Capital Debt Affordability Committee Treasurer Nancy K. Kopp, Chair Louis L. Goldstein Treasury Building 80 Calvert Street, Assembly Room Annapolis, MD 21401 Agenda October 2, 2019 1:00 PM 1) Treasurer’s Opening Comments 2) Introduction and Status of Affordability Benchmarks State Treasurer’s Office: Christian Lund, Director of Debt Management 3) 2019 Legislative Session General Assembly Actions Department of Legislative Services: Patrick Frank, Manager 4) General Fund Estimate Bureau of Revenue Estimates, Andrew Schaufele, Director 5) Assessable Base Estimate Department of Assessments & Taxation, Michael Higgs, Director 6) Review of Capital Programs: Capital Program Teresa Garraty, Executive Director, Office of Capital Budgeting, Department of Budget and Management Public School Construction Program Robert Gorrell, Executive Director, MD Interagency Committee on School Construction The next CDAC meeting will be Thursday, October 10, 2019 at 1pm. The presentations on the agenda are: Transportation Bonds, Garvee Bonds, MD Stadium Bonds, Bay Restoration Bonds, Capital Leases, and Debt of the Higher Education Institutions.
63
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Capital Debt Affordability Committee · 2019-10-03 · Capital Debt Affordability Committee Treasurer Nancy K. Kopp, Chair Louis L. Goldstein Treasury Building 80 Calvert Street,
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Transcript
Capital Debt Affordability Committee Treasurer Nancy K Kopp Chair
Louis L Goldstein Treasury Building 80 Calvert Street Assembly Room
Annapolis MD 21401
Agenda
October 2 2019 100 PM
1) Treasurerrsquos Opening Comments
2) Introduction and Status of Affordability Benchmarks State Treasurerrsquos Office Christian Lund Director of Debt Management
3) 2019 Legislative Session General Assembly Actions
Department of Legislative Services Patrick Frank Manager
4) General Fund Estimate Bureau of Revenue Estimates Andrew Schaufele Director
5) Assessable Base Estimate Department of Assessments amp Taxation Michael Higgs Director
6) Review of Capital Programs
Capital Program Teresa Garraty Executive Director Office of Capital Budgeting Department of Budget and Management
Public School Construction Program Robert Gorrell Executive Director MD Interagency Committee on School Construction
The next CDAC meeting will be Thursday October 10 2019 at 1pm The presentations on the agenda are Transportation Bonds Garvee Bonds MD Stadium Bonds Bay Restoration Bonds Capital Leases and Debt of the Higher Education Institutions
Introduction and Status of Affordability Benchmarks
1
Capital Debt Affordability Process and Status of Affordability
Benchmarks
October 2 2019
2
Topics of Discussion
1 CDAC Responsibilities
2 The Concept of Affordability
3 Components of Affordability Benchmarks
4 Status of Affordability Benchmarks
3
Capital Debt Affordability Committee (CDAC)
Responsibilities
CDAC Responsibilities
bull CDACrsquos primary charge is to submit to the Governor and the General Assembly its estimate of the total amount of new State debt that may be prudently authorized for the upcoming fiscal year (State Finance and Procurement Article sect8-112) For planning purposes only it also provides estimates for the out years
bull CDAC also recommends an authorization for Academic Facilities Bonds for the University System of Maryland Morgan State University St Maryrsquos College and Baltimore City Community College
4
CDAC Responsibilities
CDAC must consider the following factors when making its recommendation
bull The amount of State tax-supported debt that will be outstanding in the next fiscal yearas well as the amount authorized but unissued
bull The Capital Improvement Program prepared by the Department of Budget andManagement
bull Projections for school construction and improvement needs prepared by theInteragency Committee on School Construction
bull Projected debt service requirements for the next ten yearsbull Criteria that recognized bond rating agencies use to judge the quality of issues of
State bondsbull Other factors relevant to the ability of the State to meet its projected debt service
requirements for the next five years and the marketability of the Statersquos generalobligation bonds
bull Aggregate impact of public-private partnership agreementsbull The effect of new authorizations on each factor enumerated abovebull Amounts and effects of other types of State debt 5
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Introduction and Status of Affordability Benchmarks
1
Capital Debt Affordability Process and Status of Affordability
Benchmarks
October 2 2019
2
Topics of Discussion
1 CDAC Responsibilities
2 The Concept of Affordability
3 Components of Affordability Benchmarks
4 Status of Affordability Benchmarks
3
Capital Debt Affordability Committee (CDAC)
Responsibilities
CDAC Responsibilities
bull CDACrsquos primary charge is to submit to the Governor and the General Assembly its estimate of the total amount of new State debt that may be prudently authorized for the upcoming fiscal year (State Finance and Procurement Article sect8-112) For planning purposes only it also provides estimates for the out years
bull CDAC also recommends an authorization for Academic Facilities Bonds for the University System of Maryland Morgan State University St Maryrsquos College and Baltimore City Community College
