Notable highlights and changes compared to last month include:

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1 STANDING COMMITTEES F 4 Finance and Asset Management Committee Capital and Debt Update INFORMATION ITEM This item is being presented for information only. BACKGROUND This is a standing agenda item. Notable highlights and changes compared to last month include: The Harborview Hall lease was eliminated from the One Capital Plan The Active Capital Projects Summary is in a new format The Semi-Annual Lending Program Report is included this month. This report typically comes with the Semi-Annual borrowers report (presented October 2016), but was inadvertently excluded last month. Attachments 1. One Capital Plan ( ) 2. Active Capital Projects Summary (as of September 30, 2016) 3. Capital Project Approval Process 4. Monthly Debt Report, As of 9/30/ Semi-Annual ILP Report, As of 6/30/16 F 4/211-16

2 Approved 9/8/16 One Capital Plan ( ) Project Project Information Project Funding Funding in $ Millions Budget Total GSF New GSF O&M Previous State Debt Donor Local Other STUDENT EXPERIENCE Improving the Learning Environment Campus Wide Planning Targets: $ 2,425 2,000,000 $100 $250 $425 $450 $600 $600 1 Classroom Improvements (6 year plan) $ 30 60, Population Health Education Facility (T-Wing addition) $ , , T-Wing Renovation Phase 2 (pre-design) $ 2 150, UW Library Storage / Repurpose on-campus space $ 15 35,000 13, Schmitz Hall Improvements $ 15 80, Evans School - Parrington Hall Remodel $ 20 59, Foster School of Business - MacKenzie Hall Replacement $ 65 90,000 25, Miller Hall Renovation (predesign / design) $ 4 72, Anderson Hall Renovation (design) $ 3 33, Accommodating Growth 10 Computer Science & Engineering Building 2 $ , , College of Engineering - Interdisciplinary Education and Research$ ,000 50, UW Bothell Phase 4 - Academic STEM Building $ , , UW Bothell Campus Development - Add'l. Academic Space $ 30 50,000 50, UW Tacoma Phase 4 - Academic Building $ 35 60,000 60, UW Tacoma Campus Development - Add'l. Academic Space $ 20 54,000 54, Providing Quality Student Housing 16 Student Housing - North Campus Phase 4b $ , , UW Bothell Housing - Student Housing & Dining $ , , UW Tacoma - Student Housing - Court 17 Acquisition $ ,000 65, UW Tacoma Housing - Private Development $ 35 n/a n/a INNOVATION MINDSET Leveraging Interdisciplinary Strengths subtotal: $ Population Health Sciences Building $ , , UW Medicine - South Lake Union Phase 3.3 $ , , UW Medicine - Harborview Hall Lease $ College of Arts & Sciences - Kincaid Hall Backfill $ 15 85, Developing an Innovation District 24 Center for Advanced Materials and Clean Energy Technologies $ , , Industry District Partnership Lab Development $ , , PUBLIC AS A PHILOSOPHY Sharing with the Community subtotal: $ Burke Museum $ ,000 34, Intellectual House Phase 2 $ 8 8,200 8, Burke Gilman Trail Improvements - Phase 3 $ Improving the Public Realm 29 West Campus Park $ Waterfront Improvements in South Campus & the Cut $ UW Tacoma - Soil Remediation $ subtotal: $ 145 F 4.1/ ATTACHMENT 1 Page 1 of 2

3 Approved 9/8/16 One Capital Plan ( ) Project Project Information Project Funding Funding in $ Millions Budget Total GSF New GSF O&M Previous State Debt Donor Local Other TRANSFORMING ADMINISTRATION Consolidating to Make Room for Growth 32 University District Development at Sound Transit $ , , UW Medicine - South Lake Union Rosen Remodel $ 6 60, UW Seattle - Parking garage(s) - Add'l. 500 Spaces $ tbd UW Bothell - Parking Garage $ Addressing Critical Renewal 36 UW Medicine IT Core Applications and Infrastructure $ Enterprise Information Systems (financial system) $ UW Medicine - Core Research Facilities $ 12 11, Seismic Improvement s (6-year plan) $ , Fuel Switching / Power Plant Upgrade $ Minor Capital Repair $ UW Seattle - Parking lot improvements (6 year plan) $ subtotals: $ 824 Totals: $ 2,791 3,636,575 2,185,200 $ 20 $108 $ 338 $ 524 $ 513 $ 668 $ 640 Targets: $ 2,425 2,000,000 $100 $250 $425 $450 $600 $600 Note: Item numbers do not represent priorities F 4.1/ Page 2 of 2

