ML20059K170

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Submits Decommissioning Funding Rept,Per 10CFR50.75(e)(2)
ML20059K170
Person / Time
Site: Rensselaer Polytechnic Institute
Issue date: 09/13/1990
From: Lawler P
RENSSELAER POLYTECHNIC INSTITUTE, TROY, NY
To:
NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
Shared Package
ML20059K164 List:
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NUDOCS 9009210200
Download: ML20059K170 (25)
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Rensselaer

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Yice Prnident for Finance september 13, 1990 a

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l Document Control. Desk U.S. Nuciv - Regulatory Commission Washiri,.b. R 20555 RE:

,.4. usa v 1 of Decommissioning Report w %e; ec^ Polytechnic. Institute e s Critical Facility m-ivv

. cense No..#CX-22

Dear Sir /ru,

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Pursuant to 10 CFR 50.33 requiring a report to-the Commission indicating how reasonable assurance will be provided, that funds will be available to decommission its research i

reactor, Rensselaer Polytechnic Institute submits the enclosed Decommissioning Funding Report for.the Rensselaer' Critical Facility, providing the information required by 10 CFR 50.75(d):

i a) cost estimate for decommissioning the facility; l

e b) assurance in the form of a certification that'

'I decommissioning funds will be available.

With regard to item (b) above and pursuant to 10 CFR 50.12, Rensselaer requests an exemption from the list of acceptable methods provided in 10 CFR 50.75(e) (2).

Reasons for the request are stated in the certification, attached as Schedule A.

We believe that the report fulfills the requirements of 10 CFR 50.75 as applicable to the Rennselaer Critical = Facility Reactor.

Please address any questions concerning thik matter to l

i Dr. Robert C. Block, Chairman, Nuclear' Engineering & Engineering i

Physics, with a copy to the undersigned.

Sin

oly,

/

Paul J. Lawler I

i PJL lag cc:

Dr. Robert C. Block Richard E. Scammell Renselaer iblytechtse Institute

  • Tmy, New York 12180-3590 * (518) 276 6426 5009210200 900914

.{DR ADOCK 05000225 PDC.- -

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SCHEDULE A CERTIFICATION AS9URANCE THAT DECOMMISSIONING FUNDS WILL BE AVAIIABLE Paragraph 75(e) (2) of 10 CFR Part 50-stipulates that, for.

licensees other than electric utilities, acceptable methods of providing financial assurance for decommissioning include, "in o

the case of Federal, State, or local Government licensees, a' statement of intent containing a' cost estimate _for decommissioning, and indicating that funds for decommissioning j

will be obtained when necessary."

l There are 47 universities operating or owring non-power reactors (plus four~ more,'>ssessing critical assemblies). _ ' All-but four of the reactors (4IT, Rensselaer Polytechnic Institute, Cornell University, and Reed College) are state-owned.

Hence, in most cases, a statement.of intent by an authorised' individual qualifies as_an acceptable method of providing ffnancial assurance for decommissioning.

Rensselaer Polytechnic Institute contends, for the reasons set forth below, that a statement of intent by ths Institute should e.lso qualify as an acceptable method.

For this purpose, Rensselhar requests a1 exemption from the list of acceptable methods as provided in paragraph 50.75(e) (2), i.e.:

prepayment,.

.l eternal sinking fund and/or surety or other guarantee method, i

and requests that the commission accept this Certification that-funds for decommissioning will be made available when necessary.

The following brief dese 1ption of-the Institute's financial.

status supports such certift:ation.

Included is information regarding the Institute's total assets, total liabilities, net worth, operating income and expenses, and also other revenues.

Data is from the Rensselaer Polytechnic Institute Financial Report for the year endislg June 30, 1989 (enclosed' herewith)-

which also contains an " Auditor's Report".

BAIANCE SHEET 6/30/89 Total assets

$444,962,000 l

Total liabilities 89.201.922 Net worth

$355,761,000-1

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SCH5DULE A i

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STATEMENT OF CURRENT OPERATIONS i

Year Ending f/30/89 j

Operating Revenue and Funds

$152,459,000 i

1 Total Expenditures / Mandatory Transfers 146,622,000 i

Non Mandatory Transfers 5.775.000 Excess of Revenue Over Expenses.

