Mar 03, 2020 Finance Committee

[1. Certification of Notice Posted for the Meeting]

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2:34 P.M. THE FINANCIAL COMMITTEE OF THE BOARD OF TRUSTEES FOR THE DALLAS COUNTY COMMUNITY COLLEGE DISTRICT IN RICHLAND COLLEGIATE HIGH SCHOOL IS NOW IN SESSION.

THIS MEETING IS BEING HELD IN ACCORDANCE WITH CHAPTER 551 OF

>> I CALL TO ORDER THIS OPEN MEETING OF THE BOARD OF TRUSTEES OF THE DALLAS COUNTY COMMUNITY COLLEGE DISTRICT.

THIS MEETING IS BEING HELD IN ACCORDANCE WITH CHAPTER 551 OF THE TEXAS GOVERNMENT CODE AND IS BEING BROADCAST OVER THE INTERNET AS REQUIRED BY LAW. IT IS IMPORTANT TO UNDERSTAND THAT THE BOARD MAY NOT TAKE FORMAL ACTION ON MATTERS THAT ARE NOT PART OF THE MEETING AGENDA.

WE WILL PROVIDE AN OPPORTUNITY FOR PUBLIC COMMENT IN ACCORDANCE WITH THE TEXAS GOVERNMENT CODE. SPEAKERS SHALL ADDRESS THEIR PRESENTATIONS TO THE COMMITTEE CHAIR OR TO THE BOARD COMMITTEE AS A WHOLE. CHANCELLOR, WILL YOU PLEASE CERTIFY THAT NOTICE OF THE MEETING AND THE AGENDA ARE ON FILE IN THE OFFICE OF THE CHANCELLOR?

>> I CERTIFY THAT THE NOTICE FOR THIS MEETING WAS POSTED ACCORDING TO TEXAS GOVERNMENT CODE 551.054.

>> C. COMPTON: THANK YOU. DO WE HAVE CITIZENS DESIRING TO

[B. Discussion and Q&A on the P3 Conference and What’s Happening in the World of P3 Development Presenter: Mary Scott Nabors with Strategic Partners, Inc. (SPI)]

THREE, COMMITTEE PRESENTATIONS. WE'RE GOING TO -- IF YOU HAVE A COPY OF THE AGENDA, WE'RE GOING TO DO B FIRST.

DISCUSSION AND Q AND A ON THE P37 CONFERENCE.

AND -- P3 CONFERENCE. WHAT IS HAPPENING IN THE WORLD OF P3. MARY SCOTT NEIGHBORS WITH STRATEGIC PARTNERS INC. NABBERS.

-- LSU NICHOLSON GATEWAY AND PUBLIC/PRIVATE PARTNERSHIPS P3, CSRS. AND LAST WE WILL DO D.

BOND AND FINANCING PROGRAM. AND PRESENTER IS HILLTOP SECURITIES AND ESSTRAUGHTA HINOJOSA.

>> MARY SCOTT NABBERS WITH STRATEGIC PARTNERSHIPS INC.

SUNDAY THROUGH WEDNESDAY IS PROBABLY ONE OF THE BIGGEST P3 CONFERENCES IN DALLAS AT THE SHERATON.

MARY HAS TO GET BACK. SHE HAS A PANELIST ON MANY THINGS GOING ON THERE. I ASKED HER TO COME HERE WITH THE WORLD EXPERIENCE SHE HAS AND SEEN SO MUCH ON P3'S TO ET YOU A BACKGROUND ON WHAT SHE'S SEEN. I'M GOING A SHUT UP AND LET HER

GET GOING. >> LET ME TELL YOU WHO I AM SO YOU WILL KNOW. I WAS A OFFICER HOLDER N TEXAS FOR 10 YEARS. DURING THAT TIME I WAS IN DALLAS EVERY THIRD WEEK. DALLAS IS A COMMUNITY THAT I HAVE WATCHED FOR A LONG TIME. WHEN I HEARD A LITTLE BIT ABOUT THIS PROJECT, I COULD NOT HAVE BEEN HAPPIER.

AFTER I LEFT GOVERNMENT, I STARTED A COMPANY CALLED STRATEGIC PARTNERSHIPS. AND ALTHOUGH, THIS MAKES ME SOUND OLDER THAN I AM, IT'S 24 YEARS OLD.

WE WORK WITH SOME OF THE LARGEST GLOBAL CONTRACTORS IN THE WORLD.

WHO THROUGH BUSINESS -- WHO DO BUSINESS WITH GOVERNMENT.

LONG BEFORE THE P3 MOVEMENT. SINCE THEN ABOUT EIGHT YEARS AGO, I STARTED A BOOK AND THE BOOK, THE FIRST BOOK I WROTE WAS CALLED, ARE REVOLUTIONIZING HE BUSINESS OF GOVERNMENT.

THAT SORT OF LAUNCHED US INTO THE P3 WORLD.

JUST IN TEXAS I HAVE 80 CONSULTANTS OUT OF THE EXECUTIVE RANKS OF GOVERNMENT FROM CITIES AND COUNTY AND HIGHER ED AND COMMUNITY COLLEGES K-12. AND WE HAVE A RESEARCH TEAM AND SO WE'RE MONITORING PUBLIC/PRIVATE OPPORTUNITIES ALL ACROSS THE 50 STATES. I TELL YOU THAT TO SAY, THIS IS OUR UTURE. WHEN I REALLY STARTED REALIZING THAT, I STARTED THE SECOND BOOK. AND THE SECOND BOOK CAME UT TWO YEARS AGO. INSIDE THE INFRASTRUCTURE REVOLUTION. AND IT'S LITERALLY A GUIDE BOOK FOR REBUILDING AMERICA. AND I'M GOING TO MAKE THIS REAL

[00:05:02]

PUBLIC FUNDING IS NOT GOING TO BE ADEQUATE IN OUR LIFETIME FOR THE ROADS AND THE BRIDGES AND OUR POWER GRID AND OUR WATER SYSTEMS AND OUR UNIVERSITIES AND COMMUNITY COLLEGES AND OUR HEALTH CARE SYSTEMS. IT'S JUST NOT GOING TO BE THERE.

WE'RE $23 TRILLION IN DEBT. WE'VE GOT A PANDEMIC, WE'RE GOING TO HAVE TO SOLVE THIS YEAR.

WE HAVE A MILITARY BUILD UP. WE'LL BE MUCH HIGHER IN DEBT BY THE END OF THE ISYEAR. SO THE FUTURE IS THAT WONDERFUL COMMUNITY LEADERS LIKE YOU ARE GOING TO HAVE TO BE VISIONARY ENOUGH TO DO THINGS LIKE YOU ARE DOING.

WHAT I'VE HEARD ABOUT YOUR PROJECT, I THINK COULD SET YOU APART AND MAKE YOU THE SHOWCASE OF THE NATION.

I AM HOPING THAT YOU WILL GET IT OFF THE GROUND.

YOU WILL GET IT UP AND RUNNING AND IT WILL BE TREMENDOUSLY SUCCESSFUL. I SPEAK AT THE P3 CONFERENCES EVERY OTHER MONTH SOMEWHERE IN THE UNITED STATES.

AND I SPEAK ON EVERY ASPECTS OF IT.

HOW YOU PLAN IT, HOW YOU -- I THAT'S WHAT THE BOOK IS ABOUT.

AND I'LL BE GLAD TO SEND BOOKS TO ANY OF YOU WHO WANT THAT BOOK. IT'S LITERALLY JUST A TEXTBOOK.

HERE'S HOW YOU PLAN IT. HERE'S HOW YOU SELECT ADVISORS.

HERE'S HOW YOU DO OUR COMMUNITY OUTREACH.

IT'S EVERY STEP OF THE PROCESS ALONG THE WAY.

HERE'S HOW YOU CHECK TO MAKE SURE YOUR INVESTMENT MONEY IS COMING IN AT THE CORRECT RATE. IT'S VERYTHING.

WHAT I THINK I'M HERE TO DO TODAY IS TO SAY, ASK ME OME QUESTIONS. ANYTHING THAT I CAN TALK ABOUT THAT WILL HELP YOU, I'M GLAD TO DO SO.

>> C. COMPTON: AND I CANNOT REMEMBER THE PARTICULARS RIGHT NOW. EVEN WHEN I HEARD IT.

THERE HAS BEEN SOME CONTROVERSY, PARTICULARLY IN THE PUBLIC SECTOR ABOUT THESE P3 PARTNERSHIPS.

I HAVE HEARD SOME COMMENTS FROM DIFFERENT PEOPLE ABOUT COMPANIES ARE PRESELECTED. AND LOCKS OUT OPPORTUNITY FOR SMALLER FIRMS OR MINORITY OWNED FIRMED AND SO FORTH.

>> SURE. LET ME TELL YOU --

SPEAKERS] >> C. COMPTON: I HEARD IT FROM

AN OUTSIDE SOURCE. >> ANY PROCUREMENT PROCESS OF ANY KIND, THAT'S WHAT YOU HAVE TO WATCH.

BUT THE WAY YOU AVOID IT IS YOU, THE SOLICITATION DOCUMENT SAYS WE'RE GOING TO GIVE EXTRA POINTS FOR LOCAL CONTRACTORS.

WE'VE -- WE'RE GOING TO GIVE EXTRA POINTS FOR SMALL OR MINORITY BUSINESS OWNERS AND BUILD IT INTO THE PROCUREMENT DOCUMENT THAT GOES OUT. THERE IS ALWAYS SUSPICION ABOUT ANYTHING NEW. NORMALLY AND I THOUGHT WHAT YOU WERE GOING TO SAY YOU HEARD CONTROVERSY OVER PRIVATE MONEY COMING INTO PUBLIC ASSETS. THAT IS NORMALLY WHAT I HEAR.

>> C. COMPTON: THAT MAYBE IT. LIKE I SAID, I CAN'T REMEMBER --

>> WELL --

SOMETHING ABOUT THAT. >> IF WE HAD PLENTY OF PUBLIC FUNDING TO FIX OUR INFRASTRUCTURE TO KEEP US COMPETITIVE GLOBALLY, TO KEEP US SAFE AND PURE WATER AVAILABLE TO US, I WOULD SAY DON'T EVEN CONSIDER THIS.