4 Project Name Active Capital Projects Summary (as of September 30, 2016) Financial Details Schedule Business Equity Project Health Budget Forecast Over/Under Funding Committed Target Forecast Utilization Award ($M) Budget Funding Schedule Safety Animal Research and Care Facility ZGF/Skanska $ $ $ 14.1 $ /17 4/17 3.2% $3.2 Computer Science and Engineering Exp. LMN Architects/Mortensen $ $ $ 4.7 $ /18 12/18 n/a n/a Fluke Hall Renovation HDR/Hoffman $ 37.0 $ 36.6 $ (0.4) $ /17 8/17 n/a n/a GIX Tenant Improvements Wright Runstad $ 19.6 $ 23.4 $ 3.8 $ /17 9/17 n/a n/a Life Sciences Building Perkins & Will/Skanska $ $ $ (2.1) $ /18 7/18 n/a n/a NanoEngineering and Sciences Building ZGF/Hoffman $ 87.4 $ 85.4 $ (2.0) $ /16 7/17 6.8% 3.3 New Burke Museum Olsen Kundig/Skanska $ 79.0 $ 78.7 $ (0.3) $ /19 9/19 n/a n/a North Campus Housing Phase 4a Kieran Timberlake/W.G. Clark $ $ $ 2.3 $ /18 6/18 n/a n/a North Campus Housing Phase 4b Kieran Timberlake/W.G. Clark $ 10.0 $ 10.4 $ 0.4 $ 1.0 8/19 8/19 n/a n/a UW Medicine South Lake Union 3.2 Vulcan/Perkins & Will/Lease Crutcher Lewis $ $ $ 8.3 $ /17 6/18 n/a n/a Tacoma Urban Solutions Center Miller Hull/Mortensen $ 28.0 $ 28.0 $ - $ /17 4/17 n/a n/a UW Medical Center Expansion Phase II NBBJ/Mortenson $ $ $ 11.7 $ /17 7/ % 26.3 West Campus Utility Plant Miller Hull/Mortensen $ 44.2 $ 44.2 $ - $ /17 1/ % 5.9 HR Payroll Modernization $ 75.9 $ 75.9 $ - $ /14 6/17 n/a n/a Totals $ 1,344.2 $ 1,384.7 $ 40.5 $ 1,182.7 $ 38.7 Legend Green = on track; Yellow = recovery plan in place; Red = unrecoverable Arrows represent change from last month: Arrow up = positive; Arrow down = negative; Circles = no change = Forecasts have been modified since last report n/a = data not available at this time Notes: The Animal Research and Care project is over budget and additional funding will be needed to complete the project. UW Medical Center Expansion Phase II is also over budget and adjustments in scope and funding will be needed to complete the project. F 4.2/ ATTACHMENT 2 Page 1 of 1

5 Capital Project Approval Process This document is intended to explain the process by which the University and Board of Regents authorizes the physical development of the university. Process goals: Ensure controls are in place Ensure capital plan is in place Manage & implement the plan F 4.3/ establish and standardize processes establish and update One Capital Plan prioritize projects and identify funding or financing establish project budget and manage to the plan ATTACHMENT 3 Page 1 of 1

6 Monthly Debt Report Long Term Credit Rating: Aaa/AA+ Internal Lending Rate: 4.50% Weighted Average Cost of Capital: 3.41% As of 9/30/2016 Recent Events Long-term interest rates remain low, with the current 30 year weighted average fixed borrowing cost estimated to be 3.58% (1) Short term interest rates continue to rise. The University repriced commercial paper on October 6th and 12th at 0.93% and 0.80% respectively The University priced bonds on October 18th at an all-in rate of 3.40%. The bonds consisted of $200 million of proceeds for capital projects (including refunding $45 million of commercial paper) and $38.2 million to refund the 2008 GRBs producing average annual debt service savings of $310,000. This change will be reflected in the January Monthly Debt Report Estimated Project Capacity FY As of 9/30/2016 Total Debt Capacity $ Plus: Remaining CAP(2) 100 Less: Authorized Projects(3) (430) 855 Project Capacity $ Less: Projects authorized this year A project capacity update was presented at the May 2016 Regents meeting based on 2015 audited financial statements and projections Figures represent the estimated amount of additional debt the University can issue over the next five years while aligning with peer minimum ratios $405 million of project capacity is available of which $305 million can come from debt 425 (20) (4) Remaining Project Capacity 755 $ 405 External Debt Portfolio - $2,266 Million The University has $2,266 million of external debt outstanding. This is approximately $67 million lower than the previous report (6/30/2016) due to $33 million of principal payments, $45 million of new debt through commercial paper, and the exclusion of approximately $78 Million of Valley Medical Center debt Non-ILP Debt, 32% ILP Debt, 68% Weighted average cost of capital: 3.41% Portfolio Composition: 96% fixed rate; 4% variable rate $142 million in internal funding provided by the CAP is excluded from the external debt portfolio Millions Annual Debt Service (5) $210 Maximum Annual Debt Service $195M $180 $150 $120 $90 $60 $30 $0 General Revenue Bonds State Issued Bonds, Payable by UW Lease Revenue Bonds Other CP (6) NWH (1) 80/20 weighting between the tax-exempt and taxable 30 year long term interest rates to accurately reflect the University's portfolio (2) 10% of the Invested Funds (IF), less previously allocated Capital Assets Pool (CAP) dollars (3) Projects approved before the May debt capacity analysis, including Life Sciences, Housing Phase 4a and other authorized projects (4) Includes Court 17 (5) Excludes Valley Limited Tax General Obligation Bonds and Revenue Bonds (6) Excludes principal payments on Commercial Paper F 4.4/ ATTACHMENT 4 Page 1 of 2

