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

Weighted average cost of capital: 3.43%

Portfolio Composition: 98% fixed rate; 2% variable rate

$142 million in internal funding provided by the CAP is excluded from the external debt portfolio

A project capacity update was presented at the May 2016 Regents

meeting based on 2015 audited financial statements and

projections

Figures represent the estimated amount of additional debt the

University can issue over the next five years while aligning with

peer minimum ratios

$405 million of project capacity is available of which $305 million

can come from debt plus $100m from CAP

ILP Debt, 73%

Non-ILP Debt,

27%

Maximum Annual Debt

Service: $206M

$0

$30

$60

$90

$120

$150

$180

$210

Millio

ns

General Revenue Bonds State Issued Bonds, Payable by UW Lease Revenue Bonds Other CP (6) NWH

ATTACHMENT 1F–6.1/201-17 1/12/17

Page 1 of 2

Project Purpose Balance(1)Final Maturity

Molecular Engineering Building Instruction and Research 70.4 2043

Animal Research and Care Facilities Instruction and Research 69.4 2047

Dempsey Hall Instruction and Research 38.5 2041

Foege Building Instruction and Research 30.4 2031

UW Bothell Phase 3 Instruction and Research 25.0 2043

William H. Gates Law School Instruction and Research 23.5 2028

AAALAC Instruction and Research 22.4 2035

Ben Hall Instruction and Research 17.8 2037

Denny Hall Instruction and Research 15.0 2046

Ocean Sciences Instruction and Research 12.4 2024

Physics-Astronomy Instruction and Research 5.8 2023

Other Instruction and Research Instruction and Research 26.4 various

Subtotal Instruction and Research 357.1

South Lake Union (Ph I, II, 3.1, & 3.2) UW Medicine 395.8 2048

UWMC Expansion UW Medicine 201.9 2046

NW Hospital UW Medicine 72.3 2033

UWMC Surgery Pavilion UW Medicine 43.8 2028

Other UW Medicine UW Medicine 25.2 various

Subtotal UW Medicine 739.0

Housing Expansion Student Life 392.2 2045

Husky Union Building Student Life 103.9 2043

IMA Building Student Life 31.7 2030

Radford Court Apartments Student Life 31.6 2032

Nordheim Court Student Life 20.8 2033

Bothell Student Center Student Life 17.3 2046

Ethnic Cultural Center Student Life 12.9 2043

UW Tacoma YMCA Student Life 11.8 2046

Other Student Life Student Life 28.9 various

Subtotal Student Life 651.1

UW Tower Academic Support 105.4 2037 0 0

Cobb Building Academic Support 32.9 2045 0 0

HR Payroll Modernization Academic Support 25.0 n/a 0 0

West Campus Utility Plant - Academic Support 21.3 2047 0 0

4225 Roosevelt Academic Support 16.4 2029 0 0

4545 Building Academic Support 15.1 2024 0 0

Other Academic Support Academic Support 35.7 various 0 0

Subtotal Academic Support 251.8

Husky Stadium Athletics 226.3 2045

Husky Ballpark Athletics 11.6 2045

Other Athletics Athletics 6.5 various

Subtotal Athletics 244.3

Available Proceeds - Unallocated 141.0

Total University Outstanding Debt 2,384.3

(1) Will not exactly match ILP balances due to bond premiums and use of the CAP

Outstanding External Debt (in millions)

% by Purpose

100%

Long Term Credit Rating: Aaa/AA+

Internal Lending Rate: 4.50%

Weighted Average Cost of Capital: 3.43%

Unallocated, 6%

Athletics, 10%

Academic Support,

11%

Student Life, 27%

UW Medicine, 31%

Instruction and

Research, 15%

Monthly Debt ReportAs of 11/30/2016

F–6.1/201-17 1/12/17

Page 2 of 2

Project Information

Funding in $ Millions Total GSF New GSF O&M Previous State Debt Donor Local Other