BUT THERE IS AN ABUNDANCE OF PRIVATE SECTOR MONEY FROM NONPROFITS, FOUNDATIONS. IT'S COMING FROM REGIONAL BANKS.

IT'S COMING FROM EQUITY COMPANIES.

IT IS AVAILABLE IN ABUNDANCE. AND MANY OF THE LARGE GLOBAL CONTRACTORS NOW THEY ARE PUTTING IT THEIR OWN EQUITY MONEY INTO THOSE PROJECTS. THE ONLY THING YOU HAVE TO BE CAREFUL ABOUT IS DEVELOPING A REVENUE REPAYMENT MODEL THAT IS SOUND. AND THEN YOU ARE GOING TO HAVE LOTS OF COMPUTATION TITIAN -- COMPETITION. BECAUSE THE TREND IS SWEEPING THROUGH THE COMMUNITY COLLEGES NATIONALLY ALMOST MORE THAN ANY OTHER JURISDICTION.

THE REASON IS Y YOU ARE THE FUTURE.

THIS IS WHERE WE HAVE TO GET OUR FUTURE WORKERS THROUGH COMMUNITY COLLEGES. MANY STUDENTS START HERE AND MOVE ONTO THE MAJOR UNIVERSITIES AFTER THAT.

WITH THE POPULATION GROWTH IN TEXAS YOU ARE THE FRONT DOOR TO

OUR FUTURE. >> CHAIR D. FLORES: ARE THERE ANY DOWN SIDES TO PP PARTNERSHIPS?

[00:10:03]

>> YES, AND THE DOWNSIDE IS THAT PUBLIC OFFICIALS BY AND LARGE DON'T UNDERSTAND THEM WELL ENOUGH AND MANY ARE TIMID ABOUT THEM. THEY MAYBE VISIONARY BUT THEY WILL WAIT UNTIL ANYBODY SOMEBODY ELSE CHARGES THE HILL FIRST.

THE DOWNSIDES YOU DO HAVE TO LEARN ALL ABOUT IT.

THEY ARE COMPLICATED. THEY WILL BE VERY COMPETITIVE.

THEY WILL SET YOU APART. AND TAKE YOU ON A WONDERFUL JOURNEY BUT YOU HAVE TO DO IT RIGHT.

WHAT YOU WANT TO DO IS YOU ARE GOING TO HAVE TO HIRE ADVISORS SINCE YOU HAVE NOT DONE ONE. YOU WANT TO HIRE ADVISORS WHO HAVE DONE IT. LET ME TELL YOU WHAT I TOLD AN AUDIENCE YESTERDAY. I WAS TEACHING AN MBA CLASS AT THE UNIVERSITY OF TEXAS, LAST SATURDAY, A WEEKEND SESSION FOR THEM. ONE ATTORNEY FROM THE CITY WHO WAS THERE SAID, I'M NOT GOING TO HIRE OUTSIDE ADVISORS.

I'M AS SMART AS ANY ATTORNEY OUT THERE.

AND WE CAN DO THIS OURSELVES. AND I ASKED, HAVE YOU DONE IT BEFORE. HE SAID NO, I HAVEN'T.

BUT I DON'T NEED TO HAVE DONE IT BEFORE.

I SAID, HERE'S WHAT YOU HAVE TO REMEMBER.

IF YOU WERE A SWIMMER, A STRONG SWIMMER, MAYBE THE STRONGEST SWIMMER I HAD EVER MET AND YOU TOLD ME YOU WERE GOING TO SWIM THE ENGLISH CHANNEL. I WOULD SAY, IF I WERE YOU YOU I WOULD GET A COACH WHO THAT DONE IT AND CAN TELL YOU WHAT TO EXPECT, WHAT TO WATCH FOR. HOW TO TRAIN.

AND NO MATTER HOW STRONG THE SWIMMER WAS, I WOULD SAY DON'T SWIM THE ENGLISH CHANNEL WITHOUT SOME HELP.

I THINK YOU DO NEED ADVISORS. YOU NEED AN ADVISOR TO COME IN AND HELP YOU PUT THIS WHOLE PROJECT TOGETHER.

SO THAT YOU CAN ATTRACT GOOD PRIVATE SECTOR PARTNERS.

YOU NEED AN ADVISOR TO TELL YOU HOW TO LOOK AT ALL THE FINANCIAL OPPOSITIONS. YOU NEED A LEGAL ADVISOR BECAUSE YOU WILL WRITE A CONTRACT THAT WILL LAST 45 YEARS PROBABLY.

YOU CAN NARROW DOWN THEIR TASK AS SMALL AS YOU WANT TO.

BUT GET THEM ON BOARD. JUST TO COACH YOU THROUGH THIS

PROCESS. >> CHAIR D. FLORES: SO THAT'S ONE. BEFORE THE PROCESS STARTS.

WITH EVERYTHING IN PLACE THE BEST POSSIBLE WAY.

ONCE IT'S STARTED [INDISCERNIBLE] P3 IS GOING AND

BUILDING IS BEING BUILT. >> SURE.

BUT ONE OF THE MOST IMPORTANT THINGS YOU WILL HAVE TO DO IS GOING TO HAVE TO DEVELOP A CIVIC OUTREACH PLAN THAT EXPLAINS TO THE COMMUNITY AND INTERNAL AND EXTERNAL STAKEHOLDERS, TO BOARD MEMBERS, FAMILIES, CITIZENS, TAXPAYERS, THE MEDIA, ALL OF THEM HAVE TO BE MESSAGED TO ABOUT WHAT YOU ARE DOING, HAS O BE TRANSPARENT. AND YOU ARE GOING TO HAVE TO HAVE A POLITICAL CHAMPION AND A SECOND ONE IN CASE A TRUCK HITS THIS ONE OR SOMETHING. AND THEY ARE GOING TO HAVE TO BE YOUR MESSENGERS. AND YOU ARE GOING TO NEED TO DEVELOP A MESSAGE. AND HAVE THEM AS YOUR SPOKESPERSON. BUT HAVE AN UTREACH PLAN FOR THE COMMUNITY SO EVERYBODY UNDERSTANDS WHAT YOU ARE DOING.

THEN AS YOU GO ALONG, ANY KIND OF PROBLEM CAN COME UP.

BUT IF YOU ARE PREPARED FOR THEM, YOU HAVE BEEN MADE A LIST OF EVERYTHING THAT COULD HAPPEN AND HERE'S WHAT WE'LL DO ABOUT IT. THEN YOU RE GOING TO BE OKAY.

LET ME GIVE YOU AN EXAMPLE. IN AUSTIN, WE EXPANDED THE MOPED FREEWAY. THE EXACTOR DOING THAT WORK, THERE PRIVATE SECTOR PARTNER HIT A SNAG, NOT ONE THEY CAUSED BUT AN ENVIRONMENTAL PROBLEM THAT HAD TO SHUT THE PROJECT DOWN.

AND IT WAS OVERDUE, BEYOND TIMELINE.

BUT WHAT YOU HAVE TO REMEMBER IS, IT WOULDN'T HAVE MATTERED IN THE STATE HAD BEEN DOING THAT, IT WOULD HAVE BEEN THE SAME THING. SO THERE ARE ALWAYS, YOU KNOW, LAND M MINDS. WORKING WELL NOW.

IT'S MOST OF THE RISK GETS TRANSFERRED TO THE PRIVATE SECTOR PARTNER. IT'S THE SAFEST WAY TO DO A BIG PROJECT. QUESTION?

>> C. COMPTON: WHEN I WAS READING THE CSRS INFORMATION IN HERE, ONE THING THAT GAVE ME CONCERN WAS THIS COMMITMENT.

DO YOU HAVE SUPPORT FOR NONTRADITIONAL PROCUREMENT

[00:15:04]

AND -- >> YOU CAN --

>> C. COMPTON: REGULATIONS AND LAWS WE HAVE TO REQUIRE THAT, YOU KNOW, ALLOWS FOR EQUAL OPPORTUNITY FOR EVERYBODY AND SO FORTH. SO LET ME JUST PUT IT TO YOU LIKE THIS. I'M NOT GOING TO JAIL FOR YOU ALL. [CHUCKLING]

>> NOBODY WANTS TO GO TO JAIL. >> C. COMPTON: YOU KNOW.

IF YOU ARE BREAKING SOME PROCUREMENT LAW THAT, YOU KNOW,

THE STATE REQUIRES. >> SINCE I'M UP HERE.

LET ME SPEAK TO THAT QUICKLY. AND HE MAY WANTS TO SPEAK TO IT AGAIN. THIS IS NEWER AND I SUSPECT NONTRADITIONAL MEANS THIS IS A NEWER WAY OF DOING THINGS.

BUT EVERY JURISDICTION IN EVERY STATE IS NOW DOING THIS.

WE HAVE LEGISLATION IN TEXAS FOR OUR STATE AGENCIES TO DO THIS.

YOU DON'T HAVE TO HAVE ANY OVERSIGHT FROM THE STATE.

YOU HAVE THE AUTHORITY TO DO THIS.

AND THIS HAD BEEN VETTED THROUGHOUT THE COUNTRY.

IT IS NOT A MESSAGE TO DENY ANYONE THE RIGHT TO COMPETE FOR

THIS OR TO BE SELECTED. >> C. COMPTON: IT'S NOT WHAT?

>> WELL, IT IS A TOTAL OPEN PROCESS.

YES? >> CHANCELLOR MAY: IF MY -- THE STATE DID PASS LAW RELATIVELY -- RELATIVELY TO THIS, SPEAK TO THAT, ROB. AND IN ORDER TO PARTICIPATE WE HAD TO NIT -- SUBMIT A PLAN THE STATE OF TEXAS.

>> THAT'S GOVERNED BY THE TEXAS STATUTE, WHICH AUTHORIZES PUBLIC/PRIVATE PARTNERSHIPS. AND AS MS. NABBERS INDICATED TTTTTHEY ARE PROLIFIC. THEY ARE NEW.

