F–3 STANDING COMMITTEES Finance and Asset Management Committee

F–3/202-19 2/14/19

Finance and Capital Report INFORMATION This item is being presented for information only. BACKGROUND This item is a standing monthly agenda item. The UW Treasury Office provides a monthly debt report to the Board of Regents. A written report will appear in each month’s materials. Live reports will be given each every other month, or as requested by the Board. Attachments 1. Monthly Debt Report – February 2019 2. Active Capital Projects Summary as of January 31, 2019 3. Business Equity Scorecard as of January 18, 2019

100$ 154

Remaining Debt Capacity (FY 2020-2023) 246 Total Debt Funding 500$

(1) 80/20 weighting between the tax-exempt and taxable 30-year interest rates to illustrate the University's portfolio(2) Revision to FY18 outstanding debt to match audited financials(3) Due to commercial paper timing differences, project costs incurred in FY18 were refinanced with long-term debt FY19

FY 2019-2023 (in millions)

Authorized FY 2019 Issuance(A)

Board Approved Projects(B)

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

Weighted Average Cost of Debt: 3.53%

Recent Events As of January 17th, the University's estimated long-term borrowing cost was 3.90%(1)

On January 17th, the University sold General Revenue Bonds at a yield of 1.93% with a term of three years. Bond proceeds will be used to pay-off outstanding commercial paper and to fund a variety of campus projects

This three-year term allows the University to take advantage of lower interest rates on the short-end of the yield curve. The bonds will be remarketed in 2022

The University's credit ratings were affirmed at Aaa and AA+ by Moody's and S&P, respectively. The rating outlook from Moody's remains negative

Estimated Future Funding

A comprehensive review of the debt capacity methodology and a revised estimate were presented to the Board 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 to the Board in the Spring of 2019

Additional capacity from the Capital Assets Pool is recalculated quarterly as the value of the Invested Funds (IF) changes and principal owed to the CAP is repaid. As of 9/30/2018, the available capacity was $91 million

Short-term equipment financing has minimal impact on capacity

External Debt Portfolio (12/31/18)

ILP Debt, 76%

Non-ILP Debt, 24%

Variable, 4%

Fixed, 96%

Debt Activity (in millions)

The University had $2,383 million of external debt outstanding. This is lower than the previous report ($2,395 million as of 10/31/2018) due to principal repayments of $12 million

The weighted average cost of debt is 3.53%

Between 2008 and 2014 outstanding debt grew by 13% annually. From 2015 through 2018, the annual growth rate slowed to 5%. Debt has not materially grown since 2017 and outstanding debt is projected to remain stable through 2023

$136 million of internal funding from the CAP is excluded from the external debt portfolio

Monthly Debt ReportFebruary 2019

(A) Authorized projects include HFS Phase 4a and Life Sciences(B) Estimated. Authorized projects include Clinical Transformation and NWH Childbirth Center

ATTACHMENT 1F-3.1/202-19 2/14/19

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Project Purpose Balance (1) Final Maturity

Life Sciences Building Instruction and Research 109.0 2049

Animal Research and Care Facilities Instruction and Research 88.7 2047

Molecular Engineering Building Instruction and Research 69.3 2043

Dempsey Hall Instruction and Research 36.1 2041

Foege Building Instruction and Research 26.3 2031

UW Bothell Phase 3 Instruction and Research 24.0 2043

William H. Gates Law School Instruction and Research 20.1 2028

AAALAC Instruction and Research 20.2 2035

Ben Hall Instruction and Research 14.8 2037

Denny Hall Instruction and Research 14.3 2046

Ocean Sciences Instruction and Research 9.3 2024

Other Instruction and Research Instruction and Research 15.0 various

Subtotal Instruction and Research 447.1

South Lake Union (Ph I, II, 3.1, & 3.2) UW Medicine 345.4 2048

UWMC Expansion UW Medicine 199.6 2046

NW Hospital UW Medicine 64.2 2033

UWMC Surgery Pavilion UW Medicine 34.0 2028

Other UW Medicine UW Medicine 18.9 various

Subtotal UW Medicine 662.1

HFS Expansion Student Life 559.3 2045

Husky Union Building Student Life 97.2 2043

IMA Building Student Life 27.8 2030

Radford Court Apartments Student Life 27.9 2032

Nordheim Court Student Life 18.4 2033

Bothell Student Center Student Life 16.3 2046

Ethnic Cultural Center Student Life 12.1 2043

UW Tacoma YMCA Student Life 11.1 2046

Other Student Life Student Life 25.6 various

Subtotal Student Life 795.7

UW Tower Academic Support 95.1 2037

HR Payroll Modernization Academic Support 31.2 2027

Cobb Building Academic Support 30.6 2045

West Campus Utility Plant Academic Support 25.6 2047

4225 Roosevelt Academic Support 13.9 2029

4545 Building Academic Support 12.9 2024

Other Academic Support Academic Support 33.0 various

Subtotal Academic Support 242.3

Husky Stadium Athletics 214.6 2045

Husky Ballpark Athletics 11.2 2045

Other Athletics Athletics 4.3 various

Subtotal Athletics 230.1

Available Proceeds Unallocated 5.2

Total Outstanding Debt 2,382.5

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

Projects still drawing on ILP loans

% by Purpose

100%

Outstanding External Debt as of 12/31/2018 (in millions)