Campus Wide Planning Targets: 2,425$ 2,000,000 $100 $250 $425 $450 $600 $600

STUDENT EXPERIENCE

Improving the Learning Environment

1 Classroom Improvements (6-year plan) 30$ 60,000 - - - - - - 30 -

2 Population Health Education Facility (T-Wing addition) 94$ 120,000 120,000 1.5 1 60 - 23 10 -

3 T-Wing Renovation Phase 2 (pre-design) 2$ 150,000 - - - 2 - - - -

4 UW Library Storage / Repurpose on-campus space 15$ 35,000 13,000 0.2 - - 10 - 5 -

5 Schmitz Hall Improvements 15$ 80,000 - - - - - - 15 -

6 Evans School - Parrington Hall Remodel 20$ 59,000 - - - 10 - 10 - -

7 Foster School of Business - MacKenzie Hall Replacement 65$ 90,000 25,000 0.3 - - - 65 - -

8 Miller Hall Renovation (pre-design / design) 4$ 72,500 - - - 5 - - - -

9 Anderson Hall Renovation (design) 3$ 33,500 - - - 2 - - - -

105 130,000 130,000 1.6 42 - - 64 - -

150

Accommodating Growth

10 Computer Science & Engineering Building 2

11 College of Engineering - Interdisciplinary Education & Research 200,000 50,000 0.9 - 50 - 50 50 -

12 UW Bothell Phase 4 - Academic STEM Building 75$ 105,000 105,000 1.3 1 54 20 - - -

13 UW Bothell Campus Development - Add'l. Academic Space 30$ 50,000 50,000 0.6 - - 30 - - -

14 UW Tacoma Phase 4 - Academic Building 35$ 60,000 60,000 0.7 - 30 5 - - -

15 UW Tacoma Campus Development - Add'l. Academic Space 20$ 54,000 54,000 0.7 - - 10 - 10 -

Providing Quality Student Housing

16 Student Housing - North Campus Phase 4b 140$ 355,000 150,000 1.1 - - 65 - 75 -

17 UW Bothell Housing - Student Housing & Dining 50$ 125,000 125,000 0.9 - - 40 - 10 -

18 UW Tacoma - Student Housing - Court 17 Acquisition 24$ 107,000 65,000 - - - 19 - 5 -

19 UW Tacoma Housing - Private Development 35$ n/a n/a - - - - - - 35

subtotal: 912$ INNOVATION MINDSET

Leveraging Interdisciplinary Strengths

20 Population Health Sciences Building 230$ 300,000 212,000 2.6 - 20 - 210 - -

21 UW Medicine - South Lake Union Phase 3.3 197$ 262,000 262,000 4.5 - - 100 48 49 -

22 UW Medicine - Harborview Hall Lease -$ - - - - - - - - -

23 College of Arts & Sciences - Kincaid Hall Backfill 15$ 85,000 - - - - - - 15 -

Developing an Innovation District

24 Center for Advanced Materials and Clean Energy Technologies 168$ 172,000 172,000 - 9 20 20 30 - 89

25 Industry District Partnership Lab Development 300$ 350,000 350,000 - - - - - - 300

subtotal: 910$

PUBLIC AS A PHILOSOPHYSharing with the Community

26 Burke Museum 79$ 102,000 34,000 1.1 55 24 - - - -

27 Intellectual House Phase 2 8$ 8,200 8,200 0.1 - - - 8 - -

28 Burke Gilman Trail Improvements - Phase 3 16$ - - - - - - - - 16

Improving the Public Realm

29 West Campus Park 25$ - - - - - - - - 25

30 Waterfront Improvements in South Campus & the Cut 10$ - - - - - - 5 5 -

31 UW Tacoma - Soil Remediation 7$ - - - - 6 - - - -

subtotal: 145$

Project Budget

Project Funding

Approved 9/8/16

One Capital Plan (2017-2023)

$

$

ATTACHMENT 2F–6.2/201-17 1/12/17

Page 1 of 2

Project Information

Funding in $ Millions Total GSF New GSF O&M Previous State Debt Donor Local OtherProject Budget

Project Funding

Approved 9/8/16

One Capital Plan (2017-2023)