4
CDAC Responsibilities
CDAC must consider the following factors when making its recommendation
bull The amount of State tax-supported debt that will be outstanding in the next fiscal yearas well as the amount authorized but unissued
bull The Capital Improvement Program prepared by the Department of Budget andManagement
bull Projections for school construction and improvement needs prepared by theInteragency Committee on School Construction
bull Projected debt service requirements for the next ten yearsbull Criteria that recognized bond rating agencies use to judge the quality of issues of
State bondsbull Other factors relevant to the ability of the State to meet its projected debt service
requirements for the next five years and the marketability of the Statersquos generalobligation bonds
bull Aggregate impact of public-private partnership agreementsbull The effect of new authorizations on each factor enumerated abovebull Amounts and effects of other types of State debt 5
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
1
Capital Debt Affordability Process and Status of Affordability
Benchmarks
October 2 2019
2
Topics of Discussion
1 CDAC Responsibilities
2 The Concept of Affordability
3 Components of Affordability Benchmarks
4 Status of Affordability Benchmarks
3
Capital Debt Affordability Committee (CDAC)
Responsibilities
CDAC Responsibilities
bull CDACrsquos primary charge is to submit to the Governor and the General Assembly its estimate of the total amount of new State debt that may be prudently authorized for the upcoming fiscal year (State Finance and Procurement Article sect8-112) For planning purposes only it also provides estimates for the out years
bull CDAC also recommends an authorization for Academic Facilities Bonds for the University System of Maryland Morgan State University St Maryrsquos College and Baltimore City Community College
4
CDAC Responsibilities
CDAC must consider the following factors when making its recommendation
bull The amount of State tax-supported debt that will be outstanding in the next fiscal yearas well as the amount authorized but unissued
bull The Capital Improvement Program prepared by the Department of Budget andManagement
bull Projections for school construction and improvement needs prepared by theInteragency Committee on School Construction
bull Projected debt service requirements for the next ten yearsbull Criteria that recognized bond rating agencies use to judge the quality of issues of
State bondsbull Other factors relevant to the ability of the State to meet its projected debt service
requirements for the next five years and the marketability of the Statersquos generalobligation bonds
bull Aggregate impact of public-private partnership agreementsbull The effect of new authorizations on each factor enumerated abovebull Amounts and effects of other types of State debt 5
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
2
Topics of Discussion
1 CDAC Responsibilities
2 The Concept of Affordability
3 Components of Affordability Benchmarks
4 Status of Affordability Benchmarks
3
Capital Debt Affordability Committee (CDAC)
Responsibilities
CDAC Responsibilities
bull CDACrsquos primary charge is to submit to the Governor and the General Assembly its estimate of the total amount of new State debt that may be prudently authorized for the upcoming fiscal year (State Finance and Procurement Article sect8-112) For planning purposes only it also provides estimates for the out years
bull CDAC also recommends an authorization for Academic Facilities Bonds for the University System of Maryland Morgan State University St Maryrsquos College and Baltimore City Community College
4
CDAC Responsibilities
CDAC must consider the following factors when making its recommendation
bull The amount of State tax-supported debt that will be outstanding in the next fiscal yearas well as the amount authorized but unissued
bull The Capital Improvement Program prepared by the Department of Budget andManagement
bull Projections for school construction and improvement needs prepared by theInteragency Committee on School Construction
bull Projected debt service requirements for the next ten yearsbull Criteria that recognized bond rating agencies use to judge the quality of issues of
State bondsbull Other factors relevant to the ability of the State to meet its projected debt service
requirements for the next five years and the marketability of the Statersquos generalobligation bonds
bull Aggregate impact of public-private partnership agreementsbull The effect of new authorizations on each factor enumerated abovebull Amounts and effects of other types of State debt 5
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
3
Capital Debt Affordability Committee (CDAC)
Responsibilities
CDAC Responsibilities
bull CDACrsquos primary charge is to submit to the Governor and the General Assembly its estimate of the total amount of new State debt that may be prudently authorized for the upcoming fiscal year (State Finance and Procurement Article sect8-112) For planning purposes only it also provides estimates for the out years
bull CDAC also recommends an authorization for Academic Facilities Bonds for the University System of Maryland Morgan State University St Maryrsquos College and Baltimore City Community College
4
