Dormitory Authority Meeting June 22, 2016 The Dormitory ......Jun 22, 2016 · 1 . T:/MIN/2016/...

Dormitory Authority Meeting June 22, 2016

1 T:/MIN/2016/ June 22 2016 Minutes

The Dormitory Authority of the State of New York met in a Regular Meeting at DASNY’s Albany Office, 515 Broadway, Albany, New York at 9:30 a.m. on Wednesday, June 22, 2016. The Meeting was called to order by the Chair. Roll call was taken and a quorum was present. Those Members present for and absent from the Meeting were as follows:

Members Present Alfonso L. Carney, Jr., Chair, Member John B. Johnson, Jr., Vice Chair, Member Sandra M. Shapard, Secretary, Member Beryl L. Snyder, Esq., Member Jonathan H. Gardner, Esq., Member Gerard Romski, Esq., Member Adrian Swierczewski, Designated Representative of the Director of the Budget, Member (ex officio) Charles Abel, Designated Representative of the Commissioner of Health, Member (ex officio) Members Absent: Commissioner of Education, Member (ex officio) Also Present - Dormitory Authority Staff:

Gerrard P. Bushell, President Michael T. Corrigan, Vice President Michael E. Cusack, Esq., General Counsel Kimberly J. Nadeau, Chief Financial Officer Portia Lee, Managing Director of Public Finance and Portfolio Monitoring Stephen D. Curro, Managing Director of Construction Caprice G. Spann, Managing Director of the Office of Executive Initiatives Caroline V. Griffin, Chief of Staff Debra Pulenskey Drescher, Esq., Managing General Counsel Debbie Paden, Esq., Managing General Counsel Larry N. Volk, Senior Director, Portfolio Monitoring Paul G. Koopman, Managing Senior Director, Construction Kathy D. Ebert, Director, Internal Audit Freeman M. Klopott, Director, Communications & Marketing Daniel W. Petroff, Chief of Strategic and Business Development Karen M. Seiter, Assistant Director, Accounting Karen E. Ehlinger, Manager, Internal Control Analysis Sara Richards, Esq., Associate Counsel David F. Perritano, Public Information Office Matthew T. Bergin, Senior Financial Analyst Stephen J. Kosier, Senior Financial Analyst David P. Ostrander, Senior Financial Analyst



Arthur R. Ware, Senior Financial Analyst Tiffany N. Bryant, Special Assistant to the President Josh Isaacson, System Specialist Others Present Harrie C. Patrick, Esq. Harris Beach, LLP Kevin Bezio, Esq. Gabriel J. Marous, Esq. Marous Law Group, P.C. Greg Driscoll KPMG Jeffrey Koch Grace Kachigian Annette Hale BCA Watson Rice

PUBLIC SESSION The Chair called the Meeting to order. He announced that Dr. Hedges has submitted his resignation to the Assembly and that he would not be attending today’s Meeting. He reflected upon Dr. Hedges’ ten years of service on the DASNY Board. The Chair stated that Dr. Hedges contributed a great deal to the quality of discourse among the Members, and that he appreciated his tough questions and analytical approach to the issues before the Board. He further stated that Dr. Hedges is an intellect who always asked interesting and thought-provoking questions. The Chair noted that although he did not always agree with Dr. Hedges’ views, he was grateful that Dr. Hedges expressed his opinions and was always able to support them. He praised Dr. Hedges for his dedication and commitment to DASNY. Mr. Romski agreed with the Board Chair, and stated that Dr. Hedges would be missed. He noted that Dr. Hedges is a man of great intellect and insight into a wide range of issues. Ms. Shapard stated that she, too, would miss Dr. Hedges. She reminded the Members that she has known Dr. Hedges for many years and that they regularly debated various issues surrounding the transactions before the Members for approval. Ms. Shapard stated that Dr. Hedges was very committed to DASNY. She asked if a Resolution recognizing Dr. Hedges’ service would be presented to the Members, and the Chair responded that he anticipates a Resolution will be acted upon at the July Meeting. The Minutes of the May 11, 2016 Regular Meeting were then reviewed and approved. Mr. Gardner arrived at the meeting at this time. Construction Presentation Mr. Curro delivered a presentation to the Members that summarized DASNY’s client base; the structure and organization of the Construction Division; the service models employed by DASNY when delivering construction projects; a description of how projects come to



DASNY; a timeline for a project; different methods of contracting; and opportunities and challenges faced by the Construction Division. He stated that DASNY’s largest clients include the City University of New York (“CUNY”), the State University of New York (“SUNY”), and State and City entities including the Office for People with Developmental Disabilities (“OPWDD”), the Office of Mental Health (“OMH”), the Office of Alcoholism and Substance Abuse Services (“OASAS”), the Department of Environmental Conservation (“DEC”), the Office of Parks, Recreation and Historic Preservation (“OPRHP”), the Governor’s Office of Storm Recovery (“GOSR”), the NYC Office of the Chief Medical Examiner, Division of Citywide Administrative Services (“DCAS”), Health and Hospitals Corporation (“HHC”) and, more recently, the New York City Housing Authority (“NYCHA”). Mr. Curro briefly summarized certain projects currently being undertaken for these entities. He noted that most of DASNY’s largest construction projects are in the downstate New York area. Mr. Curro informed the Members that DASNY’s largest projects are being completed and closed out, including the CCNY-ASRC facility, which is the biggest project in DASNY history. Mr. Curro noted that DASNY is currently involved in a high number of smaller projects. Ms. Shapard inquired whether the very large construction projects, such as the ASRC facility, are being undertaken by other construction entities. Mr. Curro replied in the negative. He stated that DASNY’s clients are simply not undertaking large projects at the present time. Mr. Curro reviewed the structure of the Construction Division and described the breadth of construction-related functions performed by DASNY staff. Ms. Snyder asked whether the Division has more employees now that there is a greater number of projects. Mr. Curro stated that the workforce has been reduced by 25% over the past eight years. He explained that in 2008, there were approximately 400 staff in the Construction Division, compared to less than 300 in 2016. Mr. Curro attributed the reduction in the number of employees to advances in technology and increased efficiency, as well as attrition. Ms. Shapard asked whether there is a standard ratio of DASNY staff to contracted staff on a typical project. Mr. Curro responded that there is no “typical” project, and that the number of DASNY personnel depends on a number of factors including the complexity of the project and, if using a Construction Manager, the labor force provided by the Construction Manager. He provided the example of the $700 million CCNY-ASRC project, where DASNY provided approximately 3-4 full time employees and the Construction Manager provided approximately 50 staff members. Mr. Curro noted that the labor force for that project at times was in excess of 500 people. Mr. Curro discussed the types of personnel involved with various projects. He stated that most SUNY summer projects are staffed with a part-time Project Manager and a full-time or part-time Field Representative. Mr. Curro explained that clients want the construction dollars to go directly to the project itself and not the DASNY staff required to administer the project. He informed the Members that DASNY utilizes approximately 175 term consultants to undertake a significant amount of project-related work, particularly in the architect and engineering fields. He noted that DASNY does not typically provide direct design services, although DASNY staff reviews the design work undertaken by design professionals. Mr. Curro further noted that term consultants provide expertise in various other areas as well. Mr. Curro explained the different levels of construction services provided for a variety of projects, ranging from science/research facilities to student dormitories. He emphasized that



