Revenue Fund
General Overview
The Revenue Fund is a bonding program established in 1955, and is governed by state statute. The Revenue Fund is available only to state universities, and can be used to acquire, construct, complete, remodel, equip, operate, control, and manage facilities, such as:
- residence halls
- dining facilities
- student union buildings
- parking facilities
- and any other similar revenue-producing buildings of such type and character as the board finds necessary for the good and benefit of the state universities.
Academic and administrative buildings must use General Obligation bonds of the State of Minnesota.
Facilities (current as of Jan 2008)
- Seven state universities
- Sixty-four Buildings
- 4,200,000 Square Feet
- Current Construction Projects
Recent Debt and Defeasance
- Defeased (eliminated) debt of $28 million in June 2001
- Currently has $150 million of bonding authority from Legislature
- $36 million of bonds in January 2002
- $45 million of bonds in October 2005
- $43 million of bonds in February 2007
Typical Operations
- Administered through by the Vice President of Student Affairs
- Includes all residence halls, dining services, student union, some parking facilities, and some fitness facilities
- Does not include programming or other Activity Fee funded operations
Funding Mechanisms
Fees, in conjunction with other revenue, must be sufficient to support the program operations, maintain the facilities and provide coverage for outstanding debt at a ratio of 110% for the principal and 130% for the interest.
Approval and Consultation
- The Board of Trustees must approve fees
- Students must be consulted prior to submission of fees for approval.
Other Income
- Universities attempt to maximize non-fee income to the best of their abilities; examples are conferences, commission income, and space rentals.
Facilities Renewal and Reinvestment Model(FRRM)
- Ten year program to achieve 7% Facilities Condition Index or below
- Program integrated with academic and other facilities
- Based on forward projections of facility replacement needs
- Integrated with Repair and Replacement Program
- Roofs are included
Master Resolutions
Revenue Fund programs underwent decentralization and budgetary restructuring to:
- provide students with facilities and programs that meet their varied needs;
- allow the individual universities to financially and programmatically manage their programs; and
- provide flexibility in the generation of additional income while maintaining the financial integrity of the Revenue Fund.
A Master Indenture is the legal contract between the sellers and purchasers of revenue bonds. The series resolution details the legal and financial expectations and restrictions the buyers require of the sellers for a specific sale. The Board of Trustees must agree to the original resolution and reaffirm it prior to every bond sale.
The Master Indenture, approved by Board of Trustees in January 2007 brings the Fund and the universities even further along in the decentralization development while continuing the expectation of management reporting and oversight.
Reserves
- A reserve of three to six months of the operating expenditures of the residence hall and student union programs, less dining service costs and the Repair and Replacement deposit, will be established on each campus.
- This reserve may be used for unanticipated operational or facility needs. All university reserves must be utilized prior to gaining access to Fund level reserves, unless otherwise approved by the Chancellor. A university must be able to identify operating reserves separately from Repair and Replacement reserves.
- If a university is under the three months minimum, the president must provide a plan to indicate how and by when the reserve will meet the requirement. If a university is over the six month maximum, the president must provide an explanation of the plans for the reserves.
If you have questions, comments please e-mail us (facilities@so.mnscu.edu) or refer to the staff directory for additional contact information.
