F–3 STANDING COMMITTEES Finance and Asset Management Committee

F–3/206-18 6/7/18

Finance and Capital Report INFORMATION This item is being presented for information only. BACKGROUND This item is a standing monthly agenda item. Attachments 1. Active Capital Projects Summary as of May 18, 2018 2. Business Equity Scorecard as of May 18, 2018 3. Monthly Debt Report – June 2018

Active Capital Projects Summary

as of May 18, 2018

(1)

(2)

(3)

(4)

Project General Contractor buyout largely complete and business equity goals cannot be met with remaining spend Two minor safety incidents occurred on the project this past month resulting in the safety health metric trending down. Project budget and funding will be reconciled during demo and site improvement phase Forecasted permit review times from the City are longer than anticipated.

Project Name Financial Details Schedule Women & Minority

Business Equity* Project Health Trending

Budget Forecast Funding

Committed Target Forecast Committed Utilization Budget Funding Schedule Safety

Business Equity

NCH Phase IV(a): McCarty,

Madrona, & Willow Halls Kieran Timberlake/WG Clark $253.00 $252.62 $253.00 7/18 7/18 $70.68 33.9%

Life Sciences Building Perkins+Will/Skanska $171.45 $167.94 $171.56 7/18 7/18 $5.96 3.8%

*

*

*

*

(1)

SOM South Lake Union 3.2 Perkins+Will/Sellen $144.98 $144.47 $144.98 11/18 7/18 N/A N/A

*

*

*

(2)

*

N/A

UWMC ED East Extension Salus Architecture /Skanska $15.41 $15.41 $15.41 10/18 10/18 $1.16 9.4%

Bill and Melinda Gates Center for

CSE LMN Architects/Mortenson $105.50 $105.71 $105.50 12/18 12/18 $4.64 5.1%

*

*

*

*

(1)

New Burke Museum Olson Kundig/Skanska $79.70 $80.92 $79.70 7/19 7/19 $3.32 5.3%

(3)

*

*

*

(1)

Parrington Hall Renovation $20.00 $20.00 $20.00 1/20 1/20 N/A N/A

TBD

TBD

Population Health Facility Miller Hull Partnership/LCL $230.00 $230.00 $230.00 3/20 4/20 $0.88 2.4%

*

*

(4)

*

*

Kincaid Hall Psychology

Renovation 2017-2023 $30.00 $30.00 $30.00 6/20 6/20 N/A N/A

TBD

TBD

NWH Childbirth Center $25.00 $25.00 $25.00 9/20 9/20 N/A N/A

TBD

TBD

NCH Phase IV(b): Denny Field,

Haggett & Oak Halls Kieran Timberlake/WG Clark $86.20 $86.20 $86.20 7/21 7/21 $0.03 0.4%

TBD

Foster School Expansion $70.00 $70.00 $70.00 8/21 8/21 N/A N/A

*

TBD

TBD

Totals $1,231.23 $1,228.26 $1,231.35 $86.67 15.1%

$ All Dollars in Millions *Includes OMWBE certified and self-identified Women and Minority businesses.

Targets Budget: Budget is equal to or greater than Forecast (1% Tolerance) Funding: Funding is equal to or greater than Forecast (1% Tolerance) Schedule: Forecast is equal to or sooner than Target (14 Day Tolerance) Safety: Total Recordable Incident Rate of 2.5 or lower Business Equity: On track for utilization of 10% or higher NOTES:

Legend

Meeting Target

Not Meeting Target, Plan in Place

Not Meeting Target, No recovery Plan in Place

Arrow Up Arrow Down

Improvement from Previous Month Setback from Previous Month

ATTACHMENT 1F-3.1/206-18

6/7/18 Page 1 of 1

Business Equity Scorecard

as of May 18, 2018

Project Total Commitments*

Business Equity Commitments

Total Project

Budget*

Committed

Forecast

Uncommitted

OMWBE Businesses (State-Certified Only)

Women & Minority Businesses (Certified and Self-Identified)

WBE, MBE, and SBE Businesses (Certified and Self-Identified)

Project Name

(A)

(B)

(B-A)

