Background Since 1999, Supplemental Severance Tax Bond (SSTBs) - - PowerPoint PPT Presentation

Background

• Since 1999, Supplemental Severance Tax Bond (SSTBs) proceeds have been the principal

source of funding for the Public School Capital Outlay Council (PSCOC) for Deficiencies Correction and then the current Standards‐based process. The SSTB as a source was enacted as a result of the Zuni Lawsuit.

• PSCOC programs funded annually are: SB‐9 (a state match for capital asset purchases,

f ilit i t & t ti ) @ 13% L A i t @ 7% ( i il tili d b facility maintenance & construction) @ 13%, Lease Assistance @ 7% (primarily utilized by charter schools) & 75% Public School Construction. PSFA’s operating & school district master planning awards are also funded from SSTBs.

SSTBs Uses by PSCOC in FY12

• Since 1999, over $2 billion of SSTBs

Other Construction 75%

SSTBs Uses by PSCOC in FY12

($148.7M)

Since 1999, over $2 billion of SSTBs have been allocated to PSCOC programs.

Lease Assistance 7% PSFA Operating 4% Other 1% All financial information contained is sourced from monthly reports of the PSCOC. Projections and estimates are prepared by staff of the PSCOC indicated with an asterisk (*).

PSFA presentation to the Board of Finance ‐ January 18, 2012

SB‐9 13% 7%

SSTB Balances

Construction

• The majority of the balance of proceeds

($470M) for PSCOC projects sold through June

2011 Awards $54M Certified but Unissued for 2011 P j t 2008

Prior Year Awards/Uses $20.3

p j g 30, 2011 are for the more recent award years.

• Are all the 2008, 2009 & 2010 projects

expected to be under construction soon?

2011 Projects $42.3M 2008 Awards $82.3M

• Most projects, yes. Some, no. PSFA is in

the process of identifying projects whose long construction horizon may allow proceeds to be reallocated to other

2010 Awards $217.5M 2009 Awards $94.7M

proceeds to be reallocated to other projects that are more “ready to go”.

PSFA presentation to the Board of Finance ‐ January 18, 2012

Two Phase Award Process

Construction

• PSCOC employs a two‐phase approach to awarding funds :

Design (Phase 1) and Construction (Phase 2).

• At Design Awards, the PSCOC Certifies to the Board of Finance the need to sell SSTBs for

both the Phase 1 and Phase 2. After the bonds are sold, they are budgeted to the Fund.

PSCOC Design PSCOC Design District District School District State / PSFA PSCOC Design Award PSCOC Design Award District Procurement District Procurement Construction Award Construction Award District Procurement District Procurement School District Purchase Order State / PSFA Purchase Order School District Purchase Order State / PSFA Purchase Order

• Avg. Phase Duration: 12 Months.*
• Avg. Phase Duration: 18 Months.*

Phase 1: Phase 2:

• Projects typically commence construction soon after the design work is complete.

But not always.

• Three factors that can prolong construction are:
• The size of a project (larger projects take longer)
• Multiple phase projects

PSFA presentation to the Board of Finance ‐ January 18, 2012

• District funding difficulties / failed bond elections

Two Phase Award Impacts

Construction

• Percent of 2010 awards committed after 15 months (avg.): 84%.
• Percent of phase award expended after 15 months (avg.): 22%.

Percent of phase award expended after 15 months (avg.): 22%. bl

• Improvement is possible

due to a Construction Information Management System with “ball‐in‐court” y type workflow processes .

PSFA presentation to the Board of Finance ‐ January 18, 2012

PSCOC Projects “in the pipe”

Construction PSCOC Active Projects

Snapshot Jan ar 12 2012

Current Active Projects Statewide: 149

Contract Balance $

Snapshot: January 12, 2012.

Current Dollars Under Contract: $455.6M.

$102M 16% Award Balance $166M 27%

• 106 (70%)* will be substantially complete within

12 months.

• 2012 Awards (scheduled for July 2012) capacity is

Expenditures $354M 57%

• 2012 Awards (scheduled for July 2012) capacity is

projected to be approximately $75 million*.

• Funding needs (and timing of needs) for

construction for existing projects are regularly

PSFA presentation to the Board of Finance ‐ January 18, 2012

g p j g y evaluated by PSFA staff.

Spending SSTB Proceeds: Outlook

Construction

• PSFA estimates $169M in

project expenditures and $215M in new contracts in $215M in new contracts in 2012.

