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Capital Budget Context, including Long-Range Plan Development and FY2017 Preliminary Capital Plan

THEN, NOW AND FUTURE The 2017-19 Integrative Capital Plan (ICP) has assessed resource requirements and financial capacity constraints while also considering the revenue-generating and/or cost-control value of the proposed capital investments. Implicit within the ICP is a realistic implementation schedule, consideration of space allocation needs and enabling projects, and other essential impacted infrastructure (e.g., parking, transportation). Each project is assessed on:

• Advancing the University’s strategic plan (SP 3.0) and Higher Education Coordinating Commission (HECC) priorities;

• Addressing strategic investment opportunities and leveraging capital resources – particularly gifts;

• Demonstrating financial viability, including the consideration of long-term operation and maintenance costs and the useful life of the asset (life-cycle planning);

• Resolving critical fire and life safety and accessibility needs as well as compliance needs; and

• Complying with the City’s Land Development Code.

Special attention is paid to:

• Historically significant facilities and those built within the historic district to ensure fulfillment of expectations of this formal designation;

• Campus sustainability and stewardship and natural resource and energy conservation; and

• Incentivizing the development of multi-use, multi-unit facilities that create efficiencies, enhance collaboration and inspire innovation.

HISTORICAL CAPITAL INVESTMENTS Major Capital Projects (2006 – 2015) In the past 10+ years, more than 30 major capital construction projects (≥ $5 million each), totaling nearly $600M, have brought over two million gross square feet (SF) to support OSU’s teaching, research, outreach, and auxiliary efforts (see the following three figures).

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Figure 1. Major Capital Construction Projects (FY2006-2015)

Figure 2. Major Construction Locations (FY2006-2015)

Figure 3. Major Construction Expenditures (FY2006-2015)

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Funding Sources for Major Capital Projects (2009-2017) The following chart illustrates funding sources for major capital projects (over $5M) approved in past biennia. Projects within the first three biennia are complete, while 2015-17 includes both projects that are complete and projects that are in design or construction. The State Energy Loan Program (SELP) is managed by the state for energy savings investment and is repaid by Education & General (E&G) funds.

Figure 4. Sources of Funds for Major Capital Projects (2009-2017)

Capital construction over the last decade includes the following.

• Major building renovation projects (completion year in brackets) such as Sackett Hall Energy Savings [2006], Apperson Hall (now Kearney Hall) [2009], Nash Hall [2012], Joyce Collin Furman Hall [2013], MU East Wing Remodel [2015], Strand Agricultural Hall [2015], and Cascade Hall (Corvallis) [2015] have increased accessibility, seismic and other safety aspects, durability and usefulness of iconic OSU buildings. These projects incorporated energy efficiency upgrades and sustainability features and revitalized and modernized over 400,000 SF of OSU space in the campus core.

• New construction projects for academic programs such as Kelley Engineering Center [2006], Vet Med Large Animal Hospital [2008], Linus Pauling Science Center [2011], Hallie E. Ford Center for Healthy Children and Families [2012], Oldfield Animal Teaching Facility [2013], Hogg Animal Metabolism Laboratory [2014], Austin Hall [2015], and the Learning Innovation Center [2015] created over 600,000 SF of new and innovative teaching, research, administrative and program space.

• New construction projects that enhance the student experience, including student residence space (Tebeau Hall [2014]) and student program space (International Living-

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

2009-11 2011-13 2013-15 2015-17

State-Paid Bonds XI-G, XI-Q, Lottery Gift Funds OSU-Paid E&G Debt OSU-Paid Auxiliary Debt SELP

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Learning Center [2012], Student Legacy Park [2012], Beth Ray Center for Academic Support [2013], Student Experience Center [2014], Native American Longhouse Eena Haws [2014], Lonnie B. Harris Black Cultural Center [2014], Centro Cultural César Chávez [2014], and Asian & Pacific Cultural Center [2015]), brought over 600,000 SF of invaluable student program space to improve the quality and variety of the student experience.

• Renovation and new construction projects for athletics also substantially increased the profile and quality of OSU Athletics programs. These projects include Gill Coliseum [2007], Phase II of Reser Stadium [2008], Sports Performance Center Phase I [2008] and Phase II (Basketball Practice Facility) [2013], and Goss Stadium Expansion [2009].

• New infrastructure projects included the Energy Center [2011]. Minor Capital Projects (2006-2015) OSU’s physical facilities and assets serve students, faculty and citizens and need to be adequately maintained for future generations. Building subsystems and campus infrastructure systems that have exceeded their useful life may be replaced or renewed with state-issued deferred maintenance bond sales and allocations. In 2015, the Higher Education Coordinating Commission (HECC) recommended changing the project name from ‘Capital Repair and Renewal’ (CR&R) to ‘Capital Improvement and Renewal’ (CIR).