((B-A)/B)

(C)

(C/A)

Firms**

(D)

(D/A)

Firms**

(E)

(E/A)

Firms**

NCH Phase IV(a): McCarty, Madrona, & Willow Halls Kieran Timberlake/WG Clark

$223.29 $208.39 $223.39 $15.00 6.7% $5.55 2.7% 12 $70.68 33.9% 20 $75.27 36.1% 30

Life Sciences Building Perkins+Will/Skanska

$161.86 $156.53 $158.66 $2.13 1.3% $2.04 1.3% 16 $5.96 3.8% 29 $18.44 11.8% 62

UWMC ED East Extension Salus Architecture /Skanska

$13.38 $12.29 $13.38 $1.09 8.2% $1.14 9.3% 6 $1.16 9.4% 8 $1.30 10.5% 18

Bill and Melinda Gates Center for CSE LMN Architects/Mortenson

$93.11 $91.00 $97.23 $6.23 6.4% $1.49 1.6% 11 $4.64 5.1% 18 $20.67 22.7% 31

New Burke Museum Olson Kundig/Skanska

$70.32 $62.97 $71.47 $8.49 11.9% $1.19 1.9% 14 $3.32 5.3% 30 $8.08 12.8% 96

Population Health Facility Miller Hull Partnership/LCL

$199.00 $37.28 $199.06 $161.78 81.3% $0.72 1.9% 6 $0.88 2.4% 9 $2.15 5.8% 19

NCH Phase IV(b): Denny Field, Haggett & Oak Halls Kieran Timberlake/WG Clark

$74.89 $6.22 $74.89 $68.67 91.7% $0.02 0.3% 8 $0.03 0.4% 7 $0.79 12.7% 15

Totals

$835.85

$574.68

$838.09

$263.40

31.4%

$12.15

2.1%

39*** $86.67

15.1%

72*** $126.70

22.0%

178***

* Project Total Commitments and Budget include only costcodes that are business equity eligible, those that are not (such as sales tax) are excluded. ** Firm total is a distinct count per Project *** Bottom Line total is count of distinct firms across all projects

ATTACHMENT 2F-3.2/206-18 6/7/18

Page 1 of 1

(1) 80/20 weighting between the tax-exempt and taxable 30-year interest rates to illustrate the University's portfolio

(4) Represents a large principal payment in FY36

(3) Includes a $24.5 million upfront lease payment from South Lake Union Phase 3.2 to be paid from equity, and excludes a $23 million principal payment on the Burke Museum which was reimbursed by the State

(2) Excludes Valley Medical Center bonds, and commercial paper principal payments

Recent Events

Estimated Future Funding

External Debt Portfolio

Annual Debt Service (2)

FY 2019 Issuance for Authorized Projects (A) 100$

Estimated Additional Capacity from Debt (FY 2020-2023) 400

Total Debt Funding 500$

FY 2019-2023 (in millions)

ILP Debt, 72%

Non-ILP Debt, 28%

Long-Term Credit Rating: Aaa/AA+Internal Lending Rate: 4.50%

Weighted Average Cost of Debt: 3.48%

Monthly Debt ReportJune 2018

The University had $2,434 million of external debt outstanding as of 4/30/18. This is higher than the previous report ($2,397 million as of 2/28/2018) due to a $4 million equipment loan, $65 million in commercial paper issuances, and principal repayments of $32 million

Additionally, the University paid $1 million in principal during the month of May and will pay $15 million in June

The weighted average cost of debt is 3.48%

Between 2008 and 2013 outstanding debt grew by 15% annually. Since 2014, the annual growth rate slowed to 5%, and it is projected to grow at a rate of less than 1% through 2023

$137 million of internal funding from the CAP is excluded from the external debt portfolio

A comprehensive review of the debt capacity methodology and a revised estimate were presented in May 2018. This analysis indicated $500 million in debt capacity (roughly equal to principal expected to be repaid FY19-23)

Debt capacity estimates will be revised and presented in 2019

Additional capacity from the Capital Assets Pool is recalculated quarterly as the value of the IF changes and principal owed to the CAP is repaid