THE TRADITIONAL PROCUREMENT PROCESS HAVE EXISTED IN STATUTE FOR A LONG TIME. THE PUBLIC/PRIVATE PARTNERSHIPS ACT IS RELATIVE NEW IN TEXAS. 1990-SOMETHING.

I DON'T REMEMBER THE DATE. THE POLICY, THE PROCEDURES DOMINATED PURSUANT TO THAT ARE CONSIST WITH THAT STATUTE.

SO A PUBLIC/PRIVATE PARTNERSHIPS THAT PASSES THROUGH THOSE PROCESSES THAT HAVE BEEN APPROVED BY THE BOARD AND PROCEDURES WE'VE ADOPTED WOULD BE IN FULL COMPLIANCE WITH THE

STATE LAW. >> C. COMPTON: DO YOU HAVE

ANYTHING ELSE? >> I WAS GOING TO ANSWER HIS

QUESTION. >> VICE CHAIR W. JAMESON: I HAVE SEEN, LET'S SAY MUNICIPALITIES GET IS IN PUBLIC/PRIVATE PARTNERSHIPS WITH A EVELOPER. ALSO THE CONTRACT IS RITTEN IN A WAY THAT LOOKS GREAT. EVERYBODY ON THE SAME PAGE.

THE DIVISION OF PROFITS, IF YOU WILL ARE GOING TO BE DONE ADMINISTRATIVE COSTS PILE UP. AND SUDDENLY OVER A COURSE OF 10 YEARS, THERE IS NOTHING GOING BACK TO THE PUBLIC ENTITY.

EVERYTHING HAS BEEN EATEN UP BY EXPENSES OR ADMINISTRATIVE COST.

ALTHOUGH THE CONTRACT IS WRITTEN IN A IRONCLAD WAY, THE ONLY RECOURSE IS TO SUE THE GUY OR SAY, LOOK, WE'RE GOING TO HAVE TO TAKE THIS BACK OVER. AND MAYBE IT'S NOT MAKING ENOUGH MONEY TO MAKE IT WORTHWHILE. SO EVERYTHING FALLS APART.

HOW DO YOU ENSURE IT WILL BE THE CONTRACT OR BY THE LANGUAGE OF THE PARTNERSHIP THAT YOU GET YOUR COVERING YOURSELF SO YOU AREN'T TAKING A LOSS YOU ARE NOT ANTICIPATING?

>> WE DO THAT WITH THE THE ONGOING CONTRACT.

THAT'S THE REASON YOU WANT SOMEONE TO WRITE THAT WHO HAS WRITTEN A CONTRACT THAT LASTS THAT -- LONG AND IS A PUBLIC/PRIVATE PARTNERSHIPS. IF THAT'S WRITTEN CORRECTLY, ALL THE ADVANTAGE GOES TO THE PROPERTY OWNERS AND THAT IS YOU.

YOU ARE THE OWNERS. YOU ARE GOING TO OWN EVERYTHING.

NOT LONG AGO IN TEXAS, A TOW ROAD GOT BUILT, TOLL ROAD.

COST THE STATE NOTHING. AND THE PRIVATE SECTOR PARTNER ENDED UP HAVING TO TAKE BANKRUPTCY BECAUSE THEY DEPENDED ON A DEMAND STUDY THE STATE HAD DONE.

ANOTHER PARTNERED STEPPED IN IMMEDIATELY AND NOTHING STOPPED.

THE STATE HAS A BEAUTIFUL HIGHWAY THAT IS THEIRS THAT TAXPAYERS DID NOT HAVE TO CONTRIBUTE TO.

THE STATE HAD NO LOSS WHATSOEVER.

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AND I'M NOT SEEING THAT HAPPEN. I ASSUME ANY CONTRACT COULD BE NOT A GOOD ONE. I HAVEN'T SEEN THAT.

>> VICE CHAIR W. JAMESON: IN THE QUALITY.

>> IT IS. THAT'S THE REASON I SAY YOU NEED PEOPLE WHO HAVE ONE THIS IN THE PAST WHO WILL PROTECT YOU.

QUESTIONS? I WOULD SAY LOOK AT THE COST OF NOT DOING ANYTHING. AND THAT'S YOUR OPTION.

AND YOU ARE HERE. YOU ARE SACRIFICING YOUR TIME AND EFFORT AND RESOURCES. DO SOMETHING.

WE NEED VISIONARY LEADERS IN THE COMMUNITY TO DO SOMETHING.

IT CAN BE DONE VERY, VERY SUCCESSFULLY.

>> CHANCELLOR MAY: THANK YOU. >> SURE.

I HOPE THAT HELPED. YOU HAVE GOT MY CARD.

I'LL BE GLAD TO ANSWER QUESTIONS IF YOU THINK OF THEM LATER.

GLAD TO DO THAT. >> CHANCELLOR MAY: WOULD YOU ALL

LIKE TO READ THE BOOK? >> YOU WANT A BOOK, WE'LL SEND

YOU A BOOK. >> CHAIR D. FLORES: THANK YOU SO

MUCH. >> THANK YOU FOR ALL OF YOUR

SERVICES. >> CLOSED SESSION NOW?

SOMEBODY HAD TO LEAVE AT 3733:2. >> C. COMPTON: I THOUGHT WE WERE GOING TO LET THEM DO THEIR PRESENTATION NEXT?

[A. LSU Nicholson Gateway - A Case Study In Public Private Partnerships (P3) Presenter: CSRS]

THAT DID THE NICHOLSON GATE WAY PROJECT.

TO GIVE PERSPECTIVE OF WHAT THEY DID FOR THEIR LSU BOARD, IMPACTS THEY HAD IS JUST MARY TALKS ABOUT THINGS AT A DIFFERENT LEVEL. THIS IS A HANDS ON PRESENTATION OF WHAT ACTUALLY WENT ON. TO BUILD QUITE FRANKLY ONE OF THE MOST BEAUTIFUL 3P3 DEVELOPMENTS IN AUATOR SETTING.

IT COULD BE SIMILAR TO SOMETHIN- >> CHANCELLOR MAY: JOHN, THE BOARD MAY NOT KNOW OR RELATIONSHIP TO CSRS.

>> THE PROGRAM MANAGER ON THE I.T., THE WHAT WE REFER TO AS I.T. AND POLICE I PUBLIC SAFETY PROGRAM.

AND THEN ALSO THE CONSTRUCTION SCIENCE BUILDING IN NORTH LAKE.

THEY HANDLE THOSE TWO MAJOR PROJECTS FOR US.

>> C. COMPTON: GENTLEMEN, LET ME APOLOGIZE.

I WAS NOT TRYING TO INVITE YOU ALL [INDISCERNIBLE]

>> I WAS WORRIED ABOUT THAT.

>> YES, MA'AM. >> CHAIR D. FLORES: THE MINORITY

BUSINESS ENTERPRISE BY CHANCE? >> NO, WE'RE NOT.

>>

TWO PARTNERS >> MY NAME IS ED JENKZ, PARTNERSHIP DIRECTOR FOR CSRS. STUART, THE P3 DIRECTOR.

AND CASEY ANDERSON, THE SENIOR PROJECT MANAGER.

ALSO HAVE IN THE AUDIENCE [INDISCERNIBLE] DEPUTY PROGRAM DIRECTOR WITH US ALSO. I'LL TURN IT OVER TO STEWART.

HE'LL COVER THE SCIENCE OF P3. AND ALSO THE PROS AND CONS.

AND THEN KATY LSU NICHOLSON GATEWAY PROJECT.

>> I'LL GIVE KIND OF A HIGH LEVEL.

AS ED SAID, SCIENCE OF P3. MS. NAB -- MS. NABORS DID A FANTASTIC JOB. HISTORICALLY AS WE SAID, SOCIETY OPERATED IN THREE INDEPENDENT SECTORS, PUBLIC, PRIVATE AND NONPROFIT. ALL HAVE BEEN MOTIVATED BY DIFFERENT THINGS. PUBLIC SECTOR SERVICES CITIZENS IN COMMUNITIES. PRIVATE SECTOR, YOU KNOW, PRESERVING THEIR REPPATION FOR PROFIT AND SHAREHOLDER,

[00:25:05]

IN OUR CORE COMPETENCY YOU HEARD MS. NABORS ADDRESSED THAT.

YOU HAVE A DAY JOB. WHICH IS SORT OF -- YOUR MISSION HERE WHICH IS TO RUN THE COMMUNITY COLLEGE SYSTEM.

ANYTHING THAT WOULD DETRACT WOULD BE TAXING ON YOUR MISSION ITSELF. DO WE POSSESS THE INTERNAL RESOURCES, DEMAND? I'LL TALK LATER ON ABOUT DEMAND FOR OUR CERTAIN PROJECT. AND THE VALIDITY OF THE PROJECT.

COULD WE MONETIZE ASSET OR CREATE NEW REVENUE.

PUBLIC AGENCY, CONSIDERING THESE THINGS.

HERE'S A DEFINITION OF PUBLIC/PRIVATE PARTNERSHIPS.

THIS IS PRETTY SIMPLE. YOU CAN I THINK MOST OF OU UNDERSTAND IT AT THAT EVEL. I LIKE TO TALK ABOUT IT IN TERMS OF WHAT S A P3 AND WHAT IS NOT. SO I'LL SUMMARIZE THIS FOR YOU HERE. A P3 IS A DESIGN, INSTRUCTION, FINANCING, OPERATIONS, MAINTENANCE, AND SOMETIMES TRANSFER. SO E LIKE TO USE THE ACRONYM,

DBFOMT. >> CHAIR D. FLORES: EVERY DAY.

>> THAT'S WHAT THESE --

>> YOU WILL HEAR IT EVERY DAY IF YOU DECIDE TO GET INTO THE P3 CIRCLE. THEY ARE ALSO TRANSPARENT RELATIONSHIPS. I THINK MS. NABORS USED THE TERM WHEN SHE SAID THIS IS A TRANSPARENT APPROACH.

FIRST AND FOREMOST, THEY ARE A RISK-SHARING APPROACH.