most of DASNY’s clients have many options regarding construction services, so DASNY strives to provide value-added services. He explained that under the full service model, DASNY staff manages the project from start to finish, holds the contracts, and manages the work performed by contractors. He further explained that for modified service projects, DASNY does not hold the contracts; rather, DASNY utilizes in-house employees and term consultants to provide expertise and services where necessary or requested. Mr. Curro described the process DASNY undertakes in a competitive procurement for construction services and discussed the cycle of a project from start to finish. He highlighted certain provisions of the Project Labor Agreement in effect in New York City, the requirement to comply with the Wicks Law, and MWBE requirements. He distributed photographs illustrating the breadth of projects with which DASNY is involved. Ms. Shapard asked whether DASNY ever declines to undertake projects and if so, for what reason. Mr. Curro responded that DASNY would only turn down a project if the organization lacks the necessary expertise to successfully manage it. He provided as an example a pier project being undertaken in the Hudson River in New York City. Mr. Curro stated that although it would have been an exciting opportunity, DASNY did not undertake the project as it was outside of the organization’s knowledge and expertise. The Board Members applauded Mr. Curro’s presentation. The Board Chair thanked Mr. Curro for his detailed presentation and informed the Members that he thought it was important to obtain a better understanding of the services provided by the Construction Division. He encouraged them to ask additional questions in the future should they arise. Mr. Curro informed the Members that more detailed presentations are being planned in specific areas, including Procurement, Opportunity Programs, the CUNY and SUNY Program and others. Finance Committee Report Finance Committee Chair Romski reported that the Finance Committee met on Tuesday, June 21, 2016, and that after discussion, decided unanimously to recommend the following transactions to the full Board for approval: Bank Street College of Education, New York Institute of Technology and NYSARC, Inc. (TELP). Parker Jewish Institute for Health Care and Rehabilitation

The President introduced Harrie C. Patrick, Esq., and Kevin Bezio, Esq. of Harris Beach, LLP and Gabriel Marous, Esq. of the Marous Law Group, P.C., co-bond counsel on the transaction, and Mr. Bergin.

Mr. Bergin provided a brief update on the transaction, noting that the Resolution to Proceed was adopted by the Board at the May Regular Meeting. He stated that the SEQRA process has concluded and that the TEFRA hearing had been held. Mr. Bergin further stated that the PACB has approved the transaction. He summarized that the transaction involves a small amount of new money projects and the refinancing of existing taxable debt through M & T Bank, as purchaser, in this private placement transaction. Mr. Bergin reminded the Members that the transaction contemplates the issuance of variable rate debt with a SWAP to fixed rate debt in the future. He stated that the Institute will retain an independent SWAP advisor.

Mr. Patrick further described the transaction and presented the financing documents. He stated that before the Members for their consideration are the adoption of a general resolution for



Parker Jewish Institute for Health Care and Rehabilitation, a not-for-profit nursing home licensed under Article 28A of the Public Health Law and a Series Resolution authorizing the issuance of tax-exempt, variable rate bonds in an amount not to exceed $42,000,000 for a term not to exceed 27 years from the July 1next succeeding the date the Bonds are issued on behalf of the Institute. Mr. Patrick informed the Members that the Series 2016 Bonds will be issued as draw-down bonds and will be privately placed with M & T Bank.

Mr. Patrick stated that the proceeds of the Series 2016 Bonds will be used to: refinance approximately $31,000,000 in construction loans provided to the Institute by M & T Bank; to finance approximately $8,200,000 in construction costs to complete ongoing renovations; and to pay capitalized interest and costs of issuance in connection with the issuance of the Bonds. He further stated that as the project progresses, the allocation between the amount attributable to refinancing and new money bonds may shift, depending upon funding needs.

Mr. Marous provided additional information about the Resolutions before the Members for consideration. He stated that the new General Resolution authorizes the issuance of one or more series of bonds from time to time in an unlimited principal amount for the benefit of the Institute, and that the Series 2016 Bonds will be the first issuance under the Resolution. Mr. Marous summarized the delegations to Authorized Officers under the Resolution. He stated that since the Series 2016 Bonds are being sold in a private placement to M & T Bank, they are not book-entry bonds.

Mr. Marous stated that the Series 2016 Bonds are special obligations of DASNY, payable solely out of the pledged revenues and the moneys and investments held in the funds and accounts established by the General Resolution and the applicable Series Resolution. He further stated that the General Resolution authorizes the establishment of a debt service reserve fund in connection with bonds issued under the General Resolution in order to secure payment of the debt service on that series of bonds. Mr. Marous noted that the Series 2016 Resolution does not establish a debt service reserve fund for the Series 2016 Bonds.

Mr. Marous informed the Members that the Series 2016 Bonds will be secured by the funds and accounts established pursuant to the Series Resolution and a pledge to the Trustee of payments to be made to DASNY under the Loan Agreement. He stated that the Series 2016 Bonds are expected to bear interest at a variable interest rate, with interest only payable until February 1, 2018, at which point amortization will begin. Mr. Marous further stated that the Series 2016 Resolution restricts ownership of the Series 2016 Bonds to Qualified Institutional Buyers.

Mr. Patrick stated that DASNY and the Institute will enter into a Loan Agreement in connection with the Series 2016 Bonds. He further stated that the Institute’s payments under the Loan Agreement will be secured by a mortgage, a pledge of gross receipts and a guaranty of the Parker Jewish Institute for Health Care and Rehabilitation Foundation. Mr. Patrick confirmed that the Series 2016 Bonds will be sold in a private placement transaction to M & T Bank, a Qualified Institutional Buyer, in accordance with DASNY’s Financing Guidelines. He explained that the Bond Purchase Agreement to be entered into in connection with the Series 2016 Bonds will provide that M & T Bank will fund the purchase price of the Series 2016 Bonds on a draw-down basis. Mr. Patrick further explained that M & T will make an advance of the initial installment of the purchase price of the Series 2016 Bonds on the date of issuance of the Series 2016 Bonds in an amount necessary to refinance the outstanding construction loans, the equipment leases and pay the cost of issuance. He stated that thereafter, additional installments



will be funded equal to the amounts to be disbursed to the Institute to pay the costs of the project. Mr. Patrick further stated that upon the completion of the project, the final installment of the purchase price of the Series 2016 Bonds will be made by the purchaser and the draw down period will end.

Mr. Patrick informed the Members that as a condition to the purchase of the Series 2016 Bonds, the Loan Agreement and Mortgage will be assigned to the Trustee, subject to reserved rights. He stated that other features of the Series 2016 Bonds include monthly payments of interest only until 2018 and then monthly principal and interest payments thereafter, as well as a bondholders’ put option on the tenth anniversary of bond issuance. Mr. Patrick explained that M & T may choose to hold the Series 2016 Bonds after this date and if it chooses to do so, then the interest rate may be reset and that a tax analysis will be undertaken, if necessary. He informed the Members that the Institution anticipates entering into a SWAP in order to hedge the interest rate risk on the variable rate debt.

Ms. Shapard moved the adoption of the following entitled Resolutions: A RESOLUTION AUTHORIZING THE ISSUANCE BY THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK OF ITS PARKER JEWISH INSTITUTE FOR HEALTH CARE AND REHABILITATION REVENUE BONDS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH BONDS; AND PROVIDING FOR THE RIGHTS OF THE HOLDERS THEREOF; and DORMITORY AUTHORITY OF THE STATE OF NEW YORK SERIES 2016 RESOLUTION AUTHORIZING PARKER JEWISH INSTITUTE FOR HEALTH CARE AND REHABILITATION REVENUE BONDS, SERIES 2016

Mr. Abel seconded the motion and the Resolutions were unanimously adopted.