1,062,000 I

GIFTS. GJ1NTS. BEOUESTS

)

Trends in the Institute's financial stacus in:this regard are positive as may be seen by Renssalaer Polytechnic Institute Financial Report for the years ending June 30, 1989 and 1988, which show steadily improving totals over a two-year period.

Parthermore, Rensselaer's ability to raise additional capital when desired is being dancnstrated by its present

$200,000,000 Capital Campaign, which has reported $106,500,000 raised toward the $200,000,000 goal sin 0e announced in September of 1989.

This evidence of financf't viability should serve as justification for the granti exemption.from requirements.

of 10 CFR 50.75(e) (2).

Even ir v..e projected 1990 $50,000 decommissioning cost does increase by an average of five percent (5%) per year over the next twenty (20) years, the total would only be $138,000 in the year 2010, easily covered both by l

Institute assets and ability to raise capital.

The above stated information is certified by the undersigned.

f Paul J. Lawler

~N Vice President, Finance A

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Ikpartnent of Naclear Eagineering & Engineering I'tefsics DECOMMISSIONING FUNDING REPORT September-1990' Rensselaer Po l ytechn i c i nst i tute: Reactor Cr i t le..? l - Fac i l i ty FaciiIty Operating License No, eCX-22'

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This. report has been prepared for the U.S. Nuclear:

Regulatory Commission by:Rensselaer Potytechnic Institute pursuant to 10:CFR'50.33(k) (2).-and 10-CFR:50.75.

1.

coat-Estimate for Decomm I n n l or,LDS In scoordance with NRC'sofInal~ rule published JuneL27,

'1988.(53 FR 24018). address i ng C 3co.wni ss ion i ng p l ann i ng needs -

i and the assurance of the availability of decommissioning l funds, Rensselaer-PolytechnicLinstitutefhas conducted'an

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Internal study inE1990.1

+

-m The Renssesser Critical Facility,Ja one'-story concrete N

building, is located-In Scheaectady, N't on property. owned by-B Rensselaer at the-Schenectady i ndust r i a l;. Park.

.The' reactor:

E Is of extremely low power and operates-'atRiess;thanL100>

watts.

The only radioactivity !s-In the fueliand the:

s sector Internal structures.. ' The 'ou l I d l ng. :I s checked for

-m

,,.itaminatlon Quarterly, and' samples of.earthisurroundIng the facIIIty have been tested.for radloactlvity. - A 1,1 surveys to date have Indicated thatJthere is>no:

contamlnatlon or radIsectivity above naturaIibackground!In.

or around the building and the' surrounding oroperty..

The fuel used in the reactor, belongs to the U.S; Govtrnment', which wlil pay all costs of transportingithe-i fueI upon decommissloa'ng of the'fac11Ity.

Once theifuei j

-has been removed, the water Internal to'the rsactor must be dra lned and meast' red for radioactivity., No-radioactivity has ever been coserved in the reactor water. -Then-the~

reactor parts WIlI be dIsassembied and prepared =for shipment.

RensseIaer would be responsibie for crating and loading the parts.

Fuel shipping containers.'necessary 1or shipping'the fuel are available to Renrsel.aer from the DOE.

_I Jonmn Engineering Center (518) 2764102 = Gaerttner l2boratory (5M) PL6650

s Rensselaer iblytechnic in.# %

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.-The non-fuel reactor components are also owned by the United-States Government.. Costs of' shipping. reactor

. components tofa Federal repository _may also.be' covered by the' Government.

Rensselaer believes that the decommissioned building would be usable, and could be. sold to Ja-buyer without any decontamination. procedure..-NRC'hasiadvlsed.that: there is no need to demolish the bulldinge lf^It;is not contaminated, and-thus the building!is an asset'and-notia liability;

Since' radioactivity contamination is' tested regularly a

l'n the sol 1, building WallsLand floor,: In reactor' water.and in other components, and has not beenLfound to be above natural background, Renscelaer would not be required to-l dispose +of any radioactive material.., Radioactive sources would be moved to' the Rensselaer: campus-for f urther use.

