Presentation to SUNY PPAA

2012 Summer Conferenceby the

State University Construction FundJuly 19, 2012

Today’s Discussion:

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• SUNY’s Capital Program

• Capital Project Costs

• Campus Access to Project Health Sheets

• Updates on OFPC and Safety Round Table

• Highlights of Capital Projects in Construction

SUNY Capital Program Summary

Program Present On# of

Bldgs

Gross Square Feet (1)

Average Age

Population Served

Funded By/Primary Financing Mechanism

Projects Managed By

State-Operated and Statutory Educational

Facilities

34 Campuses 1,839 55M 44.6 Over 220,000 students

State / PIT (2) Bonds sold through DASNY

SUNY / SUCF

State-Operated Hospitals

3 Campuses 17 2.5M 25.0 Over 1,000,000 Patients Annually

State / PIT Bonds sold through DASNY, Debt Service is Self-

Funded

SUNY / SUCF

State-Operated Residence Halls

26 Campuses 467 19.3M 34.7 Over 72,000 Students

Revenue Bonds sold through DASNY, Debt Service is Self-

Funded

DASNY/SUNY

Community Colleges

30 Colleges 544 18.8M 42.0 Over 240,000Students

50% State (PIT Bonds for State Share) / 50% Local

College/Local Sponsor

Total - 2,867 95.6 36.5 - - -

(1) GSF does not include Roads/Parking or Athletic Fields(2) PIT – Personal Income Tax

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Size of SUNY Relative to NYS Building Assets(Excluding Infrastructure and Land)

NYS1005552%

SUNY635733%

CUNY296115%

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Design and Construction Volume Across all Four Programs as of 3/31/12:

253 Projects in Design with budget of $2.4B

631 Projects in Construction with budget of $4.1B

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Impact of the SUNY Capital Program on the Construction Industry

• The extensive and geographically diverse network of facilities across NY provides a built-in framework for promoting NY’s economic development

• Public work is the primary driver of the construction market

• Supports the vertical segment of the construction industry

• 94% of SUNY Capital Program contracts awarded are to New York State firms

• 2011-12 SFY disbursements of $1,157M for all four programs combined projected to have created nearly 10,000 estimated direct and indirect jobs

• Employs multiple construction trades

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Recent Events Related to Capital:• SUNY is at the end of its current 5 year plan

• SUNY faced with continuous facility renewal requirements

• NYSUNY 2020 Challenge Grant ProgramPhase I ($80M / $60M) & Phase II ($30M / $30M)

• NY Works Accelerated Projects – 1st Quarter 2012/13

• No new bond funding for Residential and Hospital Facilities

• Bond Cap Limitations

• Creation of the NY Works Task Force

• Input from Regional Economic Development Councils

NY Works Task Force: Creation & Mission

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Created by the 2012-13 Enacted Budget

Comprised of 15 members appointed by the Governor, with six members appointed with consent/advice of Legislative leaders

Oversees and coordinates capital plans across all NYS agencies and authorities

Included creation of an Implementation Council comprised of various relevant agency and authority commissioners

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NY Works Task Force: Goals• Develop a coordinated capital infrastructure plan among state agencies and

authorities that is consistent with the regional economic development plans

• Recommend prioritization of capital infrastructure projects and allocation of resources

• Provide recommendations to facilitate expedited permit approvals, regulatory approvals and other such actions to advance priority projects

• Recommend financing options (i.e., state supported debt and federal funding)

• Advise state agencies and authorities on methods of procurement and contracting.

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NY Works Task Force: Current Activities• Implementation Council’s first meeting held on June 20th

• Task Force Survey data to be compiled on capital planning processes at each organization – what’s being done now, how the information is used to prioritize projects, and who makes the decisions

• Survey to be summarized by July 16th

• Task Force activities expected to support a 10 year rolling capital plan

• Task Force looking for initiatives that ‘move the needle’

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How the SUNY Capital Program succeeds:planning + predictable multi-year funding =

RESULTS

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SUNY’s Next Plan: Multi-Year Request for 2013/14 - 2018/19

1. Educational Facilities – Developed using Facility Master Plans

2. Hospitals – Developed using business plans

3. Residential Facilities – Developed using business plans

4. Community Colleges – Developed using Facility Master Plans, limited by each sponsor’s ability to pay its 50% share

To the extent possible, align with goals of the Regional Economic Development Councils

Centralized Themes of the TenRegional Economic Development Councils:

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1. Leverage and Maximize Existing ResourcesUse existing resources to either attain public-private partnerships or to entice outside businesses and workers to the region.

2. InfrastructureInvest in and improve existing infrastructure, from roads/waterways to cellular and high speed internet.

3. Education Utilize available educational resources (K-12 and public/private higher education) to meet the needs of the larger workforce and to bring in outside businesses.

4. Reduce Export/Increase Import of New York State WorkforceTake steps to create a more desirable destination for workers from outside New York State and keep New York workers here.

