The University’s General Revenue obligations take four forms:
1. General Revenue bonds and Commercial Paper Notes Program
The Board of Regents authorizes the issuance of General Revenue Bonds through the approval of a Bond Resolution. The University generally issues General Revenue Bonds to fund capital projects and/or to refinance outstanding debt. General Revenue bonds are payable from “General Revenues”.
“General Revenue” or “General Revenues” means all non-appropriated income, revenues and receipts of the University if and to the extent such funds are not restricted in their use by law, regulation, or contract. For example, the following items are restricted and, therefore, excluded from General Revenues:
- Appropriations to the University by the State from the State’s General Fund;
- Each fund the purpose of which has been restricted in writing by the terms of the gift or grant under which such fund has been donated, or by the donor thereof;
- Certain limited-purpose fees imposed upon students as a condition of enrollment at the University, including but not limited to services and activities fees, building fees (“Building Fees”) and technology fees; and
- Revenues and receipts attributable to the Metropolitan Tract Revenue (which consists of revenues from 11 acres owned by the University in downtown Seattle, known as the “Metro Tract”).
Unrestricted fund balances, to the extent that they were accumulated from money that was received as General Revenues, are included in and available to pay obligations secured by General Revenues. Any interest subsidy received from the federal government with respect to General Revenue bonds is included and available to pay obligations secured by General Revenues.
The University is authorized to issue Commercial Paper Notes from time to time in an aggregate principal amount not to exceed $250 million, for University purposes, pursuant to a Resolution of the Board of Regents adopted on July 16, 2009. The University issues Commercial Paper Notes generally to provide interim financing for University projects. The University provides self-liquidity for the payment of its Commercial Paper Notes, which are not secured by a bank credit or liquidity facility.
2. Leases and other contractual obligations payable from General Revenues.
- Leases Supporting Lease Revenue Bonds. The University has entered into a number of financing and other leases in connection with lease revenue bonds, which are payable from General Revenues. University lease payments are applied to pay debt service on lease revenue bonds issued by the Washington Economic Development Finance Authority or by nonprofit corporations issuing bonds on behalf of the University. Lease revenue bonds have financed the University’s multi-phase South Lake Union biomedical research facilities and other clinic, research and administrative facilities.
- Other Contractual Obligations. The University has entered into other contracts payable from all or a component of General Revenues and, in some cases, other revenues. Reimbursed State General Obligation Bonds (“Reimbursed Bonds”) refers to bonds authorized by the Legislature and issued as State general obligation bonds to provide proceeds to the University. These bonds are payable from all or a component of General Revenues and, in some cases, other revenues. The University also enters into equipment leases and leases in connection with State-issued certificates of participation (“Certificates of Participation”) from time to time to finance equipment and other property.
3. FAST Non-Revolving Line of Credit.
The University has entered into a Master Financing Agreement with JPMorgan Chase Bank, N.A., which serves as a line of credit to be drawn upon to finance short-term University assets. The line of credit currently allows for draws in an aggregate amount not to exceed $40 million through June 30, 2023.
4. Revolving Lines of Credit.
In August 2020, the University established two revolving lines of credit totaling $200 million to provide additional liquidity should it be needed. The agreements with US Bank and WAFd bank expire on September 30, 2024 and August 1, 2023 respectively.
Outstanding General Revenue Bonds, the Commercial Paper Notes, other lease or contractual obligations, and the University’s non-revolving and revolving lines of credit are equally and ratably payable from General Revenues without preference, priority or distinction because of date of issue or otherwise.