Bank Street College of Education

Mr. Kosier presented the Credit Summary and Staff Report recommending the issuance of fixed and/or variable rate bonds to be sold in a private placement in an amount not to exceed $25,000,000 with maturities not to exceed 30 years on behalf of Bank Street College of Education. He stated that this will be Bank Street’s first DASNY financing. Mr. Kosier informed the Members that the College was founded in 1916 and is located at 610 West 112th Street on the upper west side of Manhattan.

Mr. Kosier stated that the College is an institution for higher education, authorized to

confer degrees by the Board of Regents of New York State. Mr. Kosier further stated that the College is a nationally recognized leader in education of teachers and includes three main divisions: the Graduate School of Education; Children’s Programs; and the Division of Innovation, Policy and Research. Mr. Kosier informed the Members that an integral and unique component of Bank Street’s Graduate School education is its year-long supervised fieldwork program which serves as a nexus between the Graduate School Program and the Children’s Program. Mr. Kosier explained that through the fieldwork program, each student works three to five days a week in a setting appropriate to his or her program of study. Mr. Kosier stated that in 1954, Bank Street began a full-scale elementary school which gradually expanded to include children aged three through fourteen. He explained that since every elementary classroom has



assistant teachers or student teachers that are current Bank Street Graduate School students, many of the graduate students are able to complete their fieldwork onsite.

Mr. Kosier informed the Members that the proceeds of the Series 2016 Bonds will be

used to refinance approximately $2.2 million of Series 2002 Bonds that were issued through the New York City Industrial Development Agency. He stated that the proceeds of the Series 2016 Bonds will also be used to renovate Bank Street’s 112th Street facility and to make leasehold improvements to administrative office space that is expected to be leased at the Interfaith Center of New York. Mr. Kosier informed the Members that the refinancing is expected to result in net present value savings of approximately $350,000, or 16% of the bonds being refunded, and will free up collateral to be used in connection with the proposed financing. He noted that the final maturity of the refunding bonds may exceed the final maturity of the bonds being refunded. Mr. Kosier explained that the College will weigh this alternative if tax counsel determines there is additional useful life available the assets financed with the proceeds of the Series 2002 Bonds.

Mr. Kosier stated that the Series 2016 Bonds are expected to be drawdown bonds sold

through a private placement to BankUnited, N.A. He further stated that the bonds are expected to bear interest at a fixed rate for an initial 15-year term and have a 30-year maturity. Mr. Kosier informed the Members that the Bank will have a put option after 15 years, at which time it will have the option to require a mandatory tender. He stated that the College may choose to refinance or negotiate a renewal with the Bank prior to the expiration of the 15-year term. Mr. Kosier explained that the new money bonds are expected to pay interest only for the first 24 months and that the refunding bonds will begin paying principal and interest immediately. He noted that since this is a private placement transaction, there will be no rating on the bonds. Mr. Kosier informed the Members that the bonds will be secured by a mortgage on the 112th Street Building and a pledge of revenues. He stated that Bank Street will also be required to meet certain financial covenants.

Mr. Kosier reported that Bank Street’s two main programmatic divisions are the Graduate

School of Education and the School for Children. He stated that the matriculation rates at each of these divisions are strong, averaging 70% at the Graduate School and 58% at the School for Children over the past four years. Mr. Kosier further stated that despite the strong matriculation rate, the Graduate School’s applications have declined 16% over the past four years and newly enrolled students have declined 9% over the same time period, leading to a decline in overall enrollment. He noted that the School for Children enrollment has been stable and traditionally operates at near capacity. Mr. Kosier further noted that Management plans to increase the School for Children enrollment by gradually adding additional class sections.

Mr. Kosier stated that Bank Street is dependent on net tuition revenue, which has been

relatively flat over the past five years due to the decline in graduate enrollment. He further stated that in 2015, 59% of revenues were from net tuition. Mr. Kosier informed the Members that the next largest revenue stream for the College is grants and contracts, which accounted for 24% of its 2015 revenues. He stated that Bank Street has had modest operating losses in each of the last four years ranging from - 0.2% in 2014 to - 2.7% in 2015. Mr. Kosier noted, however, that if the operating returns are adjusted by adding back depreciation, the College shows gains in each year. He stated that the College is forecasting an unaudited operating profit of approximately $600,000 in fiscal year 2016. Mr. Kosier reported that the College has



undertaken efforts to stabilize graduate enrollment, expand the School for Children enrollment, and increasing grants and contract revenue in an effort to allow operations to grow in the future.

Mr. Kosier informed the Members that the College has very little debt outstanding, and

that its net assets increased by $7.6 million, or 18%, since 2011, and that its viability ratio in 2015 was 6.9:1. Mr. Kosier stated that after the proposed bond issuance, Bank Street’s pro-forma viability ratio will be 0.8 to 1 and that it expects to have a projected debt service coverage ratio greater than 2:1 over the next five years.

Ms. Shapard inquired whether the savings analysis is based upon not extending the

maturity of bonds and Mr. Kosier replied in the affirmative. She asked whether staff had examined the level of savings based upon an extension of the maturity date. Mr. Kosier stated that any extension of maturity will depend upon the results of the tax analysis. He stated that there will still be present value savings even if the maturity is extended. In response to a question from the Chair, Mr. Kosier stated that BankUnited, N.A. has ordered an appraisal in connection with the real property that will be mortgaged as security for the Series 2016 Bonds.

Ms. Shapard moved the adoption of the following entitled Resolution:

A RESOLUTION OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) AUTHORIZING STAFF AND BOND COUNSEL TO PROCEED TO TAKE THE NECESSARY ACTION TO PREPARE THE APPROPRIATE DOCUMENTS TO PROVIDE FOR THE FINANCING OF FACILITIES FOR BANK STREET COLLEGE OF EDUCATION

Ms. Snyder seconded the motion and the Resolution was unanimously adopted. New York Institute of Technology

Mr. Ostrander presented the Credit Summary and Staff Report recommending the issuance of one or more series of tax-exempt and/or taxable, fixed and/or variable rate bonds in an amount not to exceed $55,000,000 on behalf of New York Institute of Technology (“NYIT”). He informed the Members that this will be NYIT’s first bond issuance through DASNY since 1967. Mr. Ostrander stated that NYIT operates two primary campuses in the metropolitan New York area: a campus in Old Westbury, Nassau County, and a campus in Manhattan at 61st Street and Broadway. He further stated that NYIT also operates programs in Canada, China and the United Arab Emirates.

Mr. Ostrander stated that the proceeds of the Series 2016 Bonds will be used to refinance

all or a portion of NYIT’s Series 2000 Bonds issued by the Nassau County Industrial Development Agency and all or a portion of NYIT’s Series 2000A Bonds issued by the Suffolk County Industrial Development Agency. He further stated that it is currently anticipated that all of the Series 2016 Bonds will be issued as taxable bonds. Mr. Ostrander explained that the Series 2000 Bonds were previously advance refunded and therefore would not be eligible for a second advance refunding using tax-exempt proceeds due to tax law limitations. He further explained that the taxable bonds will also offer NYIT additional flexibility with respect to the use of the facilities financed with tax-exempt proceeds from the Series 2000 and Series 2000A Bonds.