Figure 5. Deferred Maintenance and “Capital Improvement and Renewal” Funding (2005-2015)

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2015-17 CAPITAL INVESTMENTS (FY2016-17) The following tables include current major and minor capital investments for 2015-17. Major Capital Projects

Program Description Total State-Paid State Bonds Gifts OSU Funds OSU-Paid Revenue Bonds

Minor Capital - Building and Infrastructure Renewal

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Minor Capital Projects OSU estimates funding of $22M-24M from the 2015-17 legislatively-approved “Capital Improvement and Renewal” authorization of $65M. Below are the planned projects at $24M, which is subject to change, as contingencies emerge. Building, mechanical and electrical systems, utilities, site work, fire and life safety system investments, and renewal requests are priorities established by Facilities Services, Environmental Health and Safety, Information Services, the Research Office, schools, colleges and units. Program investments and renewal requests reflect priorities of schools, colleges, units and the Classroom Improvement Working Group (CIWG). Italics denote accessibility/ADA improvements.

Program/Project Title Planned Budget

Reserve $750,000

Building Investment and Renewal $4,240,000

Bexell Hall Accessibility Improvements, Cordley Hall Roof, Cordley Hall Window Replacement, Gilbert 124/224 Classroom Accessibility Improvements, Graf Hall Accessibility Improvements. Minor seismic upgrades.

Mechanical and Electrical Systems Investment and Renewal $5,410,000

Campus Energy Metering, Carbon Smart Program Energy Efficiency Measures, Information Systems, Infrastructure Improvements, Milam Hall Auditorium Restroom, MU Entrance ADA Improvements (Mech/Elec/Alarms Components), Nash Freight Elevator Replacement, Standby Power Program

Utilities and Site Work Investment and Renewal $3,380,000

Electrical Grid Improvements, Sanitary Utility Improvements, Site Accessibility Improvements, Steam Distribution/Utility Tunnel Improvements, Storm Utility Improvements, Street Improvements, Transportation Improvements, Water Utility Improvements

Fire and Life Safety Systems Investment and Renewal $1,600,000

Kerr Fire Alarms (replace & add strobes), Milam Hall Fire Alarm (strobes)

Program Investment and Renewal $8,620,000

Bexell Hall Renovation for CLA, Classroom Modernization, Gilbert 124/224 Classroom Improvement, Gilbert Addition Teaching Lab Renovation, Graf Hall Program Improvements, HMSC Program & Infrastructure Renewal

Planned Program/Project Total $24,000,000

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TEN-YEAR OSU CAPITAL FORECAST PLAN -- Fiscal Years 2018-2027 Oregon State University’s Capital Forecast Plan is a 10-year rolling plan that supports OSU’s mission, reflects institutional priorities, and responds to opportunities. The University will develop its first 10-year capital plan during the second half of FY2016 and will update the plan annually. The Capital Forecast Plan is dynamic and includes campus buildings, landscapes and other infrastructure to meet university needs. Both minor ($1M ‒ $5M) and major (over $5M) capital projects are included. To make data-driven decisions that optimize all OSU space (Corvallis main campus, Corvallis off-campus, Bend, Newport and Portland), planning will align with and consider the following:

• OSU strategic plan, • OSU space standards and utilization database, • OSU executive, college and unit initiatives, • OSU business plan, • OSU Foundation fundraising opportunities, and • OSU’s physical development code.

Collaboration, transparency and communication are vital for a robust Capital Forecast Plan. Essential partners with Capital Planning and Development (CPD) on these efforts include the OSU Foundation; the Provost Council; the Infrastructure Working Group; the Division of Finance and Administration Leadership Council; the Capital Planning Working Group; the Campus Planning Committee; the Classroom Improvement Working Group; executive, college and unit leadership; Facilities Services; and ASOSU. Outreach in the form of annual workshops is envisioned to engage campus leaders in understanding and informing goals, processes, outcomes and values of the OSU Capital Forecast and Integrative Capital plans. Capacities and constraints that must be fully considered in the creation and execution of the OSU Capital Forecast Plan include bi-annual/annual capital budget constraints, operational and management capacity, space/surge capacity, and infrastructure capacity. Assessments that will be used to inform the creation and implementation of the OSU Forecast Plan include space utilization data, buildable land survey(s), classroom utilization and condition analyses, and building condition assessments. To align decision-making efforts with university goals, objectives and strategic plans, CPD will solicit capital plans and strategic plans from divisions, colleges and units; coordinate on-going communication with Finance and Administration, ASOSU Student and Incidental Fees Committee, and OSU and CPD’s partners; validate long- and short-term financial impacts; develop a 10-Year Capital Forecast Guidelines – Call for Capital Space Needs; implement strategies for infrastructure life-cycle planning and funding of operations, maintenance, and depreciation; and provide incentives for increased space use efficiency. The following flow chart captures the process for creating and maintaining a dynamic and transparent 10-year OSU Capital Forecast Plan.

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Capital Budget Context, including Long-Range Plan Development and FY2017 Preliminary Capital Plan