F–6 STANDING COMMITTEES Finance and Asset Management Committee F–6/201-17 1/12/17 Monthly Capital Project and Debt Report and Update on Capital Project Governance and Process Improvements INFORMATION ITEM For information only. BACKGROUND The Capital Project and Debt Report is a standing agenda item. In addition to the monthly report, Mike McCormick, Associate Vice President of Capital Planning and Development, will provide an oral update on capital project governance and process improvements put into place over the past year. Attachments 1. Monthly Debt Report as of 11/30/2016 2. One Capital Plan (2017-2023) – for reference 3. Capital Project Approval Process – for reference 4. Active Capital Projects Summary as of November 30, 2016
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F–6 STANDING COMMITTEES Finance and Asset Management Committee
F–6/201-17 1/12/17
Monthly Capital Project and Debt Report and Update on Capital Project Governance and Process Improvements INFORMATION ITEM For information only. BACKGROUND The Capital Project and Debt Report is a standing agenda item. In addition to the monthly report, Mike McCormick, Associate Vice President of Capital Planning and Development, will provide an oral update on capital project governance and process improvements put into place over the past year. Attachments
1. Monthly Debt Report as of 11/30/2016 2. One Capital Plan (2017-2023) – for reference 3. Capital Project Approval Process – for reference 4. Active Capital Projects Summary as of November 30, 2016
Total Debt Capacity 755$
Plus: Remaining CAP(2) 100
855
Less: Authorized Projects(3) (430)
Project Capacity 425$
Less: Projects authorized this year(4) (20)
Remaining Project Capacity 405$
(2) 10% of the Invested Funds (IF), less previously allocated Capital Assets Pool (CAP) dollars
(5) Excludes Valley Limited Tax General Obligation Bonds and Revenue Bonds
(6) Excludes principal payments on Commercial Paper
(4) Includes Court 17
(3) Projects approved before the May debt capacity analysis, including Life Sciences, Housing Phase 4a and other authorized projects
Recent Events
Estimated Project Capacity
FY 2016-2021 (in millions)
As of 11/30/2016
External Debt Portfolio - $2,384 Million
Annual Debt Service (5)
(1) 80/20 weighting between the tax-exempt and taxable 30 year long term interest rates to illustrate the University's portfolio
Long Term Credit Rating: Aaa/AA+
Internal Lending Rate: 4.50%
Weighted Average Cost of Capital: 3.43%
Monthly Debt ReportAs of 11/30/2016
The current 30 year weighted average fixed borrowing cost is estimated to be 4.04%(1)
Bonds yields have increased significantly over the last two months. Since the University priced bonds on October 18th, long-term tax-exempt
interest rates have increased by approximately 0.60%. Expectation of a rate hike by the Federal Reserve, funds leaving the municipal market,
high issuance of debt, and uncertainty surrounding the Presidential election have all impacted interest rates
Focusing on the short-term market, rates had increased dramatically by mid-October in anticipation of money market regulatory reform but
have since stabilized and slightly declined. The short-term tax exempt index (SIFMA) is currently it is 0.66%. The University priced $42 million of
commercial paper (to support HR Payroll) on December 1st at 0.80%
The University has $2,384 million of external debt outstanding. This is approximately $118 million
higher than the previous report (9/30/2016) due to $3 million of principal payments and $121 million
of new debt through the issuance of the 2016 GRBs and refunding of the 2008 GRBs
Targets: 2,425$ 2,000,000 $100 $250 $425 $450 $600 $600Note: Item numbers do not represent priorities
F–6.2/201-17 1/12/17
Page 2 of 2
Capital Project Approval Process This document is intended to explain the process by which the University and Board of Regents authorizes the physical development of the university. Process goals:
• Ensure controls are in place → establish and standardize processes • Ensure capital plan is in place → establish and update One Capital Plan • Manage & implement the plan → prioritize projects and identify funding or financing
Legend:On TrackRecovery Plan in PlaceUnrecoverable
Arrow Up Trending Up Month Over MonthArrow Down Trending Down Month Over Month
Notes:Business Equity numbers are now shown for all but the developer led projects. Numbers are improving.NanoEngineering & Sciences is tracking within budget, schedule is lagging due to added 1st floor build-out.Animal Research and Care project continues to be over-budget. Budget adjustment will be required. UW Medical Center remains over budget. Efforts are focused on reducing the scope to match budget/funding. South Lake Union 3.2 is moving in the right direction, but may still require a budget adjustment & funding. North Campus Housing is trending well, budget target is well within reach. $ All Dollars in Millions
Project Health
Business Equity Spend
Financial Details Schedule
n/a
n/a
n/a
Business Equity
12/27/2016 Active Capital Projects Summary Attachment 3 Page 1 of 1