CDAC Responsibilities
CDAC must consider the following factors when making its recommendation
bull The amount of State tax-supported debt that will be outstanding in the next fiscal yearas well as the amount authorized but unissued
bull The Capital Improvement Program prepared by the Department of Budget andManagement
bull Projections for school construction and improvement needs prepared by theInteragency Committee on School Construction
bull Projected debt service requirements for the next ten yearsbull Criteria that recognized bond rating agencies use to judge the quality of issues of
State bondsbull Other factors relevant to the ability of the State to meet its projected debt service
requirements for the next five years and the marketability of the Statersquos generalobligation bonds
bull Aggregate impact of public-private partnership agreementsbull The effect of new authorizations on each factor enumerated abovebull Amounts and effects of other types of State debt 5
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
CDAC Responsibilities
bull CDACrsquos primary charge is to submit to the Governor and the General Assembly its estimate of the total amount of new State debt that may be prudently authorized for the upcoming fiscal year (State Finance and Procurement Article sect8-112) For planning purposes only it also provides estimates for the out years
bull CDAC also recommends an authorization for Academic Facilities Bonds for the University System of Maryland Morgan State University St Maryrsquos College and Baltimore City Community College
4
CDAC Responsibilities
CDAC must consider the following factors when making its recommendation
bull The amount of State tax-supported debt that will be outstanding in the next fiscal yearas well as the amount authorized but unissued
bull The Capital Improvement Program prepared by the Department of Budget andManagement
bull Projections for school construction and improvement needs prepared by theInteragency Committee on School Construction
bull Projected debt service requirements for the next ten yearsbull Criteria that recognized bond rating agencies use to judge the quality of issues of
State bondsbull Other factors relevant to the ability of the State to meet its projected debt service
requirements for the next five years and the marketability of the Statersquos generalobligation bonds
bull Aggregate impact of public-private partnership agreementsbull The effect of new authorizations on each factor enumerated abovebull Amounts and effects of other types of State debt 5
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
CDAC Responsibilities
CDAC must consider the following factors when making its recommendation
bull The amount of State tax-supported debt that will be outstanding in the next fiscal yearas well as the amount authorized but unissued
bull The Capital Improvement Program prepared by the Department of Budget andManagement
bull Projections for school construction and improvement needs prepared by theInteragency Committee on School Construction
bull Projected debt service requirements for the next ten yearsbull Criteria that recognized bond rating agencies use to judge the quality of issues of
State bondsbull Other factors relevant to the ability of the State to meet its projected debt service
requirements for the next five years and the marketability of the Statersquos generalobligation bonds
bull Aggregate impact of public-private partnership agreementsbull The effect of new authorizations on each factor enumerated abovebull Amounts and effects of other types of State debt 5
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
6
The Concept of Affordability
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
The Concept of Affordability
bull To make its recommendation CDAC uses the concept of affordability
bull The crux of affordability is not simply whether or not the State can pay itsdebt service instead affordability implies the ability to manage debt overtime to achieve the Statersquos goals
bull CDACrsquos challenge is to find a balance between providing sufficient funds fornecessary investment in capital projects while remaining within theframework of the Statersquos debt capacity
bull The two self-imposed affordability benchmarks used to determine debtcapacity arendash Tax-supported debt outstanding should be no more than 40 of total
personal incomendash Tax-supported debt service should be no more than 80 of total tax
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
(24)ndash Bay Bonds (2)ndash Capital Leases (2)ndash GARVEEs (lt1)ndash Stadium Authority Leases (lt1)
bull Personal Incomendash Wages salaries and benefitsndash Dividends interest and rentndash Government transfers to individualsndash Business ownerrsquos income
9
Tax-supported debt outstanding is defined as the outstanding principal on State debt that is either repaid with State tax revenue or uses State tax revenue as a backstop
Personal income encompasses all sources of individual income in Maryland
The percentage listed next to each type of tax-supported debt represents the outstanding principal of that type of debt as a percentage of total tax-supported debt outstanding during fiscal year 2019
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
(19)ndash GARVEEs (5)ndash Bay Bonds (2)ndash Capital Leases (1)ndash Stadium Authority Leases (1)