The-cost of radloactivity testing, packing _and crating,-

'f writ (ng=up all reports,.and the-like is estimated at.

$50,000.

There'wlli be no need:to clean the Rensselaer Crl=tical Facil'Ity land, since.the land has not'been i

contaminated by RPl.

The adjustment factor set forth I n' 1 0 1

CFR 50.75(c) (2) is not applicable to Rensselaer's decommissioning costs since factor B is not.. relevant,: there.

beingfno waste-to. bury, e

. Essentially, the $50,000 '1990 basenestimeted cost will~

Increase = annually only by a higher wage factor to-cover.

testing, preparing reports,. crating and' loading.- Duringithe last three years, Re."scelaer'salarles'have averaged

.e increases of 5%:per year.

It is estimated 1that;the $50,000 1

cost wl'l incree.se by an average off5%-per,Qar during"the'

/

next twenty years, s i nce Rensselaer persor,ael would.be responsible for all aspects of decommissioning..

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D, 6-(

Robe r\\ ~ C. Block,EHehd Dept. of Nuclear Engineering &.

Enginecring' Physics Distribut:en:

D.R. Harris

-R.'Ryan.

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Bergles G.

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FINANCIAL ' REPORT s

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.lj INDEPENDDff ACCOUNTANIS' RhART Board of Trustees

'i Pensselaer Polytechnic Institute L

Troy, New York

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9 We'have audited the balance sheet of Renssela'er Polytechnic Institute as'of June 30,-1989, and the related statements of charges'in fund' balances and.

current funds revemes, expenditures,: and other es for the year then 1

ended. 'Itwae financial statements are the; responsibility _ o'.' the Institute's,

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a.. Jour responsibility is to express an opinien tm these financial statements based on our audit.

3; We conducted our audit.in accordance with 7.sierally> amag*=4 audi standards. 'Ihose standards require that w plan ltund'perfonn the a t to,

octain zenscmable assurance about 1durther the fin ancial stataments are free of L li natarial misstatement. -' An audit includes-aminiag, on a test basis, evidence supporting the a n.1. and disclosures in ths fi'.nancial statements.: -An auL t j

al.so inclu:les naamani'p the accounting principles used _and significant...

estinct as inade by nenigsmarit, as well as evaluating the overall financial _ -

stateL M preuntation..We believe that our' audit provides a remnanable basis J

- for our opinicn.-

In our opinion,: the. financial statenares referred to above presentifair.'.y, 'in' j

all material i. sMw, the financial position of Rensselaer.colytechnic '

l.

Institute at June 30, 19_89,. and the changesnin fund'balancas and current funds:

revenues, expenditures,' and other changes for(the year;then endedtin confonnity

. with generally accepted accounting principles.1 m

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As descrijood in the Notes to the financial statementsf the Institute has 0

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,i adopted the provisions-of Statement of Finarcial Accounting Standards No. 93 -

U for omiputing depreciatic7 in 1989.

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RENSSF2.AER PCLYNOINIC INSTIWE - Balance Sheet at June 30,1989-(in thousands),~ with ocagarative 1988 totals 2

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'IbEm1 o? All Funds

-1988 1989 V

bSSEIS Cash

. 183.

l 212 Investments, at market 219,244!

.242,634f Accounts receivable and' loans to students-

'30,182-

~33,774i Inventories 1,713.

.2,142 4

Preonid expensas and othar hasets 4,570

7,737; Deposits inith bond trustees 18,1322 12,390 Land, bu.ildings and equipment (net;of depreciation allowances'of-146,073.l

$72,555'in 1988 and-$82,216 in 1989) 135,146 Due-from (to):other. funds, net!

-Interfund borrowings Total ~ Assets

$409,170l $444,962-7 j

LIABIIJTIES Accounts payable,and accrued expenses

'$ -8,985' '$'10,691' Payable to Ransselaer Technology Park

~

282 '

-1763' j

Deposits 535 1 ',465 '.

j

-Deferred revenues

-3,525 "3,111:

long-term debt 67.523 73.171 1

'Ibtal Liabilities 80'.660^

89.201 y

FUND BAI.ANCES Current fundse 24,209-l 25,271:

' i Federal loan p u y a s 19,383..

