How New York Dormitory Authority plans to fuel facility upgrades

The nation’s largest municipal bond conduit issuer is expanding an energy-savings program aimed at boosting future capital projects.

The Dormitory Authority of the State of New York announced Tuesday an expansion of its energy performance contracting offerings to enable healthcare and education clients to fund facility upgrades with future energy savings. Gerrard Bushell, DASNY’s president and CEO, said the new program utilizes a combination of the agency’s Tax-Exempt Equipment Leasing Program along with its procurement and construction services. He said DASNY will partner with an energy services company to develop, design, build, and fund projects that will save energy and reduce costs.

“Through DASNY’s new Energy Performance Contracting Program, DASNY clients will have the opportunity to pay for today's facility upgrades with tomorrow's energy savings – without tapping into existing capital budgets,” said Bushell in a statement. “The program offers a time- and cost-effective way to complete comprehensive energy upgrades.”

Bushell noted that the energy savings expansion is an integral component of the recently launched “One DASNY” initiative aimed at providing enhanced financial flexibility through a hybrid financing strategy that mixes tax-exempt and taxable bonds for projects that incorporate private use. He said the program will also aid in New York Gov. Andrew Cuomo’s energy goal launched in 2012 to achieve a 20% reduction in energy use in state buildings by 2020.

DASNY fast-tracked a series of deals at the end of 2017 for private colleges and hospitals when it was uncertain if tax-exempt benefits for private activity bonds would be preserved in the final congressional tax overhaul legislation. The conduit issuer giant finished last year with the second most bond volume in the nation behind only the state of California with $7.4 billion from 28 transactions. It had an outstanding bond portfolio of roughly $50.5 billion as of March 31, 2018.