Mr. Ostrander informed the Members that assuming current market conditions, a total net present value savings of approximately $1.4 million is expected as a result of the proposed issuance. He stated that the proposed issuance will also reduce NYIT’s total long term debt by approximately $11.2 million and will allow NYIT to shorten the final maturity of the Bonds by two years without increasing annual debt service. Mr. Ostrander further stated that NYIT is currently rated Baa2 by Moody’s and BBB+ by Standard & Poor’s, and as such, the Institute qualifies for an unenhanced borrowing under DASNY’s current Financing Guidelines for Independent Institutions. He noted that in accordance with the Guidelines, payment of debt service on the Loan Agreement will be secured by a pledge of revenues of NYIT and a mortgage on real property acceptable to DASNY. Mr. Ostrander further noted that the Loan Agreement between DASNY and NYIT will also contain certain financial covenants. He stated that no debt service reserve fund will be required.

Mr. Ostrander stated that NYIT currently offers undergraduate, graduate, and

professional degrees in more than 50 fields of study including architecture, education, and the health professions. He explained that through these programs, NYIT attracts a large contingent of international students, which account for approximately 30% of total enrollment and 20% of enrollment on the New York campuses. Mr. Ostrander reported that the Institute has experienced declining undergraduate enrollment in recent years. He stated that the decline is primarily the result of increased competition for students at the New York campuses, as well as the closure of two international campuses in Jordan and Bahrain. Mr. Ostrander noted that these programs enrolled a total of 1,500 students.

Mr. Ostrander reported that graduate enrollment at NYIT has improved in each of the last

three years, with increased demand in business and engineering programs as well as health professions. He stated that graduate enrollment includes the Institute’s medical school, the College of Osteopathic Medicine (“COM”). Mr. Ostrander noted that this is one of the largest medical schools in the United States with over 1,200 students. He informed the Members that NYIT expects to open a second COM site located at Arkansas State University in August 2016, which is expected to enroll 460 students when operating at full capacity. Mr. Ostrander emphasized that these new programs and the continued recruitment of international students will be key factors to growing enrollment at NYIT. He stated that NYIT has a history of strong operations, posting operating surpluses in four of the last five years. He informed the Members that operating margins have averaged $7.7 million annually since fiscal year 2011. Mr. Ostrander stated that the Institute’s debt coverage levels for the last five years have been strong, averaging 3.0:1 annually. He further stated that the NYIT administration has controlled costs and continued to provide the Institute’s programs in light of the loss of revenue due to lower enrollment.

In response to a question from Ms. Snyder, Mr. Ostrander stated that the proceeds of the

Series 2016 Bonds will be utilized for refinancing purposes. Ms. Snyder asked for additional details regarding the not-to-exceed amount in relation to the debt to be refunded. Mr. Ostrander explained that the par amount of the Series 2016 Bonds will be slightly less than $50,000,000. He further explained that the Institution is contributing approximately $10,000,000 in equity, and that approximately $6,000,000 will be released from the debt service reserve funds established in connection with the issuance of the IDA bonds. Ms. Shapard observed that the last two transactions have involved the refunding of IDA bonds and inquired whether there was a particular reason why NYIT selected DASNY for this issuance. Ms. Lee responded that with



respect to NYIT, issuing a single series of bonds through DASNY to refund two series of bonds issued by two separate issuers resulted in certain efficiencies. She noted that the change to DASNY’s Financing Guidelines was helpful as well. Ms. Lee informed the Members that NYIT considered many options over a long period of time before deciding on a DASNY issuance.

Ms. Lee informed the Members that the changes to the DASNY Financing Guidelines

helped to make DASNY more competitive with the BuildNYC. She noted that the BuildNYC Program also imposes certain programmatic requirements upon borrowers. Ms. Lee further explained that although DASNY considers a range of financial issues when making the decision whether to issue bonds on behalf of a particular entity, BuildNYC considers a broader range of factors, including some that are operational in nature. Ms. Paden noted that the waiver of the Bond Issuance Charge (“BIC”) over the last couple of years has also helped to make DASNY more competitive with other issuers. Ms. Shapard stated that she was pleased to hear that the changes to the Financing Guidelines helped to bring this transaction to fruition.

Mr. Romski moved the adoption of the following entitled Resolution:

A RESOLUTION OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) AUTHORIZING STAFF AND BOND COUNSEL TO PROCEED TO TAKE THE NECESSARY ACTION TO PREPARE THE APPROPRIATE DOCUMENTS TO PROVIDE FOR THE FINANCING OF FACILITIES FOR NEW YORK INSTITUTE OF TECHNOLOGY Ms. Snyder seconded the motion and the Resolution was unanimously adopted. NYSARC, Inc. (TELP)

Ms. Lee presented a Memorandum recommending a lease of equipment pursuant to DASNY’s Tax Exempt Leasing Program II (“TELP II”) in a total amount of $20,000,000 for NYSARC, Inc. She reminded the Members that the current policy of the Public Authorities Control Board (“PACB”) requires that TELP II leases which exceed $10 million in a calendar year be presented to both the DASNY Board and the PACB for approval. Ms. Lee stated that this is NYSARC’s first loan transaction this calendar year. She further stated that the lease proceeds will be used to purchase equipment for various NYSARC chapters.

The Chair informed the Members that, as reported at yesterday’s Finance Committee

Meeting, more specific information about the equipment to be leased will be known prior to each lease transaction and DASNY will be provided with a more detailed list of the equipment to be financed with each lease.

Mr. Abel moved the adoption of the following entitled Resolution:

A RESOLUTION OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) AUTHORIZING STAFF AND BOND COUNSEL TO PROCEED TO TAKE THE NECESSARY ACTION TO PREPARE, AND THE DORMITORY AUTHORITY TO EXECUTE ONE OR MORE MASTER LEASE AND SUBLEASE AGREEMENTS AND ANY OTHER APPROPRIATE DOCUMENTS TO MAKE EQUIPMENT HAVING A VALUE IN EXCESS OF $10,000,000 AVAILABLE TO NYSARC, INC. UNDER THE TAX-EXEMPT LEASING PROGRAM



Mr. Swierczewski seconded the motion and the Resolution was unanimously adopted.

Audit Committee Report

Audit Committee Chair Gardner reported that the Audit Committee met the previous afternoon to review DASNY’s audited Financial Statements for the year ending March 31, 2016. He stated that the Committee also reviewed DASNY’s Annual Investment Report and the Annual Report required by the Authorities Budget Office in accordance with the Public Authorities Accountability Act. Mr. Gardner further stated that the Committee was very pleased with results of the audit, as well as with the presentations of Ms. Nadeau, KPMG, and BCA Watson Rice. He informed the Members that the Audit Committee Members voted unanimously to approve the audited Financial Statements and to recommend that the full Board also approve the audited Financial Statements. Mr. Gardner further reported that the Committee Members decided unanimously to recommend that the full Board approve the Annual Investment Report and the annual ABO Report. He then asked Ms. Nadeau to discuss the annual audit.

Ms. Nadeau informed the Members that an Executive Summary section has been added

to the Management's Discussion & Analysis in order to highlight certain notable events. She stated that DASNY’s client base grew over the past year and DASNY experienced a record breaking year in terms of debt issuance. Ms. Nadeau reported that last year’s issuance exceeded the prior record set in 2009 by almost $1,000,000,000. She then provided an overview of the impact of certain changes to accounting rules that were enacted over the past year relating to pension costs. Ms. Nadeau noted that as a result of the implementation of these new rules, no comparative statements were included, as in the past. She explained that after discussion with the auditors and others, it was determined that providing a comparison of the last two years would not yield useful information and therefore only the results for fiscal year 2016 have been provided.