7 Monthly Debt Report As of 9/30/2016 Long Term Credit Rating: Aaa/AA+ Internal Lending Rate: 4.50% Weighted Average Cost of Capital: 3.41% Outstanding External Debt Project Purpose Balance (1) Final Maturity % by Purpose Molecular Engineering Building Instruction and Research Dempsey Hall Instruction and Research Foege Building Instruction and Research UW Bothell Phase 3 Instruction and Research William H. Gates Law School Instruction and Research Instruction and Research, 16% AAALAC Instruction and Research Ben Hall Instruction and Research Animal Research and Care Facilities Instruction and Research Denny Hall Instruction and Research Ocean Sciences Instruction and Research Physics-Astronomy Instruction and Research Other Instruction and Research Instruction and Research 26.9 various Subtotal Instruction and Research South Lake Union (Ph I, II, 3.1, & 3.2) UW Medicine UW Medicine, 32% UWMC Expansion UW Medicine NW Hospital UW Medicine UWMC Surgery Pavilion UW Medicine Other UW Medicine UW Medicine 26.1 various Subtotal UW Medicine Housing Expansion Student Life Husky Union Building Student Life IMA Building Student Life Radford Court Apartments Student Life Nordheim Court Student Life Bothell Student Center Student Life Ethnic Cultural Center Student Life UW Tacoma YMCA Student Life Student Life, 29% Other Student Life Student Life 29.3 various Subtotal Student Life UW Tower Academic Support Cobb Building Academic Support HR Payroll Modernization Academic Support 25.0 n/a 4225 Roosevelt Academic Support Building Academic Support West Campus Utility Plant Academic Support Other Academic Support Academic Support 36.5 various Academic Support, 11% Subtotal Academic Support Husky Stadium Athletics Husky Ballpark Athletics Other Athletics Athletics 6.8 various Subtotal Athletics Available Proceeds Unallocated 15.4 Total University Outstanding Debt 2,265.6 (1) Will not exactly match ILP balances due to bond premiums and use of the CAP Athletics, 11% Unallocated, 1% 100% F 4.4/ Page 2 of 2

8 Internal Lending Program (ILP) Rate 4.50% Semi-Annual ILP Report As of 6/30/16 ILP Committed Capital Reserves (1) Capital Assets Pool (CAP) Balances at 6/30/15 Internal Debt Service External Debt Service $ (122) CAP may used for University capital projects with amortizations up to thirty years. The CAP target allocation is 10% of the Invested Funds Pool, with a range of 0-15% to allow for market fluctuations. CAP funds are borrowed though the ILP. Net Project Funding (3) Investment Income ILP Expenses Balance at 6/30/16 0 Invested Funds Pool Balance $2,345. (3) Target Allocation (10%) Utilized to Date (53%) (1) $235 ($123) $219 (2) Allocation Remaining $112 (1) Reflects $59M in RSA (1) Excludes $20M of CAP used for Court 17 in July 2016 (2) Includes $28M in external debt service payments to be made on 7/1/16 ILP Borrowers ILP Projected Funding Needs Department Loan Balance In Compliance as of 6/30/15 $250 Housing and Food Services $547 Yes UW Medicine $401 Yes $200 $200 $210 Central $359 N/A Intercollegiate Athletics (1)(2) $252 No $150 Student Life $145 Yes UW Bothell $32 Yes UW Tacoma $18 Yes $100 Transportation Services $9 N/A School of Dentistry (2) $11 No $50 Global Health $1 Yes Total at 6/30/16 $1,774 (1) Preliminary unaudited financial reports show ICA in compliance as of 6/30/16 (3) $0 $16 FY17 FY18 FY19 (2) Financial Stability Plans for the School of Dentistry and Intercollegiate Athletics were approved by the Board at the April and June meetings Based on projects approved by Board of Regents as of 6/30/16. Total project funding needs total $426M. $200M of this debt will be issued in November 2016 (3) Only reflective of outstanding debt within the ILP F 4.5/ ATTACHMENT 5 Page 1 of 1