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• Total value of bids taken for this period is $416,122,000

• Bids are 7.9% below established budgets

• Bids are 4.1% above median budgets

• 42 bids have been taken

FY 2012 Bid Results since February

2008 2009 2010 2011 2012

5.6

8.6 8.9 8.67.3

Number of Bidders, statewide average

• Average number of bidders per project statewide is 7.3, a decline based primarily Downstate

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Regional Results Breakdown (1)

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Projects by Region (count)

South

Central

West

East

216182.25

52%51007.62

412%

48990.961

12%

99941.3924%

Volume by Region (budget x 1000)

South

Central

West

East

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Regional Results Breakdown (2)

• South (Downstate) Region: $216.2 million bidsLvB -7.0%, MvB +9.9%, 11.6 bids each project (17.6 last

year)

• Central Region: $51 million bidsLvB -7.2%, MvB -1%, 5.6 bids each project

• West Region: $49 million bidsLvB -13.1%, MvB -2.9%, 6 bids each project

• East Region: $99.9 million bidsLvB -7.5%, MvB -2.2%, 6 bids each project

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Current Period Comparison to FY 2011

Comparison of Bid Ranges, ‘11 to Feb12 vs. Feb12 to Current:

– ‘11 to Feb12 Statewide: LvB -6.2%, MvB + 2.5% = Range of 8.7%

– Feb12 to Current Statewide: LvB -7.9%, MvB + 4.1% = Range of 12%

Why the Expansion of Bid Range?

– Greater volatility in energy and commodity markets

– Contractor bid strategies being experimented, refined

– Sampling bias towards the more volatile Downstate construction market

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What Did the Bid Results tell us?• The thinning of the construction market, and its contractors, is accelerating

in New York State.

• Some contractors are developing their competitive edge in an historic business model – more on this in a few slides…

• Increases in labor costs, while small, are being passed on to owners. Material costs, however, are trending down, and the net differences are notable.

• The Downstate “cutthroat competition” continues and has spread to specific trades elsewhere. Beware the desperate bidder – don’t spend your savings.

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Where are we going?

• Global manufacturing is declining in virtually every sector and location.

• Employment growth is statistically static before consideration of a shrinking workforce.

• Old Wall Street adage:

“Capital goes where it is welcome,

and stays where it is well treated.”

Baltic Dry Index, 30 months

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Where are we going?• Commodity prices are beginning to suggest global deflation.

• The US Dollar has experienced strength compared to the Euro, driving commodity

costs down. This may be temporary.

• Global currency risks force a trend to hard assets. Where do you hide?

Copper

Aluminum

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Where are we going?• Lower energy costs may not be

sustainable in the medium and long term.

• Supply and demand still rules. A reduction energy and materials demand has influenced prices.

Natural Gas

Ethanol

Crude Oil (WTI)

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Bids for Downstate’s NAB

• New building with 8 stories, +/- 120,000 sf; Mix of labs, classrooms, offices, simulators, electrical infrastructure for the campus; $78.7 million budget

• Low bid $68 million; median $79.5; high $96.6, with 13 total bidders

1 2 3 4 5 6 7 8 9 10 11 12 13

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

100,000,000

• SUCF “would have been” the 7th ranked bidder

• Low bid was $10.7 million below the SUCF budget. Why?

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Was This a Good Bid?• Three low bidders utilized an “old-fashioned” strategy to assemble their

bids – self-performance, or working as a true general contractor

• This low bidder will be performing all concrete work with his own labor and equipment, and has captive subs for steel and mechanical trades

• By eliminating the additional level of markup for these trades, the contractor allows a lower bid; but also accepts the potential for significant added risk

• Put another way, the GC performs work for a lower cost than a specialty contractor would be willing or able to do

• Not every bidder has the business skill or resources to work in this manner25

And This Means…

• From our POV, low price to do the job is always a good thing, but….

• Risk on the project is almost never completely isolated.

• Recovery of bid savings is prudent only after a significant part of the project has shown financial success.

• Don’t lose good efforts made to save money on a project. Saving is always a good idea!

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CPMS&

Campus Access to Project Health Sheets

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CPMS• Our Capital Program Management System (CPMS) will administer the Fund’s

multi-billion dollar capital improvement program.

• CPMS applications will be utilized by Fund’s planning, design, construction, and financial professionals

• CPMS will provide shared access to real-time information on scheduling, budget and cost management, and forecasting in a format tailored to the unique management needs of each business.

• The targeted “go live” date for user operation is Fall 2012.

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Get Online:Campuses can view their own campus Project Health Sheets via our website www.SUCF.SUNY.edu under the Project Activity tab.