Ms. Nadeau stated that GASB has implemented certain changes in connection with the

way in which pension obligations are reflected on the books. She explained that in prior years, DASNY paid the contribution required for its participants in the pension plan after notification from the State Retirement System and recorded the payment as an expense. Ms. Nadeau stated that once the contribution was paid, no liability was reflected. She informed the Members that under the new rules, the future pension liability is calculated for each individual participant for services performed to-date, net of the value of funds set aside in trust to pay for these obligations. Ms. Nadeau stated that the implementation of this change resulted in a reduction of DASNY’s pension expense for the year. She noted that as a result of this change, DASNY restated its beginning unrestricted net position, increasing it by approximately $1,000,000.

Ms. Nadeau then discussed DASNY’s Annual Financial Statements for the Fiscal Year

2015-2016. She reported that the Financial Statements reflect a loss of $45.7 million, primarily due to restricted funds associated with conduit debt issuances and transfers to escrows associated with the early redemption of debt. Ms. Nadeau informed the Members that $1.4 million of the loss relates to DASNY internal operations. She acknowledged that this loss differs from the information provided to the Members in March, when a favorable year end position was projected. Ms. Nadeau explained that two factors resulted in the change. She stated that the first relates to the expenses recorded as retirement benefits other than pensions. Ms. Nadeau



explained that total liability is allocated between DASNY’s public and private clients, with the private clients' portion impacting earnings. She stated that for 2016, the final allocation rate to private clients was 13.5%, a 0.9% increase from what was reflected in the earlier calculation, and which resulted in an additional expense of $1.4 million.

Ms. Nadeau reported that the second factor leading to the loss was due to a higher

amount of employee time being spent on certain New York State Initiatives than anticipated in March and for which there is no appropriation or other mechanism to pay these expenses. She stated that the loss from these unsupported State initiatives is approximately $2,000,000. Ms. Nadeau informed the Members that DASNY was essentially break even for construction management activities. She explained that this result is to be expected, since DASNY bills its construction client agencies at cost, and these entities have appropriations or other sources of funds to pay DASNY. Ms. Nadeau reported that DASNY was also essentially break even for debt issuance and bond administration activities. She stated that as a result of these breakeven results for both of DASNY’s primary lines of business, the organization was unable to cover the costs associated with the employee time spent on unsupported New York State initiatives. Ms. Nadeau noted that these initiatives were previously covered by surpluses generated from bond issuance programs.

Ms. Nadeau detailed some of the factors that contributed to DASNY’s record year for

debt issuances. She reminded the Members that DASNY issued over $8,000,000,000 of debt, which was $3,500,000, or 75% higher than in 2015. Ms. Nadeau stated that over 40% of this amount was attributable to refunding activities, and that two private clients were primarily responsible for this increase.

Ms. Nadeau stated that in terms of overall distribution, DASNY continues to undertake

more issuances for its public clients than private clients. She further stated that this year, 68% of DASNY issuances were for public clients, which represents a reduction from the prior year, when 86% of issuances were for public clients. Ms. Nadeau reported that $6.6 billion of debt was retired in 2015-2016 and that 55% of that amount was refunded by new DASNY bonds. She noted that the lower interest rates made it advantageous for private and public clients to undertake refunding activities. Ms. Nadeau informed the Members that as of the fiscal year end, DASNY had approximately $47.3 billion in bonds outstanding. She stated that this figure represents an increase of $1.6 billion from 2015. Ms. Nadeau further stated that the ratio between public and private clients remained unchanged, with 68% of the outstanding balance related to public clients, as compared to 66% in 2015.

With respect to DASNY’s construction project management line of business, Ms. Nadeau

reported that there was approximately $3,100,000,000 of construction disbursements for both certified construction disbursements and DASNY-managed construction projects. She informed the Members that both categories of expenses contributed equally to the overall decrease from 2016. Ms. Nadeau noted that total construction and loan disbursements were approximately $300 million lower in 2016 as compared to the prior year. She stated that in terms of client distribution, the overall portion attributable to DASNY’s public clients remained consistent between 2015 and 2016 at 88% of the total construction disbursements. Ms. Nadeau informed the Members that increases of approximately $1.6 billion each in assets and liabilities were driven by net increases in bonds outstanding and related leases and loans receivable. She stated that total investment balances were approximately $3.7 billion at the end of 2016, a slight



decrease from 2015. Ms. Nadeau explained that these investments are primarily related to funds invested for construction projects and grant programs financed directly or indirectly with the proceeds of DASNY-issued bonds and funds invested for future debt service obligations. She further explained that the slight decrease of $100 million in the overall investment balance level was due to an increase in funds from new money bond issuances, which was more than offset by reductions in debt service obligations and debt service reserve funds.

Ms. Nadeau expressed her appreciation to the individuals in the Finance Department who

helped to make the issuance of the Auditor’s unmodified opinion possible. She noted that while on the surface, the financial statements may appear very straightforward, the underlying financial records are extremely voluminous and complicated. Ms. Nadeau stated that the Finance staff maintains DASNY’s books and records accurately and provides the necessary support to DASNY’s independent auditors to ensure that DASNY continues to have unmodified opinions. She thanked Karen Seiter, Assistant Director, Accounting and Financial Reporting; Karma Sees, Assistant Director, Financial Management; Kim Ellis, Assistant Director, Investments; Heidi Lenge, Assistant Director, Accounts Payable; and Geoff Arnold, Budget Manager for their contributions to the Finance Department generally and with respect to the success of the annual audit. Ms. Nadeau also thanked KPMG and BCA Watson Rice for their assistance in making her first DASNY audit so smooth. She then asked Mr. Driscoll to discuss the Auditor’s Report to the Audit Committee in greater detail.

Mr. Driscoll informed the Members that the audit team delivered a full and robust report to the Audit Committee the prior day, and that he would summarize the highlights of that report for the Members. Mr. Driscoll directed the Members’ attention to page 7 of KPMG’s Report to the Audit Committee, which outlines the scope and the deliverables of the engagement with DASNY. He summarized that the Audit team will issue an Independent Auditors’ Report on DASNY’s Basic Financial Statements, as well as a Report on Supplementary Information, a Report on Internal Controls over Financial Reporting and Compliance and Other Matters Based on the Financial Statement Audit, a Report on DASNY’s Compliance with the Requirements of Section 201.3 of title Two of the Official Compilation of Codes, Rules, and Regulations of the State of New York, and Required Communication to the Audit Committee, as mandated under Professional auditing standards. He noted that these would all be dated today and that unmodified opinions would be provided. Mr. Driscoll stated that over the summer, the auditors would be issuing reports on the financial statements for 45 individual bond issues and other materials, including DASNY’s Annual Report, to verify that there is no conflict with DASNY’s Financial Statements.

Mr. Driscoll confirmed that the accounting policies are generally consistent with prior years, with the exception of changes resulting from the adoption of GASB 68, which was previously described by Ms. Nadeau. Mr. Driscoll informed the Members that there were no transactions identified through the audit that were deemed to be both significant and unusual or that lacked authoritative guidance or consensus. He stated that as part of the audit, the auditors reviewed Management’s judgments and assumptions relative to significant accounting estimates; the valuation and collectability of leases and loans receivable; OPEB liabilities as set forth in the financial statements and required supplementary information; the valuation of interest rate SWAPS; and certain accrued liabilities such as construction costs not billed at year end. Mr. Driscoll stated that these judgments and assumptions appeared to be reasonable.