THAT SORT OF GETS TO YOUR QUESTION.

WHICH IS ABOUT NONTRADITIONAL METHODOLOGY.

AND WHAT WE MEAN BY NONTRADITIONAL IS EXACTLY WHAT MS. NABORS SAID. IT'S NEW.

IT'S A NEW APPROACH TO SHARING RISKS.

IT'S NOT ILLEGAL. NONTRADITIONAL AND WE CERTAINLY DON'T WANT TO AND WE CERTAINLY WOULD NOT WANT TO FIND OURSELF IN AN ILLEGAL SITUATION. YOUR STATE HAS LEGISLATION TO DO THOSE THINGS. IT'S NOT -- IT'S CERTAINLY NOT ILLEGAL. IT'S NOT SOMETHING THAT IS DONE WITH A WHOLE LOT OF PREVALENCE TODAY.

>> CHAIR D. FLORES: I'M HAVING DIFFICULTY UNDERSTANDING YOU.

WE TALKED ABOUT P3 MORE THAN ONCE.

SO ON THE TOTAL, I CAN UNDERSTAND WHERE THE PRIVATE INVESTORS GET THEIR MONEY. WHERE THE CLASSROOM, COMMUNITY COLLEGE CLASSROOM P3, WHERE WOULD INVESTORS GET MONEY FROM?

>> THERE ARE TWO TYPES OF 3P3. I DON'T KNOW BUT I'M GOING TO DIAGNOSES YOUR QUESTION ANYWAY. -- ADDRESS.

THEY HAVE HAT'S CALLED THE WESTERN P3, WESTERN-STYLE P3.

WHICH IS -- LET'S ADDRESS THE FIRST ISSUE.

THERE IS TOLLS, ONE SORT OF P3. WHICH IS AVAILABILITY PAYMENT.

THE OTHER TYPE OF A DEAL WOULD BE A WESTERN P3, AVAILABLE IN THE UNITED STATES, WHERE IT'S NOT AVAILABLE IN EUROPE.

AND THAT IS TAX EXEMPT BOND FINANCING THROUGH A 501C3 OR FOUNDATION. YOU MAY HAVE SEVERAL FUNDING MECHANISMS OR SOME P3'S ARE STRUCTURED IN DIFFERENT WAYS BUT

THOSE ARE THE TWO TYPES OF. >> CHANCELLOR MAY: TYPICALLY THAT WOULD BE A LEASE ACK SITUATION IN WHICH IF WE HAD SOMEBODY DEVELOP A CLASSROOM, COLLEGES ARE NOTORIOUS FOR DOING HOUSING UNDER A P3. THE RENT OF THE HOUSING

GUARANTEE THE DEBT SERVICE. >> CHAIR D. FLORES: NOT SO MUCH

CLASSROOM BUILDING. >> CLASSROOM BUILDING PROBABLY

MORE OF A -- >> I'M AWARE OF SOME THAT HAD

BEEN DONE. >> CHANCELLOR MAY: THEY ARE

USUALLY STUDENT HOUSING. >> CHAIR D. FLORES: SOMETHING

THAT WILL GENERATE MONEY. >> CHANCELLOR MAY: RIGHT.

PARKING STRUCTURES. SOME SITUATIONS WHERE YOU GET INTO OTHER MIXED USE.

>> WHAT YOU WILL SEE IN THE PROJECTS TH THERE IS A PROGRAMMC ASPECT THAT DOES NOT GENERATE REVENUE, THEY GET BUNDLED.

THERE IS A COMPONENT THAT GENERATES ENOUGH REVENUE FOR THE PROJECT TO SUSTAIN ITSELF HOLISTICALLY.

SO IN CLASSROOM SITUATION, OU MAYBE BUILDING DORMITORIES ALONGSIDE A CLASSROOM OR A RETAIL COMPONENT FOR THOSE WHO

[00:30:01]

>> CHANCELLOR MAY: ACTUALLY, SOME LIKE IT, UTD HAS WHERE THEY HAVE GOT PRIVATE COMPANIES HOUSED WITHIN THE SAME BUILDINGS

THEY HAVE LABS AND CLASSROOMS. >> THANK YOU.

>> SORRY. LET'S GO TO THE NEXT SLIDE.

UNDERSTANDING EIGHT CRITICAL ISSUES.

AND MS. NABORS TOUCHED A FEW. VISION.

DOES IT ADDRESS HE BASIC PUBLIC NEED.

A CHAMPION, A STRONG POLITICAL CHAMPION IS CRITICALLY IMPORTANT. WHO IS GOING TO STANDUP FOR THE PROJECT? COMMUNICATION, SHE MENTIONED THAT AS VITALLY IMPORTANT AS THE PROJECT DELIVERY STRUCTURE SUPPORTED. YOU ARE COMMUNICATING EFFECTIVELY TO THE COMMUNITY. HOW DO YOU DEMONSTRATE TRANSPARENCY. THE EMPLOYMENT IMPACK IMPACTS.

COMMITMENT. DO WE HAVE UPPORT FOR NONTRADITIONAL PROCUREMENT METHODS, NOT ILLEGAL JUST NEW.

EXPERIENCE AND STAFF. DO WE HAVE THE PLANNING IMPLEMENTATION AND MANAGE OUR RESOURCES FUNDING.

A QUESTION COMES TO THE TABLE, IS THERE A VIABLE REVENUE STREAM. WHAT IS THE CAPITAL STACK LOOK LIKE. WHERE IS THE MONEY GOING TO COME FROM? AND DO WE HAVE THE TIME TO TAKE ON A P3 PROCUREMENT PROCUREMENT. IT'S THE TIMELINE ACHIEVABLE.

UNDERSTANDING RISK AND CONTROL. I TALKED A LITTLE BIT ABOUT THESE THINGS BEING VERY FOCUSED ON RISK.

RISK SHARING IS A KEY COMPONENT FEATURE OF P3.

THEY DON'T ALWAYS ENTAIL FULL RISK TRANSFER.

MS. NABORS ELUDED TO THAT IN HER PRESENTATION.

I THINK SHE WOULD SAY THAT YOU DON'T WANT TO DUMP ALL OF THE RISK ONTO HE PRIVATE SECTOR. IT SHOULD BE MORE APPROPRIATELY BY THE PARTY BEST ABLE TO MANAGE OR MITIGATE THE RISK.

TRANSFER TOO LITTLE RISK WOULD DIMINISH THE VALUE OF MONEY FOR YOU. AND TOO RISK OR RISK UNMANAGEABLE WOULD RESULT IN OVERRUNS, ALSO DIMINISHISHING

THE VALUE OF MONEY. >> D. ZIMMERMANN:

>> THE DEEPEST POCKET THEORY? >> D. ZIMMERMANN: IN LOSS TO A CITIZEN WHO WONDERED ONTO THE P3 OR DAMAGE TO SAY A P3 PROPERTY AT THE POINT THAT ANYONE COMING FORWARD WITH OUR LIBEL CONCERN.

I UNDERSTAND TH THERE IS A LOT T CAN BE WRITTEN OUT WITH A LEGAL CONTRACT. BUT THAT DOESN'T CHANGE THE FACT THAT IF WE OWN THE DIRT, WE ARE INVESTED IN THE LIABILITIES THAT

GO ON. >> THAT'S RIGHT.

AND AS I SAID, AND THIS SLIDE INDICATES THIS IS A RISK SHARING. AND WHAT WE -- I THINK THE QUESTION WAS ASKED TOWARD THE END THERE.

AND SHE WAS TALKING TO SORT OF ADDRESS THE IDEA OF PUSHING THINGS ONTO THE PRIVATE SECTOR. YOU ASKED THE QUESTION, WHAT IS A GOOD DEAL LOOK LIKE AND HOW DO WE AVOID IT.

SHE MADE THE COMMENT STRUCTURING THE OMMENT THE RIGHT WAY.

I WOULD EMPHASIS TWO WORDS, ONE SHARING, AND THE THIRD P IN THE THREE "PES," WHICH IS THE PARTNERSHIP.

SO THE IDEA IS THAT THERE IS A CERTAIN AMOUNT OF RISK YOU HAVE.

THAT YOU CAN'T -- THERE IS NO WAY YOU ARE GOING TO BE ABLE TO SHED THAT RISK. YOU ARE ALWAYS GOING TO HAVE THAT RISK. THE PRIVATE SECTOR IS GOING TO SHARE IN SOME RISKESS HERE. I OUTLINED A FEW ON THE SLIDE.

TYPICALLY FINANCIAL RISKS, TECHNICAL AND POLITICAL RISKS.

THERE ARE PLENTY OF OTHER REVVINGS.

THESE ARE -- RISKS -- YOU WILL DISCUSS WITH THE PARTNER WHO YOU TRUST, ND THE APPROPRIATE PARTIES IS GOING TO BEAR A CERTAIN AMOUNT OF RISK THEY FEEL PMAKES SENSE.

THERE ARE THREE CATEGORIES OF RISK ON HERE WE LIKE TO CLARIFY, KNOWN, UNKNOWN AND KNOWN UNKNOWN, WHICH IS A STRANGE TERM. KNOWN RISK, RISKS YOU CAN IDENTIFY. UNKNOWN, CANNOT BE PREVENTED OR MANAGED PROACTIVELY. THINGS AS WE AND OUT] NO IDEA SOMEBODY IS GOING TO TRIP AND FALL AND HURT THEMSELVES. ALSO NONE UNKNOWN WHICH ARE WE KNOW THE RISKS BUT NOT SURE HOW THEY WILL AFFECT THE PROJECT.

RISK ASSESSMENT IS THE KEY AND CRITICAL COMPONENT IN THE EARLY PLANNING STAGES. KEY POINTS AS WE SORT OF COME TO

[00:35:02]

IT'S A PROJECT DELIVERY METHOD, NOT A FUNDING APPROACH.

SO THIS IS ABOUT HOW DO WE GET THE PROJECT DONE.

PRIVATE FINANCING AND EQUITY MUST ALWAYS BE REPAID.

