Fund to 2 year colleges History of Revenue Fund
- 10. The need for a new type of space User fees or student fees 20 year loans The fee covers: ◦ Debt on the bond ◦ Operating costs: utilities, labor, repairs, maintenance, and reserves How it works
- 11. Leading up to a bond sale ◦ Projects developed at campus level ◦ Administrators/students determine parameters ◦ Predesign developed – scope, cost, and schedule ◦ MnSCU System Office reviews predesign and works with campus to create Pro- forma How it works
- 12. Pro-forma: Potential debt and operations of the facility to be funded with bond proceeds Business Plan How it works
- 13. St. Paul College – Parking Ramp Normandale – Student Center & Parking Ramp Century – Parking Improvements Minneapolis Comm & Tech – Student Center Anoka-Ramsey Coon Rapids – Wellness Center MSCTC Moorhead – Wellness Center Alex Tech- Parking Improvements Recent Projects
- 14. St. Paul College – Parking Ramp
- 15. St. Paul College – Parking Ramp
- 16. Project Cost: $10,429,000 491 new parking stalls (1308 to 1799) $2.50 per day Average cost $260-275 Maximum $402.50 per student St. Paul College – Parking Ramp
- 17. Normandale - Student Center
- 18. Normandale – Student Center
- 19. Normandale – Student Center
- 20. Project Cost: $14,424,000 ◦ Campus contribution $2,000,000 ◦ Sale Amount $13,790,640 Size: ◦ Renovation 33,000 gsf ◦ New construction 25,800 sq. ft. $150 per year planned $180 FY11 $195 ($6.50 per credit) FY12 Normandale – Student Center
- 21. Project Cost: $10,080,000 ◦ Sale Amount $11,188,800 Size: ◦ Renovation 19,400 gsf ◦ New construction 21,000 gsf Student Cost ◦ $210 per year FY11 ◦ $180 per year FY12 Minneapolis Comm & Tech College – Student Center
- 22. Renovation 884,000 sq. ft. (20.3 acres) Project Cost $4,075,000 ◦ Sale Amount $4,523,250 Student Fees ◦ $3.00 per credit (FY 10) $90 ◦ $4.00 per credit (FY11) $120 ◦ $4.50 per credit (FY 13) $135 Century College – Parking Lot
- 23. Anoka-Ramsey Coon Rapids Wellness Center
- 24. Anoka-Ramsey Coon Rapids Wellness Center
- 25. $ 9,893,000 Total Cost ◦ $3,893,000 campus funds ◦ $6,000,000 bond sale Student Fee ◦ $150 per year Anoka-Ramsey Coon Rapids Wellness Center
- 26. MN State Community & Technical College - Moorhead Wellness Center
- 27. Project Cost $1,457,000 Student Fees ◦ $2.20 per credit $66 per year MSCTC – Moorhead Wellness Center
- 28. Revenue Fund Reallo Alexandria Technical C ATTACHMENT A Alex Tech Parking Improvements
- 29. Refurbished 6 main parking lots 470 spots out of a total 1369 spots Total project cost of $800,000 ◦ $500,000 from revenue fund bonds ◦ $300,000 from reserves Student fee: ◦ $2.40/credit- FY 13 ◦ $2.50/credit- FY 14 ◦ $2.60/credit- FY 15 Alex Tech Parking Improvments
- 30. Wants v. Needs Multiple Options and Cost Structures Understanding of revenues and expenditures ◦ Over time will the student fee: Decrease? Stay flat? Increase? Student Involvement
- 31. What is the campus investment? ◦ Are campus reserves being used? Survey students ◦ Email surveys ◦ Focus groups ◦ Forums Tour similar facilities Student Involvement
- 32. Revenue Fund Advisory Committee ◦ Both campus administrators and students Sharing best practices Serve as counsel to student senates ◦ Understanding financials & process ◦ Creating a survey plan Ask questions of administration/MnSCU MSCSA Involvement
- 33. Campuses’ first option should be General Obligation (GO) bonds (2/3 paid by state) Local investment by campus from carry forward/reserves Extended survey work with students Solid financial analysis needed of all projects MSCSA position
- 34. Questions?