Mr. Driscoll summarized that there were no proposed uncorrected or corrected audit adjustments identified in the audit; no material weaknesses or significant deficiencies in internal control over financial reporting were identified; and that the team was not aware of any consultation by Management with any other accountants during the current year. He further stated that there were no disagreements with Management, nor did the team encounter any significant difficulties while completing the audit. Mr. Driscoll stated that there are no unresolved reporting or accounting issues, and the only significant written communications with Management were the engagement letters executed at the beginning of the audit and Management’s Representation Letter which is expected today. He confirmed that the KPMG audit team is independent with respect to DASNY.

Mr. Gardner remarked that the amount of money that flows through DASNY, coupled with the size of transactions undertaken, is truly staggering. He stated that he appreciates all of the hard work involved on the part of DASNY staff and the auditors in undertaking the audit, as well as the very clear presentation provided to the Audit Committee. He thanked all those involved.

The Chair agreed with Mr. Gardner, and thanked Mr. Gardner for his role as Chair of the Audit Committee. He stated that he appreciates the thorough work undertaken by KPMG and indicated that he is happy to have them as DASNY’s external auditor. The Chair expressed his gratitude to Ms. Nadeau for her work. He informed the Members that he is impressed with her ability to develop such a deep understanding of the DASNY organization, especially in the short period of time she has been leading the Finance Division as Chief Financial Officer.

Ms. Snyder moved the adoption of the following entitled Resolution:

A RESOLUTION OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) ADOPTING THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016

Ms. Shapard seconded the motion and the Resolution was unanimously adopted.

Mr. Gardner informed the Members that the Audit Committee had discussed the Annual Investment Report at yesterday’s Audit Committee Meeting and recommended full Board approval. The Chair complimented Ms. Nadeau for the detailed and comprehensive presentation provided to the Audit Committee.

Mr. Johnson moved the adoption of the following entitled Resolution:

A RESOLUTION OF THE MEMBERS OF THE BOARD OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) APPROVING THE DORMITORY AUTHORITY ANNUAL INVESTMENT REPORT FOR THE FISCAL YEAR ENDED MARCH 31, 2016 INCLUDING THE INVESTMENT POLICY AND GUIDELINES

Ms. Shapard seconded the motion and the Resolution was unanimously adopted.

The Chair informed the Members that the President provided a detailed presentation at yesterday’s Audit Committee Meeting regarding the Public Authorities Accountability Act



Annual Report. The President then highlighted certain provisions of the Report for the full Board. He stated that, while DASNY achieved tremendous success in fiscal year 2016 and there was significant growth in both public and private transactions, DASNY continues to respond to a number of challenges in various areas. The President informed the Members that DASNY continues to respond to narrow spreads between tax-exempt and taxable bonds, as well as rising competition, by better aligning its Financing Guidelines and policies to market demands. He reminded the Members that DASNY also changed its fees to make DASNY more attractive to private clients.

The President stated that on the Construction side, DASNY continues to strive to maintain a competitive cost structure to reflect the shift from large, complex projects to smaller ones. He further stated that DASNY continues to manage costs and create efficiencies throughout the organization in order to remain competitive. Regarding MWBE compliance, the President reported that DASNY achieved an overall 25 percent MWBE utilization rate over the past fiscal year. He reminded the Members that the vast majority of these results are based on contracts awarded when the MWBE participation goal was 20 percent. The President explained that as these older contracts are completed and those that carry Governor Cuomo’s 30 percent utilization goal become the majority, the utilization percentage is expected to climb. He noted that the new goal has been implemented for recent contracts entered into by DASNY.

Ms. Shapard moved the adoption of the following entitled Resolution:

A RESOLUTION OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) APPROVING THE PUBLIC AUTHORITIES ACCOUNTABILITY ACT ANNUAL REPORT FOR THE FISCAL YEAR ENDED MARCH 31, 2016

Mr. Abel seconded the motion and the Resolution was unanimously adopted. President’s Report

The President informed the Members that this month marked his one year anniversary as the first DASNY President and CEO to be confirmed by the New York State Senate. He stated that DASNY has many accomplishments to be proud of, including recognition by The Bond Buyer and Reuters as the top bond issuer in the nation for 2015. The President further stated that DASNY broke a fiscal year financing record with approximately $8.3 billion issued in Fiscal Year 2016. He reported that DASNY recently completed the $700,000,000 CCNY-ASRC project, which is the highest value construction project in its history, and surpassed Governor Andrew Cuomo’s 30 percent MWBE contracting goal on the New York State Office of Mental Health’s $350 million Bronx Behavioral Center.

The President reminded the Members that DASNY’s Financing Guidelines and related policies were changed to provide clients with greater speed, certainty and flexibility in the financing process. He explained that these changes were part of a broad initiative to be more responsive to the needs of DASNY’s clients. The President stated that he and members of the Public Finance team worked with DOH to expedite requisitions for bond proceeds. He informed the Members that the organization has been streamlined in order to create efficiencies. The President explained that the realignment combined the Opportunity Programs Group, which handles MWBE contracting, with the Procurement Unit in order to form the Resource



Acquisition Unit within the Construction Division. He further explained that with this change, MWBE procurement becomes a focus prior to contract execution and remains a focus through the life of a contract. The President noted that in order to support this change, approximately 300 DASNY staff members in the Construction Division, Accounts Payable Unit and Opportunity Programs Group were trained on updated procurement procedures designed to increase MWBE contracting participation.

The President stated that over the past year, he has discovered the great impact that

DASNY has across the entire State. He explained that DASNY is supporting Governor Cuomo’s economic development strategy by financing and constructing world-class research centers at Columbia, NYU and CUNY, where scientists are making ground-breaking advances in medicine and technology. The President stated that the low-cost financing DASNY provides to hospitals, nursing homes and other organizations is enabling the transformation of health care delivery. The President informed the Members that DASNY’s work with the Governor’s Office of Storm Recovery and other agencies is preparing communities for increasingly powerful storms. He stated that DASNY delivered financing and construction services at every level of the educational system in order to help make New York State students among the best educated in the world. He thanked DASNY’s nearly 500 committed employees for making these successes possible. He assured the Members that he will work just as hard next year to continue to deliver programs to benefit New York State at the highest level. The President stated that in furtherance of its public mission, DASNY continues to do all that it can to equalize opportunity for all New Yorkers and that DASNY will remain a leader in this area. He further stated that in order to support this mission, DASNY hosted MWBE networking events for approximately 300 attendees on May 24, 2016 in Albany and on June 7, 2016 in New York City. The President explained that these events provided MWBEs with the opportunity to meet with DASNY staff and its team of architectural and engineering term consultants. He noted that DASNY’s term consultants have been informed that working with MWBE firms is required in order to do business with DASNY. The President reported that he addressed the New York Building Congress’s Public Sector Committee and the American Council of Engineering Companies. He stated that he informed them that as the nation’s number one issuer of municipal bonds and one of its biggest public builders, it is likely that they have or will be working on either a DASNY-managed project or one that is financed through DASNY. The President stated that he discussed Governor Cuomo’s record $100 billion investment in infrastructure and development, and then focused on DASNY’s almost $6 billion construction pipeline. He noted that he also reinforced the importance of MWBE contracting. The President provided a brief summary of the activities of the various DASNY business units. He informed the Members that DASNY’s Specialized Services and Client Solutions Division continues to work on enhancing DASNY’s technology. The President stated that on May 24, 2016, DASNY’s Technology Steering Committee met to discuss technological improvements that will increase efficiencies across DASNY, including upgrades to DASNY’s desktop office and computer operating systems. The President stated that earlier this month, DASNY completed an $829 million financing for New York University, which is the largest offering for a private client in DASNY’s