~19,951' Other loan programs

2,701'

'2,830 Endowment

110,954.

i128,083:

Quasi-endowment

64,585)

'70,1519 Life income

12,923 '

14,236.L Plant funds:

j Unexpended 3,514;

,3,489(,,,

Renewals'and repla m mu h '

2,281:

l2,255

  • Retirement of indebtedness
8,148i "14,6841 Investment in plant 79.622-

'74 811' 1

q Total Fund Balances 328.320 355.761 a d

'Ibtal Liabilities and Fbnd Balarces

'$409,170.

$444,962:

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'Ihe accongsnying notes are an integral part of the financial stetanents.

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J QJrrent Funds Ioan and Life P]a%. -

IThumLicted Dar.iana*M h icted funds Incane Funds Punds

=133 11

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'l 9,755

$' 9,862 1,506 194 221,170-147-3,077

'46'

-7,854 22,540 247 10 -'

1 2,142

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7,650 87;~

12,390 l

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.i 146,073.

I (3,846) 3,846 2.718 (2.718)

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$ 21,620

$ 9,908

$ 9,371

$ 22,781

$22h438

$159,835'

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$ 7,961'

$ 2,658 72 763 4

605 539 321-3,111

.t 8.575 S'64.596

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12.440 2.658 539' 8 %8 64.596i 9,189 7,250 8,832

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$ 19',951 2,830 ij

-128;083 70,151--

14,236<

-3,489, 2,255, 14,6842

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9.189 7.250 8.832 22.781 212.470 95,239

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$ 21,629

.$ 9,908

$ 9,371

$ 22,781

$ 221,438

$159,835' k q

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RDNAER POLYTBOINIC INSTI'IUIS - Stati:z ent of dianges'.in Fund Balances for the year ended June'30,L19891(in thousands),;with ocuparative 1988 totals-t

' lor 1 of All' Funds 1988 1282-REVENUES AND 01NER AIDITIONa o

1 Student tuition and fees:

$ 62,39d

$ 67,908-Auxiliary entegrises' 18,040 20,851:

Gifts, grants'and contracts 52,8441

60,966-
Realized and unrealized-

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12,790 Income from investments 10,741 4

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gains (losses) on'in w i==(us '

(11,690)-

16,988

-Interest on loans 557 595; Other 2;114-2.135-4 t

Total Revenues and:

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Other.A% tions 135.00R_ _,182.233

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EXPEND 1'ItJREE a G A7mY TRANSFERS AND OIHER tW GIONS.

Educational and general l 104,023'.

119'211 Auxiliary entegrises.

15,283 4

16,066 Life inocne distributions

679L 695' Interest paid on debt l4,439' 4,542 Noncapital projects 711-362-2 Depreciation 8,%4 9,6613 Plant' disposals

~893[

.3,083 Other 688i

. 872 --

Mandatory transfers:

Debt service Matching grants 7btal Expenditures, Mandatoryf 154.792 Transfers and Other Deductions--

'135.680_;

OIRER 7RANSFERS TO(FRCH)'

Quasi-endowment.

Major gifts and harpatS Unexpended plant Renewal and replacement Other 7btal Other Transfers-Net Increase.(Decrease) before curiulative.

effect of adopting depreciation.

(678) 27,441.

FUND BALANCE AT BEGINNING OF YEAR AS PREVIOUSLY REFORTED 409,857 328,320 Curallative effect of charge in accounting-for depreciation

-(80.859)

FUND BALANCE AT END OF YEAR '

$328,320- $355,761-The -r-anying notes are an integral part of the financial statements.

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- Plant 1/

Unrestricted Designated Restrictad Funds Incame Funds Funds

~$.65,8775 LS'.1^919.

112' 20,815

'36'

-'14,575

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34,60.'

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$._ : 9',237..

.$ 2,205 7,988' 183:

3,081^

696_

_842 i

- 2,1272 25-

-9; 14l,757 70 595-1.241 636'

'222.;

29 112.623 2.786

'38.050-967 24.690 3.117'-

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82,260 3,599' 36,924i (3,572),

j 16,244 112

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'I 695-30.

