the future of charter school funding and facilities by charter school capital
DESCRIPTION
This presentation will provide you with valuable insight into the future of charter school funding and facilities. Learn about a unique turn-key approach to financing operational costs as well as financing new construction and modernization of facilities for charter schools. We discuss how new market tax credits and other available funding sources are being utilized to build and operate charter schools.TRANSCRIPT
Copyright © 2012 Charter School Capital
The Future of Charter School Facilities
Copyright © 2012 Charter School Capital
AGENDA
2
What We Will Cover Today
• Balancing facilities dreams and budget realities • Funding options • Project execution • Other considerations
Copyright © 2012 Charter School Capital
PROJECT FLOW
3
Plan Construct Design Acquire
þ Space þ Features þ Budget þ Timeline þ Charter
issues
þ Select firm(s) þ Design/build
options þ GC input þ Timing; big
bang or phased
þ Locate Site þ Acquisition þ Permitting þ Land prep
þ Move dirt þ Raise the
roof þ Control:
Project manager or owners rep
Fund
þ Cash þ Bank þ Bond þ Long Term
Lease
Copyright © 2012 Charter School Capital
BUDGET VS NEED
4
Your School’s Facility Project
• Existing reserves
• Ongoing % of revenue
• Fundraising – public or private
• Funding alternatives
• Academic mission
• Growth plan
• Specialty requirements
• Local considerations
What can we afford? What is required?
Copyright © 2012 Charter School Capital
CRITERIA
5
Security
CASH TRADITIONAL BANK BOND LT LEASE/
OPTION
Growth Options
FUNDING COMPARISON
Underwriting
Annual cost
Cash needed
Copyright © 2012 Charter School Capital
FUNDING COMPARISON
CRITERIA
6
Cash needed to close (e.g.
$10M Project)
Annual Cost (e.g. $10M
project)
CASH
$10M
BANK BOND
~$200-500K $0-100K $3-4M
$0 $1.0M – 1.3M $1M $500K - 900K
Other Reserves?
7-10%
120% of project $
Rating?
10%
No amortization
6%- 8% on the debt
10-20yr
amortization
TRADITIONAL BANK
LT LEASE/ OPTION
Copyright © 2012 Charter School Capital
CRITERIA
7
Security Interest
CASH
None
BANK BOND
Real estate + all assets None Real estate
+ all assets
School Growth Options cash = build Refinance
(rate risk?) Scalable /
expandable Refinance (rate risk?)
FUNDING COMPARISON
Underwriting / Credit
Worthiness None
Min 3 yrs
Surplus
Rating?
No minimum
Academic success
Flexible
Min 5 yrs
Surplus
Assets + Revenue
LT LEASE/ OPTION
TRADITIONAL BANK
Copyright © 2012 Charter School Capital
CRITERIA
8
Security
CASH BANK BOND
Growth Options
FUNDING COMPARISON
Underwriting
Annual cost
Cash needed
TRADITIONAL BANK
LT LEASE/ OPTION
Copyright © 2012 Charter School Capital
PERCEPTION VS REALITY
9
What to Consider
• Ownership is an “investment” • Control is critical • Evaluate $ spent not % rates
Copyright © 2012 Charter School Capital
PROJECT ELEMENTS
10
Convert Facility Dreams to Reality
• Design needs • Value engineering
- Design to budget
• Space needs - Portable to permanent
• Schedule/timeline
Copyright © 2012 Charter School Capital
PROJECT ELEMENTS
11
Master Plan
• Ensure classroom safety • 21st century learning environments • Maintain flexibility • Options to accommodate future growth • Increase outdoor learning opportunities • Reduce transportation costs • Maximize joint use opportunities with community • Green schools – reduce operational costs
Copyright © 2012 Charter School Capital
DEFINING PRIORITIES
12
Priority One
• Code, health, safety, infrastructure - Americans with Disabilities Act (ADA) - Hazardous materials removal - Building code upgrades - Building shell integrity - Modular classroom building - Seismic retrofit/modernization
Copyright © 2012 Charter School Capital
DEFINING PRIORITIES
13
Priority Two
• Program scope - Interior renovations/complete classroom - Energy efficiency - Administration building modernization - Site utilities/drainage - Classroom technology
Copyright © 2012 Charter School Capital
DEFINING PRIORITIES
14
Priority Three
• Site facilities - Athletic fields - Site entry circulation - Visitor parking - Renewable energy: solar panel car ports
Copyright © 2012 Charter School Capital
1 MO 2 -‐ 6 MO
Programming +
Project Scoping
Design Review + Approval
BEGIN
3 -‐ 5 MO
1. SchemaGc Design
2. Design Development
3. ConstrucGon Documents
COMPLETION
ConstrucGon phase
Phased Summer ConstrucGon
or 6 -‐ 24 months if new construcGon
BEGIN CONSTRUCTION
PROJECT SCHEDULE
15
Design + Design review / approval likely will overlap reducing your total project time
Copyright © 2012 Charter School Capital
OPTIONS
16
Additional Considerations
• Access to working capital • Selecting a full service partner
- Commercial Developer - Architect - GC - Design/build
• Total cost of ownership
Copyright © 2012 Charter School Capital
Stuart Ellis: [email protected]
Charter School Capital:
877.272.1001 charterschoolcapital.org
Jon Dahlberg: [email protected]