bull Revenuesndash General Funds (76)ndash Transportation Taxes (14)ndash State Property Taxes (3)ndash Gaming Revenues (2)ndash Federal Transportation Grants (2)ndash Transfer Tax (1)ndash Bond Premium (lt1)ndash Bay Restoration Fees (lt1)ndash Stadium Lease Revenue (lt1)ndash Federal Interest Subsidies (lt1)
10
Tax-supported debt service is defined as debt service on bonds that is either repaid with State tax revenue or uses State tax revenue as a backstop
Revenues are defined as tax revenues and direct sources of repayment for State tax-supported debt
The percentage next to each type of tax-supported debt represents the debt service of that type of debt as a percentage of total tax-supported debt service during fiscal year 2019 The percentage next to each revenue source represents that revenue source as a percentage of total tax revenues during fiscalyear 2019
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
11
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Affordability Benchmarks Under 2018 SAC Recommendation
12Estimates as of 1012019 Tentative and subject to change
Debt Outstanding as a Percentage of Personal Income
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
2019 Legislative Session General Assembly Actions
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
1
2019 Legislative Session General Assembly Highlights
bull General Assembly Passes Capital Budget that Authorizes $1085 Million in Net GeneralObligation (GO) Bonds House Bill 101 (Chapter 14) authorizes $1085 million in netdebt which includes $1092 million in new authorizations that are offset by reducing prioryear authorizations by $7 million This authorization is within the affordability criteria setby CDAC and the authorization limits set by the Spending Affordability Committee (SAC)
bull New Academic Revenue Debt Authorization Totals $34 Million CDAC recommendedthat academic revenue bond debt issued in fiscal 2020 be limited to $34 million House Bill1352 (Chapter 148) authorized $34 million in academic revenue bonds to support
bull $186 million for facilities renewal projects budgeted within the University Systemof Maryland System Office
bull $6 million for a new School of Pharmacy and Health Professions building and floodmitigation for the University of Maryland Eastern Shore
bull $5 million for an academic building at the Southern Maryland Higher EducationCenter
bull $2 million for a science facility at Towson University and
bull $24 million for utility upgrades at the University of Maryland Baltimore County
bull Increase the Maryland Stadium Authorityrsquos (MSA) Debt Limit for Ocean CityConvention Center (OCCC) Bonds to Fund a Renovation Project House Bill 178(Chapter 217) and Senate Bill 177 (Chapter 218) increase MSA debt capacity for OCCCfrom $173 million to $245 million and the Ocean City contribution is increased from$147 million to $15 million The State anticipates issuing $245 million of which $227million will support the project while the City will contribute $15 million The lawstipulates that ownership of these improvements is 60 MSA and 40 Ocean City
bull Authorize MSA Bonds for the Planning and Design of a Baltimore City ConventionCenter (BCCC) renovation House Bill 801 (Chapter 695) requires MSA and BaltimoreCity to enter into a written agreement to begin planning and design of an expansion orrenovation of BCCC The agreement must include a provision allocating twondashthirds of theplanning and design costs to MSA and onendashthird to the City which is consistent with priorrenovations and expansions
bull Alter the Date by which CDAC Must Annually Submit Its Report Senate Bill 85 (Chapter298) extends the date from October 1 to October 20
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
General Fund Estimate
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
BRE SEPTEMBER ESTIMATES
LONG TERM GROWTH amp RELATED INFORMATION FOR CDAC10022019
Office of the ComptrollerState of Maryland
Andrew Schaufele Director Bureau of Revenue Estimates
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Key Eventsbull Closeout for FY19 ndash finished $217M better than estimatebull September BRE meeting (FY21 and beyond are relative
bull The average expected growth rate for FY22 and beyond is ~ 32bull Was 36 after March estimate
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Structural Issues Impacting Key Categories
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
In Common ndash Aging Population
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
CausesWithholding (90 of income tax and ~ 45 of GF)bull Lower productivity reducing wages (age related)bull Job mix unfavorable to wages (top 3 industries contracted in 2018)bull Retirement churn reducing wages
Sales Tax (~25 of GF)bull Age Composition of Tax Base reducing collectionsbull Last major structural change to sales tax base was NEVER
(enacted in 1947)bull Lots of rate changes lots of added exemptions some services addedbull In 1947 ldquoGoodsrdquo made up 61 of Consumer Expendituresbull In 2018 ldquoGoodsrdquo made up 31 of Consumer Expenditures
bull Ameliorated by SCOTUS Wayfair decision Comptrollerresponse and subsequent MGA Marketplace legislation
bull Competing with Casinos
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Thank You