TRANSFORMING ADMINISTRATION

Consolidating to Make Room for Growth

32 University District Development at Sound Transit 150$ 200,000 200,000 2.4 - - 120 - 30 -

32 UW Medicine - South Lake Union Rosen Remodel 6$ 60,375 - - - - - - 6 -

34 UW Seattle - Parking garage(s) - Add'l. 500 Spaces 30$ - - tbd - - 24 - 6 -

35 UW Bothell - Parking Garage 25$ - - - - - - - - 25

Addressing Critical Renewal

36 UW Medicine IT Core Applications and Infrastructure 74$ - - - - - - - 74 -

37 Enterprise Information Systems (financial system) 100$ - - - - - 50 - 50 -

38 UW Medicine - Core Research Facilities 12$ 11,000 - - - - - - 12 -

39 Seismic Improvements (6-year plan) 55$ 200,000 - - - 55 - - - -

40 Fuel Switching / Power Plant Upgrade 150$ - - - - - - - - 150

41 Minor Capital Repair 208$ - - - - - - - 208 -

42 UW Seattle - Parking lot improvements (6-year plan) 14$ - - - - - 11 - 3 -

subtotals: 824$

Totals: 2,791$ 3,636,575 2,185,200 20$ $108 338$ 524$ 513$ 668$ 640$

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

→ establish project budget and manage to the plan

ATTACHMENT 3F–6.3/201-17 1/12/17

Page 1 of 1

Project Name

Budget Forecast Total SpendFunding

CommittedTarget Forecast Budget Funding Schedule Safety

HR Payroll Modernization$75.90 $75.90 $49.00 $75.90 2/14 6/17

n/a

*

NanoEngineering and Sciences BuildingZGF / Hoffman $87.80 $85.20 $51.80 $67.20 10/16 7/17 $6.95 13.4%

*

West Campus Utility PlantMiller Hull / Mortensen $44.20 $44.20 $37.95 $44.20 1/17 1/17 $6.22 16.4%

*

Animal Research and Care FacilityZGF / Skanska $123.50 $142.00 $105.67 $123.60 4/17 4/17 $13.68 12.9%

*

ARCF/ARCF/WCUP Utlity ProjectZGF / Skanska $8.58 $8.58 $8.58 $8.58 4/17 4/17

*

UWMC Expansion Phase II NBBJ / Mortenson $186.30 $198.70 $129.57 $140.10 5/17 7/18 $27.08 20.9%

*

Fluke Hall Renovation HDR / Hoffman $37.00 $36.70 $16.40 $31.50 7/17 8/17 $1.05 6.4%

*

UW Medicine South Lake Union 3.2Vulcan / Perkins & Will / Lease Crutcher Lewis $143.00 $149.40 $20.30 $143.00 9/17 6/18

n/a

Tacoma Urban Solutions Center Miller Hull / Mortensen $28.00 $26.50 $14.05 $26.50 9/17 4/17 $0.60 4.3%

*

GIX Tenant ImprovementsWright Runstad $20.99 $20.99 $2.50 $20.99 9/17 9/17

n/a

*

UWMC ED East Expansion LMN / Skanska $13.80 $13.80 $0.77 $2.51 3/18 3/18 $0.02 2.8%

*

North Campus Housing Phase 4aKieran Timberlake / W.G. Clark $240.00 $241.10 $36.54 $240.70 6/18 6/18 $7.77 21.3%

*

Life Sciences BuildingPerkins & Will / Skanska $164.80 $163.10 $21.80 $164.80 7/18 7/18 $0.98 4.5%

*

Computer Science and Engineering Exp.LMN Architects / Mortensen $105.50 $105.50 $7.12 $33.70 12/18 12/18 $0.09 1.2%

*

North Campus Housing Phase 4bKieran Timberlake / W.G. Clark $10.00 $9.20 $0.77 $10.20 8/19 8/19 $0.14 17.8%

*

New Burke MuseumOlsen Kundig / Skanska $79.00 $79.00 $12.80 $58.30 9/19 9/19 $1.05 8.2%

Totals $1,368.37 $1,399.87 $515.64 $1,191.78 $65.62 13%

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

ATTACHMENT 4F–6.4/201-17 1/12/17