• Large projects result in the

accumulation of funds and $215M “New” Contracts* large balances. They tend to be expended over a longer time horizon.

• Review of award &

$169M Payments*

• Review of award &

certification policies as well as statutes governing capital financing and budgeting is

PSFA presentation to the Board of Finance ‐ January 18, 2012

recommended.

Construction Contract Schedule

Construction

1 Year 2 Years KEY 2012 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014 Q1 Q2 New Construction Contra TOTAL $86.8 $52.3 $62.9 $9.1 $12.8 $35.6 $14.9 $37.3 $28.9 $30.2 Project # District Project

PSCOC NEW CONSTRUCTION ENCUMBRANCE SCHEDULE (Millions)

07‐08‐80 Espanola Espanola MS East $1.0 P06‐012 Espanola Alcalde ES $7.2 P08‐003 Gadsden Gadsden HS $14.4 $14.9 $13.8 P09‐011 Central Natanni Nez $4.9 P09‐014 Clovis James Bickley ES $4.7 P09‐015 Clovis Lockwood ES $11.5 P10‐007 Las Cruces Loma Heights ES $8.1 P11‐013 Los Alamos Los Alamos MS $4.0 P11‐016 Roswell Valley View ES $5.2 P11‐017 Roswell Berrendo ES $6.4 P11‐018 Roswell Military Heights ES $4.8 P11‐019 Roswell El Capitan ES $11.0 P12‐014 West Las Vegas Union ES $0.9 P12‐015 Rio Rancho Colinas del Norte ES $1.6 P12‐016 Rio Rancho Vista Grande ES $0.9 C10‐001 NMSD NMSD $5.9 C10‐002 NMSBVI NMSBVI $5.5 P11‐002 Alamogordo Yucca ES New School $6.5 P11‐005 Gallup Washington ES $6.8 P11‐015 Los Lunas Los Lunas HS $25.0 $24.6 P12‐006 Espanola Velarde ES $2.6 P11‐004 Gallup Juan de Onate ES $8.5 P11‐007 Gallup Thoreau ES $9.5 P11‐011 Las Cruces Las Cruces HS $13.1 $28.1 P12‐001 Albuquerque Douglas MacArthur ES $1.8 P12‐002 Albuquerque McKinley MS $4.0 P12‐003 Albuquerque Chaparral ES $7.3 $ P12‐004 Belen Family School $1.6 P12‐009 Estancia Estancia MS $4.4 P12‐010 Santa Rosa Rita Marquez ES $4.2 P12‐011 Socorro San Antonio ES $2.2 P12‐012 T or C T or C ES $4.5 P12‐013 West Las Vegas WLV Family Partnership MHS $1.8 P12‐008 Espanola E.T.S. Fairview ES $9.1 P11‐001 Alamogordo Yucca ES $3.7 P11‐003 Cobre Bayard ES $5.3 l $

PSFA presentation to the Board of Finance ‐ January 18, 2012

P11‐014 Los Alamos Aspen ES $3.8 P11‐008 Gallup Jefferson ES $8.8 P11‐009 Gallup Lincoln ES $8.4 P12‐005 Bernalillo Bernalillo HS $18.4 P09‐022 Raton New Raton ES $12.7 P10‐002 Eunice Caton MS $0.8 P11‐006 Gallup Church Rock $8.0 P11‐010 Gallup Roosevelt ES $8.4

PSCOC Project Expenditures

Construction

• The peak expenditure years resulted from high oil and gas (O&G) prices of the
• times. More subdued expenditures in 2009 and going forward are reflective of

O&G prices coming down O&G prices coming down.

• Recent SSTB capacity

forecasts point to annual project expenditures for

$400

PSCOC Project Expenditures (millions) project expenditures for 2012 – 2015 at $127M.*

• The amount of PSCOC

awards estimated to

$250 $300 $350 $400

340.0

strict unds

maintain the statewide average Facility Condition at par is $134M.* Going forward, modest

88 6 218.3 238.3 146.1 150.7 116.0 169.0 $ $100 $150 $200

Dis Fu

forward, modest improvement in school facilities will be the norm.

• SSTB sales precede budgeting of funds, which allow

24.2 88.6 $0 $50 2005 2006 2007 2008 2009 2010 2011 2012* PSFA presentation to the Board of Finance ‐ January 18, 2012

SSTB sales precede budgeting of funds, which allow new contracts to be entered into, followed by project expenditures, then drawdown of SSTB proceeds.