Short-term equipment financing has minimal impact on capacity

Variable, 4%

Fixed, 96%

$0

$30

$60

$90

$120

$150

$180

$210

Mill

ions

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

Maximum Annual Debt Service: $209M (3)

(4)

(A) Authorized projects include HFS Phase 4a and Life Sciences

As of May 18th, the University's estimated borrowing cost was 4.00% (1). The yield curve has flattened over the past quarter. Short end rates are higher due to the FOMC rate hike in March and long term rates are relatively unchanged. More recently, long-term interest rates have been moving higher over the past several weeks due to eased trade war concerns, good economic data and increased inflation. The benchmark 10-year treasury rate, currently 3.07%, is at its highest levels since December of 2013

$50 million of commercial paper was issued on 5/16/18 at a rate of 1.60% to fund Housing and Food Services Phase 4a and Life Sciences. With this issuance, total outstanding commercial paper is $90 million

The University plans to issue an additional $35 million in commercial paper through January 2019 to fund approved capital projects

$25 million of commercial paper will be retired in July, while the remaining $100 million will be refinanced with a long-term transaction in early 2019

As of 4/30/18

ATTACHMENT 3 F-3.3/206-18 6/7/18

Page 1 of 2

Project Purpose Balance(1) Final MaturityLife Sciences Building Instruction and Research 93.5 2049

Animal Research and Care Facilities Instruction and Research 91.5 2047

Molecular Engineering Building Instruction and Research 69.9 2043

Dempsey Hall Instruction and Research 37.3 2041

Foege Building Instruction and Research 27.7 2031

UW Bothell Phase 3 Instruction and Research 24.5 2043

William H. Gates Law School Instruction and Research 20.5 2028

AAALAC Instruction and Research 21.2 2035

Ben Hall Instruction and Research 15.4 2037

Denny Hall Instruction and Research 14.5 2046

Ocean Sciences Instruction and Research 10.2 2024

Other Instruction and Research Instruction and Research 17.5 various

Subtotal Instruction and Research 443.7

South Lake Union (Ph I, II, 3.1, & 3.2) UW Medicine 358.6 2048

UWMC Expansion UW Medicine 207.4 2046

NW Hospital UW Medicine 67.6 2033

UWMC Surgery Pavilion UW Medicine 37.0 2028

Other UW Medicine UW Medicine 18.4 various

Subtotal UW Medicine 689.0

HFS Expansion Student Life 537.7 2045

Husky Union Building Student Life 100.6 2043

IMA Building Student Life 29.2 2030

Radford Court Apartments Student Life 29.4 2032

Nordheim Court Student Life 19.4 2033

Bothell Student Center Student Life 16.8 2046

Ethnic Cultural Center Student Life 12.5 2043

UW Tacoma YMCA Student Life 11.5 2046

Other Student Life Student Life 27.0 various

Subtotal Student Life 784.1

UW Tower Academic Support 99.6 2037

HR Payroll Modernization Academic Support 31.2 n/a

Cobb Building Academic Support 31.4 2045

West Campus Utility Plant Academic Support 26.5 2047

4225 Roosevelt Academic Support 14.9 2029

4545 Building Academic Support 13.7 2024

Other Academic Support Academic Support 36.2 various

Subtotal Academic Support 253.5

Husky Stadium Athletics 221.2 2045

Husky Ballpark Athletics 11.5 2045

Other Athletics Athletics 4.9 various

Subtotal Athletics 237.6

Available Proceeds Unallocated 26.1

Total University Outstanding Debt 2,434.0

(1) Will not exactly match ILP balances reflected in the Semi-Annual ILP report due to bond premiums and use of the CAP

Projects still drawing on ILP loans

Outstanding External Debt (in millions)

% by Purpose

100%

Long-Term Credit Rating: Aaa/AA+Internal Lending Rate: 4.50%

Weighted Average Cost of Capital: 3.48%

Monthly Debt ReportJune 2018

Unallocated, 2%

Athletics, 10%

Academic Support,

10%

Student Life, 32%

UW Medicine,

28%

Instruction and

Research, 18%

F-3.3/206-18 6/7/18

Page 2 of 2