Editor's Notes
- IntroductionM: Thanks for joining us today. We are going to be talking through the revenue fund. This topic is pretty technical, so please ask questions. If you have specific questions related to various projects, it would be the best to contact Sarah following the presentation. S: Let’s get started.
- M: Most of you know, I still have a flip phone. It can make and receive phone calls, send texts, tell time, and that’s about it. (Feel free to insert some jokes here…)
- S: While Matt’s phone works, think how much better his life would be if he had a shiny fancy Iphone. Just look how happy Justin Klander is with his Iphone. So let’s talk about the pros and cons of M getting an Iphone. S: As a student, Matt is always on the go. Think how great it would be if he could check his email on the go? M: Well, I do have a laptop, so checking emails isn’t too much of a problem. This phone is a lot more affordable for me than an Iphone would be. S: But, think about all the cool things you are missing out on. Angry Birds, Instagram, Snapchat…M: Well, my phone has a camera, I think. S: Sure, but look how cool Justin looks with his iphone. Don’t you want to be cool? M: Good point. While my current phone works well, it might be nice to be as cool as Justin. Ask the audience to raise their hands- who thinks I should get a the iphone? Who thinks I should keep the flip phone? Ok, thanks for your input. I will have to think more about this, weighs the pros and cons, and ask some good question of the cell phone company. S: Alright, let’s get to the Revenue Fund…connecting the metaphor w. rev fun
- M: Here are the topics we will run through during the rest of this workshop. We have a lot to cover, but we will try to answer as many questions as possible.
- M: Here are the various types of funding resources used to pay for construction and renovations at our colleges.
- S: explain the differences of the bonds
- M:Which kind of project is this? To pay for a new classroom you would use this type of bond…General obligationTo fix a leaky roof, you would use this type of bondHEAPRTo build a fitness center on campus, you would use this type of bondRevenue fundTo make changes to building to ensure its ADA compliant, you would use this type of bond…HEAPRTo build a library, you would use this type of bond…General obligationTo build a parking lot, you would use this type of bondRevenue fund
- S; Capacity vs. authority here
- M: MSCSA lobbied to get into the fund intitally because prior to this, campuses were having a difficult time funding parket projects and improvements.
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- M: before campuses can move forward on selling revenue fund bonds, they have to go through a specific process, beginning w/ what is outlined here.
- S; explaining this…Pro Forma Instructions for Parking Programs or ProjectsPlease detail how the parking program is funded. (i.e. a daily rate charge, permit/contract parking or by academic credits)Be sure to include an inflation factor when calculating future expenses (Minnesota Management and Budget recommends 3%). Show scheduled or projected fee increases.Indicate what year the new project will be completed and functioning.The Fund Assessment is charged annually for the prior fiscal year. It is comprised of a program fee:$20K for Residence Halls$10K for Student Union/Centers$ 5K for all other programsIn addition to the program fee, a charge of .25% of the par amount of Revenue Fund bonds is included.It is not uncommon to defer contributions to the R&R fund or deferred maintenance on a new project. Contributions should start to appear in the 3rd year of the pro forma.
- M: here are some projects that have been created through the rev fund since 2008, ask if there are any students from these campuses that know a little more about the projectsNOTE: let’s run through these projects as quickly as possible to spend more time on student invovlement
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- M: important to ensure you are asking the right questions and are getting all of the information you need from the administation
- S: because this is entirely funded w/ your money as students, you need to sure that students support this project
- M: we are part of the revenue fund advisory committee that meets to share best practices, system wide, meeting coming on 9/20, we want to serve as a resource to you for this process
- S: prior to rev fund, student spaces have existed on campus,
- M: now, does anyone have thoughts on what I should do about my phone?