THAT'S WHY THE REVENUE STREAM IS CRITICALLY IMPORTANT.

AND THE FUNDING AND REVENUE STREAM MUST BE IN PLACE AND BE MARKETABLE TO ENSURE THAT YOU HAVE A VIABLE P3.

I BROUGHT UP THE QUESTION EARLIER, WHICH IS LIKE DOES THE PRODUCT SUB ASSISTANTIATE ITSELF SUBSTANTIATE.

IS IT SUPPORTED BY THE STAKEHOLDERS? DOES IT MEET OUR BUSINESS CASE? TRYING TO USE A P3 ON A CORE PROJECT OR A PROJECT NOT SUITABLE FOR A P3 WON'T WORK.

SO IT'S NOT NECESSARILY THE RIGHT WAY TO DELIVER.

THIS IS ONE EXAMPLE OF A PROCESS THAT I WOULD CONSIDER TO BE COMPREHENSIVE BUT CUSTOMIZABLE.

THIS WILL COVER EVERYTHING. BUT DEPENDING UPON YOUR PROJECT, AND YOU WOULD HEAR THIS IF YOU WERE AT THE P3 CONFERENCE.

THIS SORT OF JOKE THAT KIND OF GOES AROUND IF YOU HAVE SEEN ONE P3 YOU HAVE SEEN ONE P3 MEANING THEY ARE ALL DIFFERENT.

THROUGH THE PROCESS HERE YOU MIGHT FIND PIECES APPLICABLE TO ALL OF THEM. AND WE'LL COVER SOME OF THOSE HERE AS WE TALK ABOUT NICHOLSON GATEWAY.

LSU THEY HAD A PIECE OF PROPERTY THEY LOOKED TO IT WAS UNDERUTILIZED, OLD DORMITORY THAT HAD EXCEEDED THE USEFUL LIFE AND NEEDED TO BE REDEVELOPED.

>> THEY KNEW THEY WANTED TO DO, THAT HAD A MASTER PLAN CREATED FOR THIS SITE. THEY KNEW WHAT THEY NEEDED.

AND THEY HAD THE PLAN IN PLATES. THEY NEEDED TO HELP, NEEDED HELP GETTING THERE. SO THEY WENT OUT TO PROJECT ADVISOR SELECTION AND WENT THROUGH A RIGOROUS RFP PROCESS TO HIRE AN ADVISOR. ONE WAS SELECTED. WE HELPED -- [INDISCERNIBLE] SHARE THE PROCESS TO DEVELOP A MARKETABLE PROJECT. TO MAKE SURE THE PROCESS WAS VIABLE AND COULD BE BROUGHT OUT TO THE MARKET.

WE NEEDED TO DO DUE DILIGENCE. WE DID MARKET STUDIES TO MAKE SURE THAT THEY COULD CREATE A DEVELOPMENT THAT WAS COMPETITIVE WITH THE OFF-CAMPUS STUDENT HOUSING AS WELL AS SATISFY NEEDS OF THE ON-CAMPUS COMMUNITY. MANY STUDIES OUT THERE TUDENTS DO MUCH BETTER LIVING ON-CAMPUS THAN OFF.

THAT WAS A MISSION TO MAKE SURE THEY HAD HOUSING TO SATISFY THE NEEDS OF STUDENT SAID. THEY KNEW THEY HAD ATECTOMY TIMELINE AND A P3 WAS THE ONLY WAY TO DELIVER THE PROJECT.

FROM START TO FINISH, ROUGHLY THREE YEARS.

TO GET A DEVELOPER ON BOARD. DESIGN A PROJECT AND CONSTRUCT

IT. >> CAN YOU TALK ABOUT QUICKLY THE PARALLEL? THE TASK THAT WERE ABLE O OCCUR

AT THE SAME TIME? >> WE WERE RUNNING MANY TASKS ALL CONCURRENTLY. WHETHER IT'S THE DESIGN, SELECTION. GETTING THE STUDIES UNDERWAY.

AND THEN THROUGH THE ENGAGEMENT AND ONCE WE GOT A DEVELOPER SELECTED, THE DEVELOPER SELECTION PROCESS WAS VERY RIGOROUS. THEY WENT OUT TO MARKET.

THEY SHORT LISTED DOWN TO TWO DEVELOPERS.

AND THOSE DEVELOPERS COMPETED. THEY HAD THEM ON CAMPUS FOR SEVERAL MEETINGS OVER A COUPLE OF MONTHS TO MAKE SURE THEY HAD THE RIGHT FIT. WE WANT TO MAKE SURE YOU HAVE A GOOD PARTNER. IT WAS VERY IMPORTANT.

BECAUSE THE CONSTRUCTION PART IS THE SHORT GAIN.

IT'S 18 MONTHS, TWO YEARS AND YOU ARE FINISHED WITH CONSTRUCTION. YOU NEED TO MAKE SURE YOU HAVE A PARTNER THAT CAN SEE YOU THROUGH THE OPERATIONS SIDE, THE MAINTENANCE SIDE AND THEY ARE COMFORTABLE WORKING WITH THAT

PARTNER. >> THE OTHER IS MAKING SURE YOU CAN GO THROUGH ALL THESE APPROVALS IN THE PROCESS FROM BOARD OF REGENTS, BOARD OF SUPERVISORS, THE STATE LEVEL APPROVALS. YOU HAVE TO KNOW A CHAMPION TO MAKE SURE YOU CAN GO THROUGH THE PROCESSES.

THE DEVELOPERS SEEKING INFORMATION FOR APPROVALS YOU HAVE TO KNOW YOUR LSU, YOUR CHAMPION TO GO THROUGH THAT PROCESS AS WELL AS YOUR ADVISORS TO HELP YOU PULL LL THAT INFORMATION TOGETHER FOR THE APPROVALS.

>> THESE DEALS RE AS I SAID, RISK BEST BORN BY THOSE IN A BETTER PLACE TO MITIGATE OR DEAL WITH IT.

WHAT THIS GRAPHIC REPRESENTS AND YOU MAY NOT BE ABLE TO READ IT ON THE SURFACE, AFTER I TELL YOU YOU WILL UNDERSTAND.

[00:40:02]

YOU CAN SEE RIGHT THERE, 2016 WHERE IT SWITCHES FROM GRAY TO GOLD THERE, IS ONES THOSE ASSURANCES ARE IN PLACE, AND THE PUBLIC SECTOR IS OW RELYING UPON THE PRIVATE FOR WHAT THEY CAN BRING TO THE TABLE, WHICH IS SPEED AND EFFICIENCY AND INNOVATION AND CONSTRUCTION AND DELIVERY, YOU CAN EE THOSE TASKERS ARE STACKING UP AND AS CASEY ELUDED TO, THAT CONSTRUCTION TIMELINE IS REPRESENTED HERE BY A YEAR AS WELL. BUT YOU CAN SEE THE TASKS STACKED UP RUNNING CONCURRENTLY. THEY SPEND A GOOD DEAL OF TIME IN THE PLANNING PHASE. BETWEEN 2016 AND '17 YOU CAN SEE HOW MUCH WAS DONE IN THE SHORT PERIOD OF TIME.

AS CASEY SAID, IT REPRESENTS A BLIP ON THE MAP WHEN YOU THUNK ABOUT THE DURATION OF THE CONTRACT, 30 TO 40 SOMETHING

YEARS LONG. >> AS THE DEVELOPER IS DESIGNING AND THE CONTRACTOR, THEY HAVE GOING THROUGH THE DESIGN PROCESS. YOU ARE HAVING TO MAKE SURE THEY ARE STAYING ON TRACK. YOU WANT TO MAKE SURE IT'S DELIVERABLE, ESPECIALLY WITH STUDENT HOUSING.

IF YOU DON'T HIT THE DATE YOU HAVE TO WAIT ANOTHER YEAR.

THE SCHEDULE IS COMPRESSED YOU HAVE TO RUN A LOT OF PROCESSES CONCURRENTLY. LSU DIVISION, THEY HAD A VISION.

THEY WANTED TO CONNECT THE WEST SIDE OF CAMPUS WITH THE MAIN CAMPUS. IT WAS DIVIDED BY A STATE HIGHWAY. THEY WANTED TO CALM THE TRAFFIC ON THE HIGHWAY AND MAKE IT THIS PART OF CAMPUS PART OF THE FABRIC. THEY NEEDED O UPGRADE STUDENT HOUSING TO COMPETE WITH THE OFF-CAMPUS MARKET.

THIS ALLOWED THEM TO DO THAT. IMPROVE NICHOLSON DRIVE AND INFRASTRUCTURE. THEY WANTED TO HAVE VIABLE OPTIONS TO KEEP UPPERCLASSMAN ON CAMPUS TO HAVE BETTER PERFORMANCE. THEY NEEDED A WAY TO ADDRESS DEFERRED MAINTENANCE. REDUCE THE RISK.

AND THAT'S THE CHEDULE, THE DEVELOPER AND THE CONTRACTOR TEAM COMING N BOARD. THEY WANTED TO BUILD THIS LESS EXPENSIVE, FASTER AND MORE EFFICIENT.

THAT'S WHAT THE DEVELOPMENT PARTNER BROUGHT TO THE TABLE.

SO THE PROGRAM IS A 28-ACRE SITE.

THEY WANTED TO BUILD 1531 NEW BEDS FOR UPPERCLASSMAN AND GRADUATE STUDENTS. WE INCLUDED ON CAMPUS DORMITORY TRADITIONAL FOR FRESHMAN. THAT WAS 422 BEDS.

I WANTED TO MAKE SURE WE HAD RETAIL FOR THE RESIDENTS.

THAT'S THE 38,000 SQUARE FOOT OF RESIDENT FOCUSED RETAIL.

A GROCERY STORE, SOME RESTAURANT SPACES, WE'VE GOT AT&T STORE IN THE RETAIL DEVELOPMENT AS WELL. AND A OUTPATIENT CLINIC.

NEEDED ADEQUATE PARKING, HIDDEN BEHIND THE DORMITORY OUSING SO WE COULD HAVE A MORE PEDESTRIAN-FRIENDLY CAMPUS FEEL.