Andrew SchaufeleComptroller of MarylandDirector Bureau of Revenue Estimates4102607450aschaufelecompstatemdus
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Assessable Base Estimate
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Base EstimatesCapital Debt Affordability Committee ndash October 2 2019
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Overview
The assessable base is provided by SDAT in November and March The November assessable base reflects the recently completed
reassessment
The March assessable base reflects new construction additions andappeal adjustments
Estimates represent the taxable assessable base It is important to always remember that base estimates ARE A
SNAPSHOT in time
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
March 2019 Base Estimate for FY2019
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
March 2019 Base Estimate for FY2020
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
November 2018 Base Estimate for FY2019
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
November 2018 Base Estimate for FY2020
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Taxable Assessable Base Projections
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Questions
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Capital Program
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Review of theCapital Improvement Program
Presentation to
Capital Debt Affordability Committee
by
Teresa GarratyMaryland Department of Budget amp Management
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
level to the Spending Affordability Committee (SAC)
Levels The Governorrsquos CIP aligns with SACrsquos higher level of bond
authorizations
Summary of FY 2021 ndash FY 2025 Capital Budget Requests
1
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
FY 2020 ndash FY 2024 CIP Based on Spending Affordability Committee (SAC) Limits
bull The Governorrsquos FY 2020 CIP and out-year planninglevels are based on the SAC 2018 Recommendationbull FY 2021- $1095 billionbull FY 2022 - $1105 billionbull FY 2023 - $1115 billionbull FY2024 - $1125 billionbull FY 2025 - $1135 billion
2
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Governorrsquos CIP added $550 million in necessary projects from FY 2020 -2024
3
The higher level of funding was used tobull Focus on State Facilities Renewal
bull Increased the DGS Statewide Facilities Renewal Program to an all timerecord high of $344 m with a total of $135 m in the CIP
bull Added $104 m in the CIP for Facilities Renewal Programs for multiple HigherEducation Institutions
bull An additional $260 m provided to renovate or replace State facilities
bull Provide Funding for Rural Broadband Infrastructurebull Increase Funding for Community Collegesbull Add funding for DHCD Programs such as Strategic Demolition
($4135 m) and Rental Housing Programs ($113 m)bull Add funding for MDE Flood Management Program
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Requested Versus Planned GO Bond Levels
4
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
FY 2021 FY 2022 FY 2023 FY 2024 FY 25
Dollars in
thou
sand
s
Fiscal Year
Requests versus GO Bond Authorizations
5‐Year Anticipated GO Bond Request 2019 CIP Recommendation (SAC)
2018 CDAC Recommendation
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Summary of Capital Budget Requests by Fiscal YearFY 2021 ndash FY 2025
($ in Millions)
5
F Y 2 0 2 1 F Y 2 0 2 2 F Y 2 0 2 3 F Y 2 0 2 4 F Y 2 0 2 5 To t a ls
State-OwnedFacilit ies
508 655 712 62 8 819 3 32 2
Cap ital GrantPro g rams
104 3 93 8 90 1 674 696 4 252
Leg is lat ive Init iat ives 43 41 41 4 1 41 207
Es t imat e d R e q ue s t To t a l
159 4 16 3 4 16 5 4 13 4 3 155 6 7 78 1
CIP Deb t Limit 109 5 110 5 1115 112 5 113 5 5575
CIP Oversubscrip t ion 4 9 9 52 9 53 9 2 18 4 2 1 2 2 0 6
Oversubcribed b y 14557 1478 7 148 3 4 119 3 8 1370 9 139 57
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Request Costs Could Increase
bull The cost of all of the requests reported couldincrease due to two factors
ndash The State is experiencing higher construction costsdue to a tight bid climate in the construction industry
ndash Construction cost escalation is especially acute in theoutlying areas of the State
6
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Major Sources of Funding Demand($ in Millions)
State-owned Facilities University System of Maryland $1067 Correctional Facilities $ 670 Morgan State University $ 467 Judiciary $ 140
Capital Grant Programs Public School Construction $2359 Housing $ 680 Community Colleges $ 517 Environmental Programs $ 249 UMMS $ 143
7
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Summary of Governor Hoganrsquos Planned Capital Improvement ProgramFY 2021 ndash FY 2025
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
The Planned CIP Debt Levels Remain Under CDAC Debt Limits
9
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Public School Construction Program
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Robert Gorrell Executive DirectorKim Spivey Director of Fiscal Services
Honeygo Elementary School Baltimore CountyCompleted for School Year 2018-2019
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Capital Grant Programsas administered by the
Interagency Commission on School Construction