Sign up:

1. Email SUCF Design Coordinator, RD, or AD to request access2. Provide names and email addresses of those needing access3. An e-mail is generated inviting user to join and assigns a temporary password4. A login screen directs user to campus-specific Project Health Sheets

Access the Project Health Sheets Using:

• Any computer using your account on the SUCF Website• iOS (iPhone or iPad)• Android• Blackberry• Windows Phone

Campus Access to Project Health Sheets

OFPC

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Safety Round TableUpdates

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Fire Safety During Construction and Demolition

NYS Fire Code, Chapter 14

NFPA 241Standard for Safeguarding Construction, Alteration, and Demolition Operations

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Construction Managers & Site Representatives are:• On-site, inspecting work• Ensuring compliance with NYSFC

Weekly Inspection required by NFPA 241 • Checklist meets required documentation• Serve as an educational tool for the Contractor

Weekly Inspections

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Safety Round Table

Round table group included representatives from:• SUNY• Contractors• Construction Managers• Fund

Group met 3 times to seek consensus on safety requirements:• General requirements • Site-specific safety plans• Pre-activity requirements

Finalized, revised documents anticipated by Fall 2012.37

Project Highlights

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Downstate's academic programs and national accreditation have opened the way for the establishment of the School of Public Health and growth in its other programs. Existing campus facilities are presently fully occupied and new program space is needed to meet the campus’s growth. Additionally, surge space is needed to relocate existing campus facilities to be able to rehabilitate these existing spaces. This project will construct new space that will include but not be limited to simulation centers, laboratories, classrooms, administrative spaces, and other associated spaces.

Health Science Center at Brooklyn: New Academic Building

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Brockport: New Academic BuildingThis strategic initiative has a total project value of $29M. At 60,000 gsf, the new building will house the Humanities and a 200-seat auditorium with a vertically-operated acoustic partition wall. The exterior uses familiar materials such as brick and large glass expanses, plus more contemporary features such as zinc panels and a sunscreen. The project will meet LEED Silver and will include many sustainable features and an extensive landscape with rain gardens and roof drainage routing through swales, storm water planters and a pond as a bio-retention area. The construction contract was awarded in June 2012. 40

Maritime: New Academic Building

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This Project consists of the following: construction of a three-story New Academic Building; construction of foundation system and utility connections for the New Academic Building; associated site work and landscaping; relocation of the Campus Loop Road; site utilities; and new sheet pile sea wall to accommodate the construction of the New Academic Building. The building is skinned with a granite rain screen, which is part of the campus material vocabulary initially derived from the Fort. Construction award date was February 2011, with anticipated completion by August 2013.

Farmingdale: School of BusinessThis project will construct a new academic building to house various departments of the School of Business. The building’s state-of-the-art design allows for the most up-to-date teaching pedagogy and methodologies needed for the success of the Farmingdale School of Business and SUNY as a whole. The building is designed in accordance with NYS Executive Order #111 and meets the minimum LEED Silver requirements for new buildings. The construction award is scheduled for September 2012. 42

Plattsburgh: School of BusinessThe project will construct a new Building to accommodate the Schools of Business, Economics, and Computer Sciences' classroom and office spaces currently located in Redkay Hall. This project has been designed to achieve LEED Silver Certification. Building highlights include a roof garden accessible by all building users and a fully-flexible computer science lab teaching room. Estimated construction completion is late 2012.

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Albany: School of BusinessThis project will construct a new 95,000 GSF Business School. Work includes concrete foundations, steel superstructure, precast cladding, curtain wall, interior finishes, mechanical, electrical, and plumbing systems, and related site infrastructure, landscaping and amenities. The building will be connected to the existing Campus Podium by a new tunnel. Construction contract was awarded in January 2011, with anticipated completion by August 2013.

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Potsdam: Performing Arts BuildingThis project will provide a new building to house the College’s Theater and Dance Department. The building boasts an unusual roof line and will include a proscenium theater, black box theater, large dance studio, all corresponding support spaces, additional performance studios, scene and costume shops, food service, classrooms and faculty offices. The construction contract was awarded in March 2011 with anticipated completion by December 2013.

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Fredonia: Renovate Science BuildingThe new 82,000 gsf Science Technology Building will accommodate classrooms, lecture halls, research and instructional laboratories for academic programs along with administrative, support, and gathering spaces. This three-story building has a connecting link to the adjacent Houghton Hall along with a new greenhouse. The building has been designed to incorporate features of sustainable architecture and will meet the requirements for LEED silver certification. The construction contract was awarded in June 2011, with anticipated completion by February 2014. 46

Buffalo College: Renovate Science Building

The project's first phase of work involves a 100,000 square foot addition to house teaching laboratories for all disciplines and an atrium connecting the addition to the existing Building. This project involves demolition of a large classroom and temporary relocation of the Greenhouse and will provide new building infrastructure, energy efficient equipment, and state of the art teaching laboratories. This is a LEED Project. Construction contract was awarded in November 2009, with anticipated completion by October 2012.

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Buffalo College: Technology BuildingThe project will construct a new 80,000 gsf three-story technology center with new labs capable of both teaching and research, lean production, materials testing, environment and information technologies. The Technology Building will house the departments of technology and computer information systems. This project is designed to comply with LEED silver certification. The Construction contract was awarded in April 2011, with completion estimated to be June 2013.

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Questions