THIS IS THE SITE PLAN. WE PUT INGRADUATE HOUSING FURTHER THE NORTH SIDE OF THE SITE PLAN RIGHT.

AND THE RETAIL IS MORE FOCUSED ON THE OWNER OF THE TWO STATE HIGHWAYS, [INDISCERNIBLE] AND NICHOLSON DRIVE.

THE PARKING STRUCTURE, WHICH OFFSET SOME OF THE PARKING NEEDS ALSO IS BEHIND THAT THE SITE MAKE SURE WE FOCUS ON LIVE OAK TREES ON CAMPUS, WHICH ARE IMPORTANT TO LSU. WE MADE SURE THOSE WERE FOCAL

POINTS IN THE DESIGN. >> NOT ONLY DID THEY GET DORMITORIES AND RETAIL, NICHOLSON DRIVE, HAT WAS INCLUDED IS A BEAUTIFICATION PROJECT CORRIDOR OF NICHOLSON.

YOU CAN SEE THE CONNECTIVITY THAT CASEY TALKED ABOUT IN THE VISION. THE STUDENTS NOW NOT ONLY HAVE THE AMENITIES THAT ARE MUCH DESIRABLE ON THE CAMPUS AVAILABLE IN TERMS OF THE RETAIL BUT THEY HAVE DIRECT CONNECTIVITY ACROSS THAT CORRIDOR DOWN TO THE UNIVERSITY.

>> WITH THE PARKING CHALLENGES MOST UNIVERSITIES HAVE, THAT WAS A COMPETITIVE ADVANTAGE WITH THE OFF-CAMPUS HOUSING IS YOU CAN LIVE HERE, PARK HERE AND YOU CAN WALK TO CLASSES.

AND YOU ARE IN AS NICE OF A PLACE YOU WOULD FIND OFF-CAMPUS.

[00:45:04]

THIS IS THE ARRANGEMENT THAT WAS SET UP FOR THIS PARTICULAR PROJECT. WHERE WE HAD CSRSB AND D AS THE DEVELOPMENT ADVISORS. LSU WITH THE CEA WITH THE LSU PROPERTY FOUNDATION AND A PRIVATE 501C3 THAT WAS ETUP TO FACILITY RISE WAS THE DEVELOPER SELECTED.

AND THEY BROUGHT TO THE TABLE A COMPANY WHO WAS A CONTRACTOR EMERGENCY ROOM STERLING PROPERTIES TO MANAGE THE RETAIL LEASING AND MAINTENANCE OF THAT FACILITY. LOUISIANA PUBLIC FINANCE WAS THE BONDING AGENTS. AND RBC CAPITAL BROUGHT IT TO THE UNDERWRITING WRITER. ON THE OPERATING SIDE, THIS IS A LONG-TERM ARRANGEMENT. RISE MANAGEMENT WAS HANDLING THE OPERATIONS. IT WAS IMPORTANT TO LSU THEY BUILT A PROJECT THAT WAS MAINTAINED THE STANDARDS OF LSU, THE DESIGN STANDARDS. TO MAKE SURE IT WAS PART OF THE CAMPUS. IT WAS IMPORTANT IT MET THE BUILDING STANDARDS THEY HAVE ON CAMPUS.

AND LSU IS GOING TO HANDLE THE LEASING ND THE GUARANTEE FOR THE LEASE UP OF THE FACILITY THROUGH THEIR RESIDENTIAL LIFE PROGRAM. THEY ALSO HAVE OVERSIGHT AND MAINTENANCE ON THE OPERATION SIDE, RISE IS RESPONSIBLE BUT THEY HAVE OVERSIGHT OF THAT. WHEN WE DEVELOP THESE AGREEMENTS YOU COULD BILL BUILD IN AS MUCH OR LITTLE CONTROL BASED ON YOUR EXPERIENCE AND WHAT YOU ARE COMFORTABLE WITH.

IT WAS IMPORTANT THE RISE LIFE AND LSU MUSTN'T CONTROL OF THE FACILITY. MAINTAIN CONTROL -- THEY DIDN'T WANT THE STUDENT SAID TO HAVE A DIFFERENT EXPERIENCE ON THIS

CAMPUS THAN THE MAIN CAMPUS. >> JUST TO RECAP.

COMMITTED TO THIS STRATEGIC VISION AND MISSION LSU HAD.

PROJECT CHAMPION AND KEY STAKEHOLDERS ALIGNED.

THAT WAS A MUST FROM EVERY LEVEL OF THE ADMINISTRATION.

AND THEN WE HAD CLEAR DEFINITION OF PROJECT FRAMEWORK.

DETAIL DUE DILIGENCE. THEY HAD THE FACILITY NEEDS.

WE DID THE FEASIBILITY AND BUSINESS CASE.

RAN PERFORMANCE. ANY GAP WAS DEFINED.

AND THEN ALL THE RISKS WERE LAID OUT.

WE WEPT THROUGH AN ORGANIZED TRANSPARENT PROCUREMENT PROCESS.

AND WE HAD ENGAGEMENT FROM EACH STAGE THROUGHOUT FROM START TO FINISH. AND CONTINUING EVEN THROUGH THE OPERATIONS. IT TURNED OUT TO BE A VERY SUCCESSFUL PROJECT. WE HAVE REALLY 100% OF THE RETAIL UP NOW. THE OCCUPANCY AFTER THE FIRST YEAR WE'RE AT 98%. PERFORM AT 95%.

ENROLLMENT GROWTH 100% OCCUPIED. THEY LIKE TO RUN 98% IF THEY NEED ROOM REASSIGNMENTESS. THEY TYPICALLY DON'T GET TO 100%. BIT --

>> CHANCELLOR MAY: IS THE UNIVERSITY [INDISCERNIBLE]

>> THEY HANDLE THE LEASING OF THE UNITS.

THE DEVELOPER OF THE GROUP, THE RISE DEVELOPMENT THEY ARE NOT THE DEVELOPMENT SIDE, THE MANAGEMENT SIDE, THEY HANDLE THE MAINTENANCE AND THE CUSTODIAL FOR THIS CAMPUS.

THE SPRUCE HALL, WHICH IS THE DORMITORY, THEY HANDLE THE UNIVERSITY HANDLES THE CUSTODIAL BECAUSE THEY LIKE THE ROOMS CLEANED ON A WEEK LAY BASE. THERE IS MORE FLEXIBILITY FOR THE APARTMENT STYLE HOUSING. THEY ALSO HANDLE THE MAINTENANCE FOR THOSE NEW FACILITIES. THIS WAS THE FIRST PHASE OF THE PROJECT. IT WAS ROUGHLY A $226 MILLION DEVELOPMENT PROJECT.

WE'RE ONTO THE THIRD PHASE NOW. SO ALL LSU, 400 MILLION IN THREE PHASES AND CLOSE TO 2600 BEDS THAT WE'VE BUILT IN A THREE-YEAR

[00:50:05]

NICHOLSON GATEWAY WAS ABOUT A MILLION SQUARE FEET.

>> I WANT TO MAKE SURE IF THERE ARE OTHER QUESTIONS YOU WOULD LIKE TO ASK OF THEM BEFORE WE MOVE TO CLOSED SESSION, I'LL WE'RE HERE, WE DON'T HAVE ANYTHING PLANNED YET.

QUITE FRANKLY THE ONLY THING I KNOW, YOU SAID IT EARLIER, IF YOU HAVE DONE ONE P3, YOU HAVE DONE ONE P3.

THEY CAN ALL BE STRUCTURED AND RUN DIFFERENTLY.

THERE ARE A WHOLE HOST OF THINGS THAT PEOPLE SMARTER THAN ALL OF US NEED ADVISING COUNSEL ON. THE BIG REASON IS REMEMBER WE'RE TRYING TO STRIP BOND DOLLARS. WE ONLY HAVE SO MUCH.

AND THERE IS IS THINGS THAT ARE BETTER LEFT TO SOMEBODY WHO KNOWS HOW TO OPERATE A MIXED USE DEVELOPMENT.

>> D. ZIMMERMANN: $2,017 $27 AE FOOT CHEAPER?

>> $175 A SQUARE FOOT FOR THIS. AND ON AMPUS, A LITTLE BIT MORE

>> CHAIR D. FLORES: THE BACKGROUND INFORMATION YOU PROVIDED WAS HELPFUL. THANK YOU.

EVEN THOUGH I DON'T REMEMBER THE ACRONYM.

>> COULD YOU -- >> YEAH.

THE --

>> CHAIR D. FLORES:

>> WHAT IS IMPORTANT ABOUT THE GRANT AND THE WHOLE IDEA IS ANYTHING ALONG THAT SPECTRUM GOES FROM DOING EVERYTHING OURSELF LIKE WITH BOND PROJECTS TO BASICALLY HAVING EVERYBODY DO SOMETHING FOR YOU. FINDING THE COMFORT LEVEL ON THAT SPECTRUM FOR EACH PROJECT THAT YOU ARE DOING.

>> THE OPERATIONS AND MAINTENANCE SOMETIMES CASEY SAID, LSU WANTED CONTROL OVER THIS.

THE PARTNERSHIP WAS STRUCTURED SO THEY DID.

THE TRANSFER AND A LOT OF TIMES PART OF THAT ACRONYM IS AN IMPORTANT ASPECT. A LOT OF TIMES LSU IS GOING THIS ASSET IS OURS WHEN THE RELATIONSHIP IS OVER.

WE DON'T WANT TO RECEIVE A 40-YEAR OLD ASSET IN BAD SHAPE.

THE OPERATIONS AND MAINTAIN AGREEMENT SAID RESPONSIBLE FOR MAINTAINING AND UP GREATING THE EQUIPMENT SO WHEN LSU GETS IT TRANSFER THEY ARE NOT GETTING OUTDATED STUFF, AND REQUIRES

INVESTMENT TO BRING IT UP. >> THEY BUILT THAT INTO THE FACILITIES MAINTENANCE OPERATION HERE.

SO THAT THEY KNOW WHEN THEY NEED TO CHANGE IT OUT.

