Validating a Capital Program to Facilitate Project Funding.
CSU Long Beach plans to double its student housing beds over the next decade, as well as introduce housing options for faculty, families, and off-campus facilities. Following both housing market demand and expansion studies, the University developed a 2019-2027 Capital Plan Forecast that addresses the concerns and recommendations raised by these studies.
To implement this Capital Plan, CSULB must submit the Capital Plan projects to the CSU Chancellor’s Office, Department of Finance and Treasury (F&T) for funding approval. In support of this goal, CSULB sought an advisor to analyze their proposed long term capital plan relative to campus cash flows; assess proposed renovations of existing housing facilities; and support the development of submission documents for the CSU Chancellor’s Office.
Hayat Brown Role:
Capital Program Forecast
Hayat Brown team members developed a capital program forecast that included an analysis of the rate of growth versus projected income and reserves to finance proposed projects. This 8-year cashflow forecast helped to determine whether the Housing and Residence Life department could execute capital and deferred maintenance plans as envisioned. The analysis was based on market conditions and financial projections, as well as cost estimates and revenue projections. To offer added confidence and identify potential risks, the study included a sensitivity analysis of revenue and expense growth rates, and interest rates.
Project-focused Financial Analysis
Our team conducted a financial analysis of the rate of growth versus projected income and reserves for the proposed first phase of the campus’ capital program, the full interior and exterior renovation of three existing housing facilities. We developed a pro forma financial model in the format required for submission to F&T in order to secure funding approval. The model included project cash flows for the entire term of existing and proposed debt.