Public School Facilities Quick FactsAffordable and Educationally Sufficient SchoolsCapital Funding and the Capital NeedConstruction Cost Escalation FactorsIAC Construction Cost21st Century School Facilities Act (HB 1783)FY 2021 Capital Improvement Program Request
Presentation Overview
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Public School Facilities Quick Facts
bull Number of students ndash 863071bull Number of schools ndash 1383bull Square feet (SF) within schools ndash 140056687bull Average gross square feet (GSF) per student ndash 162 (157 FY 19)bull Replacement Value ndash $549 B ( $391 GSF with Site Cost)bull Annualized Replacement Value (ARV or $548B50 years) ndash
$1095 billionbull Average age of GSF 30 years (down 6 years since 2005)
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
A Portfolio-Management Approach
Maximizing the Return on All Investments
Engaging the Support of the Public
Affordable and
Educationally Sufficient Schools
Measuring the Needs
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Simple Portfolio Presentation
CurrentConditionofMarylandrsquosPortfolio
30
0
5
10
15
20
25
30
35
40
45Average Age of LEA Facilities 2010 - 2019
2010201120122013201420152016201720182019
The relative age difference between LEAs has remained status quo but overall the
Older facilities Younger facilities
Increasing2019 Statewide
Managing for Results Objective 11 For each local education agency (LEA) in any one year the deviation from the statewide average age of the square footage for that year will remain constant or improve compared to the deviation recorded for fiscal year 2005 (baseline year)
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
FY
Bond
EGRC
HSFF
Paygo
Contingency Reserves
Total CIP Allocations
CIP Allocation from Bonds
CIP Allocation from Paygo
CIP Allocation from Contingency Reserves
FY 2006
234400
2400
15000
251800
9309
095
596
FY 2007
300669
2400
19603
322672
9318
074
608
FY 2008
385800
2400
13628
401828
9601
060
339
FY 2009
327400
19582
346982
9436
000
564
FY 2010
260000
6653
266653
9750
000
250
FY 2011
250000
13724
263724
9480
000
520
FY 2012
240344
23739
264083
9101
000
899
FY 2013
326393
22775
349168
9348
000
652
FY 2014
300000
21876
321876
9320
000
680
FY 2015
275000
50255
325255
8455
000
1545
FY 2016
280000
20000
38189
338189
8871
000
1129
FY 2017
280000
40000
44993
364993
8767
000
1233
FY 2018
280000
62500
44900
387400
8841
000
1159
FY 2019
313900
68200
18322
400422
9542
000
458
FY 2020
251800
68200
30000
50133
400133
7997
750
1253
Totals
4305706
258900
30000
7200
403372
5005178
9120
074
806
Capital Funding and the Capital Need Since FY 2006 the State of Maryland has allocated an average of $304 million of new funding each fiscal year to public
school construction through the capital improvement program The Kopp Commission recommended an annual State funding goal of $250 million If this goal were adjusted at 3
inflation the amount today would be $389 million The goal of $345 million included in the 21st Century School Facilities Act has been met for FY 2019 amp FY 2020 The available funds by source are shown in the chart below
EGRC ndash Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms Six LEAs were eligible for these funds in FY 16 and FY 17 Five LEAs were eligible in FY 18 FY 19 and FY 20HSFF ndash Healthy Schools Facility Fund
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Summary of Annual Capital Improvement ProgramLEA Funding Requests and State Funding by Fiscal Year
FY 2006 ndash FY 2020($ in Millions)
CIP requests represent only a partial picture of the capital needs of the local school systems The 21st Century School Facilities Act has established a goal of $400 million as soon as practicable or to be phased in over several years if fiscalconstraints prevent the State from fully funding this goal
Shown in the chart above are the annual funding requests from the LEAs and the amount of State funding allocated in the last 13 years State funding allocations have exceeded 50 of the local requests in only seven of the last 15 years (FY 2013 2015 2016 2017 2018 2019 and 2020)
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Percentage of Building Systems Funding by Fiscal YearFY 2006 ndash FY 2020
($ in Millions)
Of the $496 billion allocated in FY 2006-FY 2020 $35 billion or 71 for major construction projects $14 billion or 28 has been allocated to building system projects Less than 1 was allocated to other purposes
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Number of Capital Improvement ProgramPlanning and Funding Requests and Approvals by Fiscal Year
FY 2006 ndash FY 2020
Figures for FY 2014 include 259 requests and 227 approved projects for the FY 2013 Energy Efficiency Initiative (EEI) and 20 requests and 19 approved projects for the FY 2014 Air Conditioning Initiative (ACI)
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
LEA5-Year
Change
9302017Total
Enrollment Total
EnrollmentAllocation (Rounded)
Statewide 255-Year Change 150 37
Anne Arundel 46 80860 1722 $6890000
Caroline 42 5515 117 $470000
Frederick 42 41329 880 $3522000
Howard 75 56405 1202 $4806000
Montgomery 52 157949 3365 $13459000
Prince Georges 47 127376 2713 $10853000
Total 469434 100 $40000000
The Full-Time Equivalent enrollment is determined by the Maryland State Department of Education (MSDE) Office of Finance and Administration and published annually within the Foundation Program for the Major State Aid Programs