WHEN YOU HAVE TO -- THE RESPONSE TIME FOR HVAC OR AIR CONDITIONING THAT GOES OUT. ALL THAT IS SET.

KEY PERFORMANCE INDICATORS OR A QUARTERLY OR MONTHLY BASIS, HEY CAN GO IN AND GRADE THE DEVELOPER, THE MANAGEMENT TEAM TO MAKE SURE THEIR MEETING MARKS.

AND ALL THAT IS BUILT INTO THE AGREEMENT.

AND THERE IS ONEY SET ASIDE IN THE MAINTENANCE RESERVE TO COVER

THOSE COSTS. >> CHANCELLOR MAY: I WOULD SAY A GOOD REASON TO LEARN FROM THIS PARTICULAR PROJECT.

AND SPECIFICALLY, BECAUSE LOUISIANA UNLIKE US, THERE IS NO MECHANISM FOR THE INSTITUTION BONDS.

THEY CAN'T DO IT. AND THE STATE ACTUALLY DOES ALL THE BONDING AND IT'S CAPPED AT 300 SOME ODD MILLION.

TO DO A 4 OR $5 MILLION PROJECT, YOU HAVE TO COME UP WITH SOME OTHER WAY TO GET IT DONE. SO THAT FORCES THEM TO FIGURE OUT HOW TO DO THIS RIGHT BECAUSE THERE AREN'T OTHER OPTIONS

AVAILABLE TO THEM. >> D. ZIMMERMANN: HOW LONG IS

THIS PROJECT? >> IT OPENED IN 2018.

SO JUST

>> REMEMBER THE GRAPH. THERE WAS A YEAR SPENT WORKING UP TO THAT. THERE IS NOT PNC.

AND I WILL TELL YOU UP FRONT, THERE ARE P3 PROJECTS THAT HAVE FAILED IN THIS COUNTRY. PART OF IT IS THEY DIDN'T DO ALL THE THINGS THAT MARY WAS LAYING OUT AND CSRS HAS BEEN HELPING WITH. HOW YOU DO YOUR MARKET STUDIES, BASIC REVENUE STREAMS AND THE PROPER BACKGROUND AND KNOW YOU PREPARE FOR THE KNOWNS AND IN KNOWNS.

>> THE VISION AND PLANNING IS SO IMPORTANT TO THIS.

[00:55:03]

ON THE FLIP SIDE, THE PRIVATE SECTOR IS SEEKING ASSURANCES THE SAME WAY. THEY WANT TO HAVE A PARTNER IN THE DEAL TOO. AND YOU WILL HEAR, I MEAN, AT THIS CONFERENCE GOING ON DOWNTOWN NOW, THE PRIVATE SECTOR REPRESENTATION IS THERE. THEY WILL TELL YOU, DOES THE PUBLIC AGENCY HAVE AN ADVISOR. I THINK MS. NABORS ELUDED TO THAT. GET YOURSELF THE RIGHT ADVISER ADVISOR AND LEGAL TEAM. WHEN THE PRIVATE SECTOR LOOK AS AT THE RFP THEY CAN TELL YOU HAVE NOT DONE IT BEFORE.

>> THAT GIVES THE DEVELOPER ASSURANCE THEY CAN LEAN ON THE PROJECT ADVISOR TO HELP MAKE SURE THINGS DON'T GET JAMMED UP IN THE BUREAU ATTIC PROCESS TO MAKE SURE EVERYTHING CAN FLOW

AND TIMELINES CAN BE MET. >> M. BRAVO: ONE MORE QUESTION.

HANDLE CAMPUS SECURITY ON THIS? >> LSUPD COVERS THE CAMPUS SECURITY. ALL THE CAMERAS, THE CARD ACCESS CONTROLS ARE ALL THROUGH RESIDENT -- RES LIFE.

THEY WANTED THAT PROTECTION AND SECURITY AND PEACE OF MIND.

>> HOUSING, MIXED USE HAS TO COME WITH THIS.

I'M NOT GOING TO GO THERE BUT WE HAVE TO HAVE THE ABILITY IF A STUDENT OR WHOEVER IS NO, WHERE DO THEY GO TO EAT? RIGHT NOW IT'S HOP IN YOUR CAR AND 30 MINUTES AWAY.

THE PROPER WAY OF LAYING THINGS OUT FOR US IS GOING TO BE PARAMOUNT TO WHAT YOU ARE SAYING IS TO WHAT NEED IS IT SERVING. OUR NEEDS ARE ALSO THE STUDENTS BUT THE COMMUNITY HAS THE SAME NEEDS.

THAT'S WHERE WE LOOK AT IT. I WAS TALKING TO PEOPLE TODAY.

ALSO VISION THIS, E [INDISCERNIBLE] TIFF IS WE FORGIVE TAXES TO HAVE ECONOMIC DEVELOPMENT IN THE UTURE.

WE LOOK AT THE ABILITY TO CREATE A REVENUE STREAM BUT NOT ONLY ARE WE IN IT FOR THE MONEY WHAT WHAT ECONOMIC CATALYST CAN WE PRODUCE THAT PRODUCES THE FUTURE REVENUE STREAM FOR THE DISTRICT WHAT OUT ITS CREATED WHAT WE CAN DO IN UR CAMPUSES.

IT'S A LONG-TERM VISION. YOU ARE NOT IN THIS TO MAKE MONEY NEXT WEEK. YOU ARE PROVIDING THE SERVICE AND FINDING OUT HOW YOU CAN ACTUALLY BE THE CATALYST OF ECONOMIC DEVELOPMENT IN OUR COMMUNITIES.

THAT'S WHAT WE'RE LOOKING AT. >> S. WILLIAMS: THE PEOPLE IN HERE ARE THEY IN THE COMPANY OR OWNERS?

>> I'M AN OWNER [INDISCERNIBLE] THE REST ARE EMPLOYED WITH --

>> S. WILLIAMS: THE TITLES? >> PRINCIPAL AND TEXAS REGIONAL

DIRECTOR. >> I'M THE SECOND LEAD FOR DEVELOPMENT ADVISORY SERVICES IN OUR P3.

>> >> I'M A SENIOR PROJECT MANAGER.

>> C. COMPTON: ANY OTHER QUESTIONS FROM THE BOARD?

THANK YOU. >> THANK YOU.

>> CHANCELLOR MAY: IF WE COULD GO TO CLOSED SESSION.

IF YOU WOULD LIKE TO NOW AND I CAN HAVE THE FINANCE ADVISOR.

110 TO 15 MINUTES TO DO THAT. YOU WE CAN DO IT NOW OR --

>> CHAIR D. FLORES: GO AHEAD WITH IT THE FINANCIAL ADVISOR.

RECOMMENDATION TO MOVE THEM OR WHAT?

>> QUESTIONS ABOUT THOSE TWO? THEN WE'LL MOVE TO THE BOND

[D. Bond Interim Financing Program Presenter: Hilltop Securities and Estrada Hinojosa]

OUT] UNTIL NEXT MONTH. >> WHO CAN TALK THE FASTEST?

[01:00:01]

>> I'LL GIVE IT A GO. >> OKAY.

THERE IS NOT ANYTHING ON THE AGENDA ABOUT APPROVAL.

WHAT WE WANTED TO DO WAS START AT THIS POINT GIVING INFORMATION ON WHAT WAS BE AN INTERIM FINANCING PROGRAM.

WHY WOULD WE USE AN INTERIM FINANCING PROGRAM ON THE BOND? I'LL LET JASON EXPLAIN EXPLAIN THAT.

WE DID THIS BACK IN 2006. SO IT IS AN PROMOTE THING THE WAY THE MARKET WENT TODAY, I PROBABLY OUGHT TO ISSUE ALL $1 BILLION OF THE BOND TODAY. WE COULD DO IT AT 2% -- RIGHT-HAND SIDE OF YOU MIGHT HAVE TO POINT.

>> CHAIR, MEMBERS, DR. MAY, JASON HUGHES WITH HILLTOP SECURITIES, GOOD TO BE WITH YOU AND HAVE BOB ESTRADA FROM ESTRAA HINOJOSA. WE WANT TO GIVE YOU A BRIEF OVERVIEW. YOU LOOK AT THE OPTIONS AS FAR AS ACCESSING FUNDS FOR CAPITAL PROJECTS.

CERTAINLY ONE OF THE THINGS YOU CAN DO AND HAVE DONE IN THE PAST IS USE CASH ON HAND, YOU HAVE THE ABILITY TO USE THAT TO GO AHEAD AND FUND PROJECTS AND REIMBURSE YOURSELF ONCE LONG-TERM DEBT IS ISSUED. YOU CAN DO THAT WHERE LAST TIME YOU ISSUED NEW MONEY BONDS BACK IN 2010 FOR MAY 2004 BOND ELECTION. JOHN REFERENCED LONG-TERM INTEREST RATES ARE LOW RIGHT NOW.

THE OTHER THING IS YOU HAVE THE HIGHEST CREDIT RATINGS, TRIPLE A. SO AS CREDITS RATINGS, IT GOES UP. IT'S AT THE HIGHEST POSSIBLE.

THE INTEREST RATE IS AS LOW AS POSSIBLE.

TYPICALLY YOU ISSUE A 20-YEAR TERM FOR A FIXED INTEREST RATE.

THE NICE THING IS YOU ARE A WELL-KNOWN NAME IN THE MARKET.

IT'S A SAFE INVESTMENT. SEEING RATES AS LOW AS TODAY, WE MIGHT TIE UP LONGER PERIOD OF TIME OF TIME.

WE PAY THEM OFF EARLIER. THAT'S PART OF THE STRATEGY WE WORK WITH BOB AND JASON, WHAT IS THE BEST THING, THERE MIGHT BE 25-YEAR, THE MARKET MAY DICTATE IT'S WELL WORTHWHILE TO ISSUE

LONGER TERM NOTES. >> RATES ARE SO LOW.