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

Weighted Average Cost of Capital: 3.53%

Unallocated, 0.2%

Athletics, 9.7%

Academic Support,

10.2%

Student Life, 33.4%

UW Medicine, 27.8%

Instruction and

Research, 18.8%

Monthly Debt ReportFebruary 2019

F-3.1/202-19 2/14/19

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Active Capital Projects Summary

as of January 31, 2019

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

Seismic Improvements - Phase 1 Schacht/Aslani Architects/CLARKCONS $17.60 $18.11 $17.60 9/19 9/19 N/A N/A

(1)

*

*

*

*

New Burke Museum Olson Kundig/Skanska $79.70 $82.74 $79.70 10/19 10/19 $3.44 5.3%

(2)

*

*

*

(3)

Kincaid Hall Psychology Renovation 2017-2023 Perkins+Will/Skanska $30.00 $33.70 $30.00 6/20 6/20 N/A N/A

(4)

*

*

*

TBD

*

Parrington Hall Renovation INTEGRUS Architecture, PS/Absher $20.00 $23.80 $19.10 1/20 7/20 $0.02 0.7%

(5)

*

*

*

TBD

*

Population Health Facility Miller Hull Partnership/LCL $230.84 $229.16 $230.00 7/20 7/20 $0.90 1.4%

*

*

(6)

*

*

Northwest Hospital Childbirth Center Zimmer Gunsul Frasca Architects/ABBOTT $25.00 $25.00 $25.00 9/20 9/20 N/A N/A

*

*

*

*

TBD

*

NCH Phase IV(b): Denny Field, Haggett & Oak Halls Kieran Timberlake/Absher $86.20 $65.50 $86.20 7/21 7/21 $0.03 0.0%

*

*

*

*

TBD

*

Foster School Expansion LMN Architects/Hoffman $70.00 $70.00 $70.00 8/21 8/21 $0.01 0.9%

*

*

*

*

TBD

*

Health Sciences Education Building Miller Hull Partnership/LCL $80.62 $80.62 $10.62 3/22 3/22 N/A N/A

*

*

*

*

TBD

*

Totals $639.96 $628.63 $569.12 $4.39 2.2% $ All Dollars in Millions *Includes OMWBE certified and self-identified Women and Minority businesses. Targets Legend Budget: Budget is equal to or greater than Forecast (1% Tolerance) Meeting Target Funding: Funding and cashflow as planned Not Meeting Target, Plan in Place Schedule: Forecast is equal to or sooner than Target (14 Day Tolerance) Not Meeting Target, No recovery Plan in Place Safety: Total Recordable Incident Rate of 2.5 or lower Business Equity: On track for utilization of 10% or higher Notes:

(1) Project scope, budget and funding require alignment. Plan in place for alignment by end of year 2018. (2) Project budget and funding will be reconciled at $82.8M with revised Project Work Plan, currently circulating for approval.

(3) Project General Contractor buyout largely complete and business equity goals cannot be met with remaining spend (4) Project budget forecast is over budget exploring possible additional funding. A $30M project can be constructed, deferring future costs to a later date. (5) Project budget forecast is over budget exploring possible additional funding. A $20M project can be constructed, deferring future costs to a later date.

ATTACHMENT 2F-3.2/202-19 2/14/19

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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**

Bill and Melinda Gates Center for CSE LMN Architects/Mortenson $93.11 $97.31 $96.88 ($0.43) -0.4% $1.49 1.5% 11 $4.64 4.8% 18 $20.99 21.6% 32

Seismic Improvements - Phase 1 Schacht/Aslani Architects/CLARKCONS $14.90 $8.90 $15.40 $6.51 42.3% $0.00 0.0% 0 $0.00 0.0% 0 $0.11 1.2% 3

New Burke Museum Olson Kundig/Skanska $70.32 $64.46 $73.14 $8.68 11.9% $1.31 2.0% 16 $3.44 5.3% 32 $8.23 12.8% 99

Kincaid Hall Psychology Renovation 2017-2023 Perkins+Will/Skanska $0.00 $0.73 $27.30 $26.57 97.3% $0.00 0.0% 0 $0.00 0.0% 0 $0.01 0.8% 1

Parrington Hall Renovation INTEGRUS Architecture, PS/Absher $16.43 $2.72 $19.39 $16.67 86.0% $0.02 0.7% 2 $0.02 0.7% 2 $0.11 4.2% 4

Population Health Facility Miller Hull Partnership/LCL $199.88 $65.02 $198.73 $133.71 67.3% $0.74 1.1% 6 $0.90 1.4% 9 $2.39 3.7% 19

Northwest Hospital Childbirth Center Zimmer Gunsul Frasca Architects/ABBOTT $21.83 $0.47 $21.83 $21.36 97.9% $0.00 0.0% 0 $0.00 0.0% 0 $0.01 2.2% 1

NCH Phase IV(b): Denny Field, Haggett & Oak Halls Kieran Timberlake/Absher $74.89 $7.96 $55.02 $47.06 85.5% $0.02 0.2% 8 $0.03 0.3% 7 $0.81 10.2% 15

Foster School Expansion LMN Architects/Hoffman $57.74 $0.99 $57.74 $56.75 98.3% $0.01 0.9% 1 $0.01 0.9% 1 $0.07 6.8% 2

Health Sciences Education Building Miller Hull Partnership/LCL $78.15 $0.91 $69.47 $68.56 98.7% $0.00 0.0% 0 $0.00 0.0% 0 $0.04 4.1% 2

Totals $627.25 $249.46 $634.90 $385.44 60.7% $3.59 1.4% 28*** $9.04 3.6% 51*** $32.76 13.1% 143***

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

Business Equity Scorecardas of January 18, 2019

ATTACHMENT 3F-3.3/202-19 2/14/19

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