72-year history. He reported that the financing was very well received by investors and as a result, the pricing was accelerated into one day instead of two. The President stated that the financing includes $200 million to support the NYU School of Medicine’s Langone Science Center, which is a component of the rising scientific research corridor in New York City that DASNY is either constructing or financing. He further stated that the corridor also includes Columbia University’s Jerome L. Greene Science Center, which was part of a $390 million financing transaction that closed in April 2016. The President informed the Members that CUNY’s Advanced Science Research Center is a leader in this research corridor and that DASNY provided both construction and financing services in connection with this project. He noted that these projects will lead to breakthroughs in medicine and technology that will drive New York’s economy for years to come. The President stated that a press release on the NYU financing was covered by The Bond Buyer and Crain’s. The President stated that DASNY’s ability to attract new clients is a sign that the steps taken to be more responsive to client needs are working. He pointed out that financings for two new clients, Bank Street College of Education and the New York Institute of Technology, were approved by the Board today. Public Finance and Portfolio Monitoring Report Ms. Lee stated that since her last written report, DASNY has priced transactions for Pratt Institute, NYUHC, New York University, the School District new money deal and the School District refunding. She provided a brief market update. Ms. Lee reported the Federal Government decided to leave interest rates unchanged and that concerns over global growth and whether Great Britain will leave the European Union. She further reported that last week marked the 37th consecutive week of inflows into the municipal market and that this week’s supply is in excess of $9.5 billion. She stated that there is strong demand and that bonds are repricing at lower yields. Ms. Lee further stated that the current one-year AAA MMD is .58%; the ten-year AAA MMD is 1.49% and the 30-Year AAA MMD is 2.19%, as compared to .56%, 1.56% and 2.48%, respectively, at the May Regular Meeting. Annual Bond Sale Report Ms. Lee directed the Members’ attention to the Annual Bond Sale Report for Fiscal Year 2015-2016 and the Annual TELP Report for 2015-2016. She explained that the Annual Bond Sale Report provides information both generally as well as with respect to individual bond sales, and that the presentation synthesizes the data from the individual bond sales and provides the cumulative results, by sector, in summary form. Ms. Lee noted that the first quarter of last year was exceptionally busy. Ms. Snyder inquired as to the reason for this, and Ms. Lee responded that to some extent the refinancing activity is dependent upon when the original bonds to be refunded were issued. She noted that historically, the first quarter does tend to be busy, especially when rates are low and clients have capital needs. Ms. Snyder inquired whether the volume for next year is expected to continue the pattern. Ms. Lee responded that the volume of advance refundings has been heavy and may affect the transactions to be refunded next year. She noted that staff reviews the outstanding portfolio on a regular basis in order to identify refunding opportunities.



Ms. Lee highlighted some of the trends illustrated by the Report. She informed the Members that the DASNY was the top bond issuer in the Country for 2015 according to the Bond Buyer. She noted that the number in the Bond Buyer listing is based upon the par amount of bonds issued per calendar year, and that the numbers set forth in DASNY’s Bond Sale Summary report are based on the fiscal year. She noted that DASNY issued approximately $8.3 billion in the last fiscal year in 28 financings. In response to a question from the Board Chair, Ms. Lee stated that DASNY has not received any feedback indicating confusion over the Bond Buyer’s reporting of DASNY financing activity over the calendar year as compared to the fiscal year. Ms. Lee stated that DASNY undertook ten financings totaling approximately $5.6 billion on behalf of public clients and 18 financings totaling approximately $2.7 billion on behalf of private clients. She noted that only the School District transaction utilized municipal bond insurance. Ms. Lee informed the Members that the low interest rate environment fueled a great deal of refunding activity. She stated that the changes to DASNY’s Financing Guidelines to authorize private placement transactions have been very beneficial to both large and small institutions and enable DASNY to reach a broader range of entities.

Ms. Lee reported that DASNY undertook 13 lease transactions totaling $236 million pursuant to the TELP Program, and that the report reflects transactions over and under $10 million. She noted that the Board is only required to approve TELP leases in excess of $10 million. Ms. Lee thanked the staff in the Public Finance, Portfolio Monitoring, and Finance Departments, as well as Counsel’s Office, for their work on all of the transactions over the course of a very busy year. She also thanked Sharon Pieronek, Financial Analyst, and Lynn Richard, Administrative Assistant, of her staff, for their work in producing the Report. Ms. Lee also noted that there is a slight discrepancy between the Resolution which references the Annual Bond Sale Report and the title of the printed report which is the Annual Bond Sale Summary Report.

Mr. Swierczewski moved the adoption of the following entitled Resolution: A RESOLUTION OF THE MEMBERS OF THE BOARD OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) APPROVING THE DASNY ANNUAL BOND SALE REPORT FOR THE FISCAL YEAR ENDED MARCH 31, 2016 Mr. Gardner seconded the motion and the Resolution was unanimously adopted. Ms. Lee directed the Members’ attention to the memorandum in the Board Book regarding the Health Care Management Consultant Panel. She stated that DASNY issued a Request for Proposals in February 2016 for health care management consultants. Ms. Lee explained that DASNY is empanelling firms with expertise in various areas including interim management, restructuring, revenue cycle reviews, governance and other disciplines. She stated that while DASNY could use any of these consultants to assist DASNY, the primary purpose of the panel is to have qualified entities available to assist health care clients in certain circumstances. Ms. Lee informed the Members that 18 of the 24 firms that applied were selected to be on the panel and that a brief description of each is provided in the memo.



In response to a question from Mr. Romski, Mr. Volk stated that the list of empanelled firms is provided to clients upon request. He further stated that when a client breaches a financial covenant and is required to retain a health care management consultant, the list is provided to help the client choose a qualified entity. Mr. Volk noted that in the event a client wishes to retain a consultant not on the list, the consultant must go through an approval process. Ms. Shapard inquired as to MWBE representation on the panel. Mr. Volk stated that there are fewer MWBE firms represented last year than in the past, but that some of the non-MWBE firms on the list work regularly with MWBE firms. He explained that there has been a great deal of consolidation in the industry and that the impacts of the 2007-2008 recession are still affecting this line of business. President’s Report (cont.)

The President reported that with respect to the Finance Division, DASNY’s operating reserves were essentially unchanged for the month. He stated that April expenses were slightly below budget, primarily due to the timing of office infrastructure costs related to computer services and equipment.

The President informed the Members that in May 2016, he joined with DASNY’s

construction team to formally cut the ribbon on CUNY’s Advanced Science Research Center in Harlem, the largest dollar value project in DASNY history. He stated that he delivered remarks at the event to highlight the value of the work that will take place at ASRC and described the important role that DASNY is playing to create the rising research corridor that ASRC is leading in New York City. The President stated that DASNY issued a press release to highlight $33 million in upgrades at SUNY campuses throughout New York State to be completed prior to the beginning of the Fall 2016 semester. He stated that the press release was well received on social media and that retweets of the release reached over 22,000 Twitter accounts.