>> WELL, NOT TO GET TOO FAR OFF. IF WE ISSUE IN JOHN'S EXAMPLE A 30-YEAR DEBT, IF YOU THINK ABOUT 10 YEARS FROM NOW YOU OLL DOWN THE CURVE. IN OTHER WORDS WE'RE TALKING ABOUT LONG-TERM DEATH FOR 30 YEARS BUT 10 YEARS WE'RE TALKING ABOUT 20 YEARS. EVEN I'VE ISSUED DEBT AT 2.5% AND REFINANCED IT LATER ON BECAUSE WE'VE BEEN ABLE TO GET 1.25% AS AN EXAMPLE. NEVER SAY NEVER. IF WOO LOOK AT RATES HEIGHT RIGHT NOW, THEY ARE A-HISTORICAL LOWS.

LAST TIME WAS THE LATE 1800S IF THAT GIVES YOU A PERSPECTIVE.

>> WE MAKE NO MONEY ON OUR INVESTMENTS IS THE TROUBLE.

>> THAT LAST BULLET POINT, THE COMMERCIAL PAPER IS SIMPLY SHORT-TERM DEBT. IT AFFORDS YOU FLEXIBILITY.

YOU SEE THE THIRD SUBBULLET POINT THERE.

IF YOU THINK ABOUT IF YOU HAVE AN ISSUE OR A PROJECT AND THE BOND IS $10 MILLION YOU DON'T WANT TO ISSUE LONG-TERM DEBT FOR $10 MILLION. THERE IS A ECONOMY TO SALE.

IF YOU HAVE A $10 MILLION PROJECT TODAY AND A $15 MILLION PROJECT THREE MONTHS FROM NOW ISSUING THE COMMERCIAL PEOPLER ALLOWS YOU TO UND THEM BUT NOT LOCK IN [INDISCERNIBLE] PRACTICAL. PAGE 2 YOU SEE AGAIN, THIS IS -- OH, I'M SORRY. AGAIN, THIS IS AS A SHORT-TERM FINANCIAL INSTRUMENT. IT HAS A MAXIMUM MATURITY OF 270 DAYS. THE NICE THING IS ONCE A PROGRAM IS CREATED AND THE BOARD APPROVES THAT, THEN THE DISTRICT CAN ISSUE THAT COMMERCIAL PAPER ANYTIME AFTER.

THAT'S THE FLEXIBILITY ASPECT. QUICKLY AS YOU SEE WHAT HAPPENS IS ONCE THE COMMERCIAL PAPER MATURES, IT'S REMARKETED.

JUST TO GIVE YOU AN XAMPLE. LET'S SAY YOU GO OUT AND SAY, OKAY, WE'RE GOING TO ISSUE $25 MILLION IN COMMERCIAL PAPER FOR 270 DAYS AT A 1.5% FOR RATE AS AN EXAMPLE.

WHENEVER THAT 270 DAYS IS UP, THEN YOU AN REMARKET IT.

AND SO WE GO THROUGH THE SAME PROCESS, DETERMINE THE TERM, HOW LONG WE WANTED THAT TO GO. WE GET THE INTEREST RATE OR TAKE IT OUT LONG-TERM DEBT AT THAT TIME IF IT'S WHAT THE DISTRICT WANTED TO DO. YOU SEE THE NEXT TO LAST BULLET POINT. IN THE EVENT THAT COMMERCIAL PAPER CAN'T BE REMARKETED, THERE IS A THIRD PARTY LIQUIDITY AND

[01:05:02]

AGAIN, THE FINANCE PLAN MOVING FORWARD WE WOULD SOLICITED LARGE BANK TO BE THE LIQUIDITY PROVIDER.

SOLICIT VIEWERS TO MARKET AND SELL THAT COMMERCIAL PAPER.

YOUR COBOND COUNSELS DRAFT LEGAL DOCUMENTS RELATED TO THE PROGRAM. APPLY AND RECEIVE CREDIT RATINGS. THIS WOULD COME BACK TO THE BOARD FOR APPROVAL FOR CREATING THAT PROGRAM.

AND THEN AGAIN, AS I SAID, WE COULD ISSUE THE COMMERCIAL PAPER ANYTIME THERE THEREAFTER. WE TALKED ABOUT TAX EXCEPT.

ALL WE EVER ISSUED IN THE PAST ARE BONDS.

THAT GIVINGS US FLEXIBILITY. THE DIFFERENCE BETWEEN TAXABLE AND TAX EXEMPT BONDS IS FIVE BASIS POINTS.

>> A VERY NARROW SPREAD. THE PROCEEDS FROM SELLING TAXABLE MUNICIPAL BONDS IS YOU DON'T HAVE THE RS RULE RESTRICTIONS ON HOW YOU USE THE MONEY AND YOU COULD EVEN INVEST THE MONEY WHILE NOT USING IT.

WHERE TAX-EXEMPT BONDS PROCEEDS YOU RECEIVE ARE SUBJECT TO A LOT OF RULES THAT BOND LAWYERS WILL REMIND YOU OF.

BUT VERY RESTRICTIVE ON HOW THAT MONEY IS USED.

>> CHANCELLOR MAY: WE WOULDN'T BE THE FIRST.

THERE ARE OTHERS. >> TAKE ADVANTAGE.

IT COSTS VERY LITTLE TO ISSUE.

>> C. COMPTON: CAN YOU PROVIDE US WITH EXAMPLES? MAYBE SOME ACTUAL SITUATION OR WHAT A NON--- WHAT TAX EXEMPT

FOR TAXABLE [INDISCERNIBLE] >> A VERY GOOD EXAMPLE RIGHT NOW IS NAT ONE OF OUR JOINT COFINANCIAL ADVISORS TO DFW AIRPORT. THEY HAVE A SUCCESSFUL COMMERCIAL PAPER PROGRAM. AND WHILE THEY ARE DOING THESE RENOVATIONS TO THE TERMINALS OUT THERE AT DFW AIRPORT AS THEY ARE IN BUSINESS WITH SOME OF THE CORPORATIONS BUILDING HOTELS ON THE PROPERTY. AND SOME RETAIL SHOPS NOW THEY ARE GOING TO BE ON THE SOUTH ENTRANCE OF THE AIRPORT, SOME OF THOSE THINGS THAT THE AIRPORT HAS TO STEP IN AND PAY FOR AS PART OF THOSE DEVELOPMENTS ARE THINGS YOU CAN'T ISSUE T

TAX-EXEMPT DEBT FOR. >> C. COMPTON: LIKE WHAT?

>> BEING IN PARTNERSHIP WITH A DEVELOPER THAT IS COMING IN TO DO A STRAIGHT SHOPPING CENTER. AND THEY WANT THE AIRPORT TO SUPPLY CERTAIN PARTS OF THE INFRASTRUCTURE OR SHARE IN THE BUILDING COST. DIFFERENT --

>> C. COMPTON: OH, SO THAT'S A PUBLIC/PRIVATE PARTNERSHIPS YOU

ARE -- >> DIRECTLY.

IT DOESN'T HAVE TO BE AN ACTUAL PARTNERSHIP BUT THINGS THE AIRPORT MAY HAVE TO PAY FOR THAT ARE NOT CONNECTED DIRECTLY TO PAVING RUNWAYS OR GATES WHERE THE AIRLINES GO OUT OF.

WHICH ARE PART OF THE RECOGNIZED USES OF THOSE.

ANYTHING WITH OUR PROPERTY THAT HAVE OUTSTANDING BONDS ON WITHOUT A LEGITIMATE IRS REASON FOR WHAT OUT] IF WE WANTED TO, URN IT INTO SOMETHING ELSE OR SELL IT, WE HAVE LIMITATIONS ON TAX EXCEPTTIONS.

THEY GO AWAY. WE HAVE

OUT] ABOUT WHAT -- >> DIFFERENT TIME IN THE MARKETPLACE TODAY. BOB AND I HAVE DONE THIS FOR A COUPLE OF YEARS AND NEVER SEEN THISES LIKE THIS BEFORE.

>> D. ZIMMERMANN: UNERRING, WHAT HAPPENS?

>> I WAS GOING O MENTION THAT. YOUR BOND LAWYERS THEY HAVE PERFECTED THE DOCUMENTS AUTHORIZED THE COMMERCIAL PAPER

[01:10:05]

BUT THOSE DOCUMENTS WILL ALWAYS CONDIGN A PROVISION IF OU WANT TO CHANGE OUT OF THAT VARIABLE RATE, OUT OF THAT RATE THAT CHANGES FROM DAY-TO-DAY OR WEEK TO WEEK, YOU CAN LOCK THAT RATE IN. YOU CAN GO INTO A DIFFERENT TYPE OF SECURITY. AND LOCK IN THE RATE AT WHATEVER

THE FIXED RATE IS THAT DAY. >> D. ZIMMERMANN: THE NEGATIVE RATE YOU TALKED ABOUT.

>> IT PROTECTS YOU. KEEPSYOU IN A BORROWING RANGE THAT IS LOW. IT'S A COMPLAINT TIME TO BORROW.

IF CHANGES IN THE MARKETPLACE MAKE RATES SPIKE 1, 2, 3% OVERNIGHT. YOU MIGHT WANT TO GET OUT OF WHAT YOU THOUGHT WAS A 1% DEBT AND LOCK IT BACK INTO TO A FIVE OR 10-YEAR DEBT INSTRUMENT AT 1%.

>> AGAIN, THAT GOES -- >> IT'S AMAZING.

THE CURRENTLY, THE CLIENTS WE HAVE THAT OUT] ARE PAYING IN THE NEIGHBORHOOD OF FROM 1% TO CURRENT INTEREST RATES ARE. AND IT'S AN AMAZING TIME TO TAKE

ADVANTAGE OF THAT. >> THAT GOES TO MUSTN'TING FLEXIBILITY FOR THE DISTRICT, THE ONE THAT CONTROLS THE

[6. Executive Session (if required)]

CHOICES. >> C. COMPTON: THANK YOU.

THE BOARD WILL NOW MOVE TO EXECUTIVE SESSION.

COUNCIL SECTION 551.071. AND PERSONNEL MATTERS RELATED TO EMPLOYMENT EVALUATION OF

* This transcript was compiled from uncorrected Closed Captioning.