M E M O R A N D U M

							March 22, 2011

To:		Members of the Board of Trustees

From:		Nancy L. Zimpher, Chancellor

Subject:	Residence Halls Program Bonds


Action Requested
 	
	The proposed resolution authorizes the issuance of bonds by the Dormitory Authority of the State of New York to finance dormitories in amounts determined by the Division of the Budget for the 2011-12 fiscal year, consistent with enacted appropriations. 

Resolution

      I recommend that the Board of Trustees adopt the following resolution:

Whereas pursuant to Resolution 95-181, adopted September 20, 1995, State University of New York entered into a program with the Dormitory Authority of the State of New York for the acquisition, construction and improvement of State University residence halls and related facilities; and

Whereas pursuant to Resolution 2003-82, adopted September 16, 2003, the program for residence halls and related facilities was restructured; and 

Whereas the Dormitory Authority adopted on September 25, 1995, and amended and restated on September 24, 2003, the Lease Revenue Bond Resolution (State University Dormitory Facilities Issue) (as amended and restated, the “Bond Resolution”), pursuant to which bonds are issued to finance the program; and

Whereas the State University and the Dormitory Authority propose to issue bonds under the Bond Resolution to finance the costs of residence halls facilities; now, therefore, be it

Resolved that the Chancellor, or designee, be, and hereby is, authorized to execute and deliver, in the name and on behalf of the State University of New York, such documents as may be found appropriate to effectuate the purposes hereof, and to take steps necessary and appropriate to enable the Dormitory Authority of the State of New York to finance the costs of residence halls facilities in amounts authorized by the State Division of the Budget to support expenditures with respect to the State’s 2011-12 fiscal year, consistent with enacted  capital  appropriations.

Background

	The resolution authorizes the issuance of bonds under the existing dormitory financing program, established in 1995 and restructured in 2003, to finance new residence halls and improvements of existing residence halls.  

	Under the existing dormitory financing program, debt service on bonds is paid from rents and other income derived from the use of the financed facilities, and not from State appropriations.

      The State has changed procedures for bond financing of the State University dormitories capital program from the project-specific sale of bonds in advance of expenditures to a program-wide disbursement-based financing approach intended to avoid unnecessary debt service costs.  As a result of this change, periodic (mostly annual) bonding amounts are based on overall projected disbursement levels for the dormitories capital program during a certain timeframe, and are not intended to support the total project costs of specific individual projects.

	It is anticipated that the bonds will be issued in one or more series, and bonds may be issued in both fixed and variable rate modes, depending upon market conditions at the time of issue.  The bonds will be issued in amounts consistent with enacted capital appropriations and as determined by the State Division of the Budget.   Bond issuances during the State fiscal year 2011-12 in support of the residence hall program are not expected to exceed $260 million.

	The projects to be financed with the bonds shall be determined prior to the sale and issuance of the bonds, currently anticipated to be sold in May/June of 2011.

Board Resolution                                       -2-	March 22, 2011