The eligible LEAs are determined based on one or both of the following factors1 Significant Enrollment Growth Full-Time Equivalent (FTE) enrollment growth has exceeded
150 of the Statewide Average over the past five years or2 Significant Number of Relocatable Classrooms An average of more than 300 Relocatable
classrooms in a local school system over the past 5 years The FY 2021 CIP EGRC Funding Allocations distributions are in proportion to the systemrsquos share
of the total Full-Time Equivalent (FTE) enrollment for the eligible LEAs as of September 30 2018
Sheet1
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
LEA
5-YearChange
9302017Total Enrollment
Total Enrollment
Allocation
Allocation (Rounded)
Statewide 255-Year Change 150
37
Anne Arundel
46
80860
1722
$6889978
$6890000
Caroline
42
5515
117
$469949
$470000
Frederick
42
41329
880
$3521603
$3522000
Howard
75
56405
1202
$4806192
$4806000
Montgomery
52
157949
3365
$13458676
$13459000
Prince Georges
47
127376
2713
$10853602
$10853000
Total
469434
100
$40000000
$40000000
Construction Cost Escalation
For FY14 through FY16 the IAC used the DBM construction escalation factor of 4 each per year To this calculation for new construction 12 was added for site development
A 17 adjustment was added for FY17 that brought site development to 19 and total project cost in line with 2016 bid results
The FY20 CIP was adjusted by 5 over FY19 or $378 A 4 escalation was utilized plus 1 to compensate for the elimination of the 25 State contingency for change orders Site development at 19 is included
Studying historic trends over the last 20 years construction has increased 1-15 over the US Cost and Pricing Index (CPI)
The IAC will continue to study market trends If the trends indicate a need for a change in the costsquare foot number used for FY 2021 then a revised number will be issued
Sheet1
Sheet2
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Bid Date
Buildingonly
Constructionwith Site
ofchange fromPrior Year
2013 (FY 2014)
$21500
$24080
4
2014 (FY 2015)
$22400
$25088
4
2015 (FY 2016)
$23300
$26096
4
2016 (FY 2017)
$28200
$33558
21
2017 (FY 2018)
$29300
$34867
4
2018 (FY 2019)
$30200
$35938
3
2019 (FY 2020)
$31800
$37842
5
2020 (FY 2021)
$32900
$39151
3
FY 2017 Site Cost increased to 19
IAC Construction Cost Figure bull The IAC construction cost figure per square foot is a factor used in the calculation to
determine state participation in an eligible project and is uniformly applied to all LEAsregardless of actual construction cost
bull Costs not included in the figure and not eligible for state share funding are earlyplanning design and the furniture fixtures and equipment (FFampE) required in allschools The actual gross square foot cost that the State participates can be lowerthan the calculated figure
bull This figure is of particular importance to less-wealthy jurisdictions that depend heavilyon State funding If the State allocation is short a project or projects may not proceed
bull Bidders do not set their costs artificially based on the Statersquos number but rather on acomplex set of factors that include competitively bid materials profits and sometimescomponents of labor Bidders also assess risks such as the quality of bid documentsand prompt payment
bull If a project bids below budget excess State funds will be returned to that LEArsquosaccount to be used within two years Projects may use available appropriation fundsfor other eligible projects in the CIP that were partially funded deferred due to fiscalconstraints or these funds may be held in reserve for the next fiscal yearrsquos CIPrequests
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
bull Requires the adoption of sufficiency standards to establish the minimum acceptable condition of school facilities
bull Requires the IAC to conduct an initial and then ongoing statewide facilities assessments measuring all school facilities against the adopted sufficiency standards
bull Requires the IAC to house and distribute technical expertise and best practices on school construction
bull Requires that the IAC streamline processes by utilizing technology which will be accomplished through the development of a business process management system
bull Creates workgroups to study existing IAC processes and policies and to consider whether and how information provided by the statewide assessment should be used to determine future school construction funding allocations For more information and to follow the activities of the Workgroups refer to
Educational Development Specification Workgroup httpiacmarylandgovWorkgroupsEDSWEDSWindexcfmAssessment and Funding WorkgrouphttpiacmarylandgovWorkgroupsFundingWGFundWGindexcfm
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
The estimated FY 2020 ndashFY 2025 CIP projected State funding requests
based upon LEA estimates is $26 billion or an average of $436 million per year This would equate to a total construction value of
TOTAL STATE 716725 472011 468541 453535 261891 243754 2616457 TOTAL ADJUSTED STATE
716725 490891 506774 510165 306375 296564 2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflationTOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
Sheet1
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
LEA
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