Construction Report Mr. Curro directed the Members’ attention to the photograph on the cover of this month’s Construction Projects Report. He stated that the picture depicts the kitchen renovation project at Queeensboro Community College. Mr. Curro informed the Members that design of the $12,000,000 enclosure of external courtyard café space began in January 2011 and construction was completed in May 2016. He stated that the project presented some unique challenges, as it required the installation of steel roof trusses in occupied space and also required noise mitigation as classes were in session close to the project site. Mr. Curro reported that construction expenditures through May 30, 2016 were approximately $26 million, compared to $52 million the prior year. He then provided a brief update on several construction projects. He stated that the Bernard Fineson project is expected to be completed in late July or early August. Mr. Curro informed the Members that he visited the site last week, and that only finish work, inspections, and testing remain to be completed. Mr. Curro stated that work on both buildings comprising the Court Officer’s Training Academy is proceeding. He further stated that the concrete floors have been placed in Building One, and that the M/E/P rough-in and framing are underway. With respect to Building Two, Mr.



Curro reported that the steel framing is in place and the next tasks to be completed are the concrete flooring and the roof completion. Mr. Curro informed the Members that all packages have been bid for the South Beach Psychiatric Center and that two have been awarded to date. He stated that two other packages are close to being awarded and that early site work has begun. Mr. Curro reported that next week marks the half-way point for the SUNY summer projects and that at this point it appears that all will be completed on time. He informed the Members that the highest priority security projects for NYCHA are moving to the Construction phase and that the purchase and installation of appliances is advancing. Mr. Curro stated that the remainder of the NYCHA projects continue to be analyzed from a scoping standpoint. President’s Report (cont.)

The President directed the Members’ attention to the Annual Procurement Report. He summarized that new awards to MWBE construction contractors increased in number from one to 14, with in value from $4 million to $17 million. The President stated that approximately one-third of DASNY’s new construction contract awards were issued to undertake energy performance projects for CUNY and the Office of Mental Health. He noted that the contract value of approximately $87 million reflects these clients’ commitment to reducing energy use.

The President stated that there were two amendments made to the Procurement Contract

Guidelines this fiscal year. He further stated that the first was a technical amendment made in June 2015. The President explained that the amendment clarified requirements for the procurement of contracts for professional services by conforming Procurement Contract Guidelines to DASNY’s long term existing practice of selecting external counsel and independent auditors on a competitive basis, subject to Board approval as required by DASNY By-Laws.

The President stated that the second amendment relates to discretionary purchases. He

stated that in December 2015, the guidelines for discretionary purchases were amended to conform DASNY’s definition of a “small business” to the definition used by all state agencies, as well as the reporting threshold used by Empire State Development. The President explained that the Procurement Contract Guidelines must be reviewed and approved by the Board on an annual basis. He informed the Members that staff has reviewed the Guidelines and DASNY’s Procurement Policy and is not recommending any changes at this time. The President reported that staff also recommends the adoption of the resolution approving the Fiscal 2016 Procurement Contracts Report in order to fulfill DASNY’s compliance obligations pursuant to the Public Authorities Law.

Mr. Romski moved the adoption of the following entitled Resolution: A RESOLUTION OF THE MEMBERS OF THE BOARD OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY) APPROVING DASNY’S PROCUREMENT CONTRACT ANNUAL REPORT FOR THE PERIOD COMMENCING APRIL 1, 2015 AND ENDING MARCH 31, 2016, INCLUDING THE PROCUREMENT POLICY, PROCUREMENT CONTRACT GUIDELINES AND OTHER MATERIALS



Mr. Gardner seconded the motion and the Resolution was unanimously adopted. The Board Chair reminded the Members that the next Board meeting is scheduled for July 13, 2016, and the August meeting, if needed, will be held on August 3, 2016. He indicated that it is possible that a meeting subsequent to July 13 will be necessary, and suggested changing the July meeting to July 20, 2016 in lieu of an August meeting. The Board Chair stated that the Members will be consulted about this matter in the near future. Mr. Swierczewski noted that the PACB meeting is scheduled for 2:00PM on July 20. In response to a question from Ms. Snyder, the Board Chair stated that the July Board meeting would be held in the New York City Office. Ms. Shapard inquired whether any additional Board members will be appointed in the near future. The Board Chair stated that he was unaware of any action to appoint additional Members. He acknowledged that currently the Board is down three Members, and that additional attention needs to be paid to be sure that a quorum exists for upcoming meetings. General Counsel’s Report Mr. Cusack informed the Members that a memorandum summarizing the annual Project Sunlight training was included in the Board materials. He requested that the Members complete the training at their earliest convenience and email him, Ms. Drescher, or Diane Felitte, Legal Assistant, when they have done so. Mr. Cusack apprised the Members of a change to DASNY’s approved bond counsel panel. He stated that the firm of Sidley Austin LLP, which is on the panel, is no longer practicing in the area of public finance. Mr. Cusack further stated that the attorneys who formerly worked in the Public Finance department of Sidley Austin have moved to the firm of Norton Rose Fulbright US LLP. He reminded the Members that the Board has previously authorized DASNY to continue working with a new law firm where certain attorneys who have worked with a firm that is on DASNY’s approved bond counsel panel have moved to a new firm. Mr. Cusack noted that these situations are often beneficial to DASNY or its clients. He stated that a potential new DASNY client recently requested that DASNY utilize the firm of Norton Rose in connection with its transaction in order to assure continuity of the tax analysis undertaken by former Sidley attorneys who are now at Norton Rose. He noted that DASNY may also wish to consult with the attorneys at Norton Rose from time to time, as these attorneys have worked for DASNY on numerous issuances. Mr. Cusack pointed out that the Board recently approved of such a change for Seth Bryant, Esq. when he formed the firm of Bryant Rabbino LLP. Ms. Shapard asked whether there were alternatives to a Board resolution that would achieve the same result. Mr. Cusack responded that there is currently an active open procurement for the selection of outside counsel and that there is flexibility in the current procurement to make changes of this type. Ms. Shapard stated that she would recommend such a change only to the extent that it is consistent with prior actions and that all firms have the same opportunity. Mr. Cusack stated that staff considers each request on its merits, based upon the specific facts of each situation and the attributes of each law firm. Mr. Abel moved the adoption of the following entitled Resolution:



A RESOLUTION OF THE MEMBERS OF THE BOARD OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK (“DASNY”) APPOINTING AN ADDITIONAL FIRM TO THE BOND COUNSEL PANEL Ms. Shapard seconded the motion and the Resolutions was unanimously adopted. Mr. Cusack said that he would provide a legislative update to the Board at the next Regular Meeting. He informed the Members that one of the legislative initiatives relates to authorization for DASNY and the Department of State to utilize the New York City Building Code instead of the State Uniform Fire Prevention and Building Code to issue permits for the Javits Center construction project. Mr. Cusack noted that this effort is being led by Empire State Development in order to create efficiencies in using one code instead of two. The Chair asked Ms. Spann and Ms. Nadeau if they had anything to report to the Board beyond the information contained in each of their management reports. They both responded in the negative.

Ms. Shapard moved that the Members go into Executive Session to discuss the financial and credit history of particular corporations. Ms. Snyder seconded the motion and the Members went into Executive Session.

EXECUTIVE SESSION While in Executive Session, no action was taken other than that required to return to public session. PUBLIC SESSION

Ms. Snyder moved that the Meeting adjourn, Mr. Gardner seconded the motion and the

Meeting was adjourned at approximately 12:40 p.m.

Respectfully submitted,

Michael E. Cusack Assistant Secretary

Dormitory Authority Meeting June 22, 2016 The Dormitory ......Jun 22, 2016 · 1 . T:/MIN/2016/...

Documents

Transcript of Dormitory Authority Meeting June 22, 2016 The Dormitory ......Jun 22, 2016 · 1 . T:/MIN/2016/...