TOTAL
Allegany
3034
- 0
- 0
- 0
- 0
- 0
3034
Anne Arundel
54031
46764
59680
45881
34543
59862
300761
Baltimore County
165515
94897
17250
128850
27416
- 0
433928
Calvert
2367
3372
13873
5384
14104
7073
46173
Caroline
13845
13845
7867
6210
13452
11371
66590
Carroll
8849
- 0
- 0
- 0
- 0
- 0
8849
Cecil
4000
- 0
- 0
- 0
- 0
- 0
4000
Charles
38815
33914
28841
31165
19395
3165
155295
Dorchester
4403
2720
6434
10309
5788
- 0
29654
Frederick
22643
19500
19927
17246
4283
- 0
83599
Garrett
1965
- 0
- 0
- 0
- 0
- 0
1965
Harford
13546
20162
15102
15066
44143
52553
160572
Howard
16116
49051
73255
43743
30362
41314
253841
Kent
1541
2371
1947
- 0
- 0
- 0
5859
Montgomery
115421
32252
40905
4222
- 0
- 0
192800
Prince Georges
79721
67943
76371
60666
21673
- 0
306374
Queen Annes
673
2056
11479
9970
575
344
25097
St Marys
8613
2296
5099
2516
2248
3307
24079
Somerset
3161
- 0
8226
9462
6837
- 0
27686
Talbot
12707
- 0
1936
400
477
- 0
15520
Washington
13678
7867
13211
12722
21624
18550
87652
Wicomico
14167
9000
8316
- 0
- 0
- 0
31483
Worcester
4336
1232
2418
1631
831
6728
17176
Baltimore City
97239
62769
56404
48092
14140
39487
318131
Maryland School for the Blind
16339
- 0
- 0
- 0
- 0
- 0
16339
TOTAL STATE
716725
472011
468541
453535
261891
243754
2616457
TOTAL ADJUSTED STATE
716725
490891
506774
510165
306375
296564
2827495
TOTAL STATE Estimated based on FY 2020 requests with no adjustment for inflation
TOTAL ADJUSTED STATE Adjusted for inflation based on FY 2020 requests compounded at 4 percent per year
FY 2021 Capital Improvement Program RequestThe enacted capital budget for FY 2020 consisted of a school construction budget of $320 million in GO Bonds for the FY 2020 Capital Improvement Program and $435 million from General Funds The IAC FY 2021 capital request is consistent with the Governorrsquos proposed budget and includes funding for the CIP ASP EGRC NPASP HSFF SSGP the Revolving Loan Fund and Building Opportunity Fund
FY 2021 Capital RequestsThe IAC requests the following allocations in the FY 2021 Capital Budget
Target FY 2021 CIP Allocation $340000000Target FY 2021 Building Opportunity Fund $280000000Target FY 2021 CIP EGRC Allocation $40000000Target FY 2021 ASP Allocation $6109000Target FY 2021 Non-Public ASP Allocation $3500000Target FY 2021 Revolving Loan Fund $20000000Target FY 2021 Healthy School Facility Fund $30000000Target FY 2021 Safety School Grant Program $10000000Total Target FY 2021 Capital Allocation $729609000
2019 Legislation introduced for the Building Opportunity Act (SB159HB153) was not enacted
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
October 2 CDAC Presentations
0-1st Meeting CDAC agenda
Presentation dividers
1-CDAC Briefing 2019 session SAC Legislation
3-slides SDAT Capital Debt Affordability Committee Presentation
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
5-correctedDBM 2019 (FY 2021) CDAC FINAL
6- PSCP 2019 09 03 CDAC Report PSCP Capital Funding
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
LEA CIP Projections FY 2020 ndash 2025 $4 Billion
FY 2021 Capital Improvement Program Request
4-STO-DMD GO Bonds
2018 Update on Maryland General Obligation Bonds for the Capital Debt Affordability CommitteeSeptember 5 2018
Topics of Discussion
Fiscal Year 2018 GO Bond Issuances
Fiscal Year 2019 GO Bond Issuances
GO Bonds Issued in Prior Five Fiscal Years including FY 2019 YTD
Outstanding GO Debt and Amounts Authorized but Unissued
Current Projections for Future Issuances
Summary of Projected Debt ActivityUnder Governorrsquos Plan ($995 Annually)
Fiscal Year 2019 Capital Budget Authorization History
Impact of Federal Tax Cuts
Refunding Potential
Use of Variable Rate Debt Bond Insurance Derivatives and Guaranteed Investment Contracts (GICS)
Slide Number 13
Status of Affordability Ratios
2- 2019 Affordability Introduction
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADP893tmp
Capital Debt Affordability Process and Status of Affordability BenchmarksOctober 2 2019
Topics of Discussion
Capital Debt Affordability Committee (CDAC) Responsibilities
CDAC Responsibilities
CDAC Responsibilities
The Concept of Affordability
The Concept of Affordability
Components of Affordability Benchmarks
Debt Outstanding to Personal Income
Debt Service to Revenues
Status of Affordability Benchmarks
Affordability Benchmarks Under 2018 SAC Recommendation
ADPB3ACtmp
BRE September Estimateslong term growth amp related information for Cdac10022019
Key Events
Entire Expansion Has Seen Frustratingly Slow Growth
Maturing Expansion ndash Capital Gains
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
Structural Issues Impacting Key Categories
In Common ndash Aging Population
Causes
Thank You
ADPFE82tmp
Base Estimates
Overview
Slide Number 3
Slide Number 4
Slide Number 5
Slide Number 6
Slide Number 7
Questions
ADP58E9tmp
Interagency Commission on School Construction REPORT TO THE CAPITAL DEBT AFFORDABILITY COMMITTEE
Capital Grant Programsas administered by theInteragency Commission on School Construction
Public School Facilities Quick Facts
Slide Number 4
Slide Number 5
Capital Funding and the Capital Need
Slide Number 7
Slide Number 8
Slide Number 9
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms (EGRC)
Construction Cost Escalation
IAC Construction Cost Figure
21st Century School Facilities Act(HB1783 2018 Md Laws Chap 14 )