L4,512-1 362-

.9,661:

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~.3,083

'j 307-

!367 198 i

1 7,436

-(7,436) 757 55 (775F (371 1

106.697 3.776 36.149-27Q_n 1.092-

-6.808 0

't 159 164

'(636)-

313' j

115 (25) 422.

(139)'

.. (373).

3 1,042 2,346 975

.(4,363) 567 (567)~

l 1.238 (1.478) 886

._ _ 3RD (62) 3.121 1.007 1.647 (410)

(5.365).

2,805 (1,997)

-254-

'697:

.24,008 1,674-6,384 9,247 8,578 22,064 188,462 93,565_

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$ 9,189

$ 7,250

$ 8,832

$ 22,781

$212,470

$ 95,239 q 1 a, :

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1 RDNJAIR POL,YTB}NIC INSITIVI'E - Statement of Current Funds Revenues, Experuiitures, and Ottar Changes for the year erded June 30, 1989 (in thousands), with coup.rative 1988 totals idtal 128.B 1982 l

a@ AWES l

In xational and general:

Stadent tuition and fees

$ 62,396

$ 67,908 Stata appvgiaticms 2,822 2,736 Federal and State grants and contracts 20,938 25,739 Private grants and coni. tacts 9,629 9,502

)

Private gifts 13,860 11,213 Endowment inoame 7,288 9,342 Current fund investment inoame 1,502 1,910

)

Realized and unrealized gains

~

(losses) on inhi. mends (1,125) 2,152 Sales and services of educational activities 1,179 1,145 Other 676 961 119,165 132,608 Receipts in excess of amounts recognized as revenues (1,5821 (254) j

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'Ibtal educational and general 117,583 132,354 I

Auxiliary enterprises:

Housing and food service 10,278 11,964 Field House 945 934 Rensselaer Union 4,668 5,433 Athletics 123 150 Health service 998 1,096

'Iblemmmunications 1,028 1.274

'Ibtal auxiliary enterprises 18,040 20,851

'Ibtal Revenues

_135,623 153,205 EXPENDI'IURES AND MANDA1tRY TRANSFERS Educational ard general expenditures:

Instruction 41,241 43,541 i

Sponsored research 18,236 21,201 Departmental and interdepartmental research 7,994 7,357 M

  • ic support 9,661 10,146 i

Student services 3,476 3,841 Institutional support 5,848 9,900 Operation and maintenance cf plant 7,862 8,490 Scholarships and fellcrehips 14e684 17,028 Other 1,013 1,279

'Ibtal educational and general expenditures 110,015 122,783

'Ihe accycuiying notes are an integral part of the financial statements.

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thirastricted Designated Rastricted

-$.65,877

$ 1,919

-112

' 2,736-i 6,328-19,411 l

2,210

.7,292 3,301

.12'

.7,900 6,261 3,081 1,727

_183-

. 2,127l

'25.

800 "264 81) 441 372

-148 1

91,808 2,750>

'38,050=

f254i 91.808 2.750'

-37.796'

-. 1 11,9644 932 2.-

5,431 2L 140

'10.

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1,074-

.22 1.274 20.815-36'

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112.623 2.786

'37.796

-i 40,953

-1,557 1,031-21,201 4

103 854 6,400 9,062 239

-845 3,796 12 33 a

9,395 392

'113 q

8,226 264-10,602 6,426

-123 545_

611 i

82,263 3,599 L36,924 j

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il RENSSEU2R P0tXfECSIIC INSTITUIE y Statement of Current Funds Revenues,-

.ExpendiGrest and Other Changes for.the year ended June 30, 1989

'(in thouards), with ocuperatiw1938 totals l(Continued)1 t

9ttni 126.8 1282 i

EXPENDTIURES AND IGNDNIUPY 7RANSMRS:.

.i (continued)

Mandatory transfers::

Debt service' 3,524.

3,802.'

Current restricted fund'natchirg grants loan fund matching grant

'37 y

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Total educational and general 113,539' L 126,622-Auxiliary enterprises expenditures:

Housing and' food service-

-8,441

,9,044; Field Mouse

'. 869_ -

951:

1 Rensselaer Union 4,175~

4,542

, Athletics 465-544; t

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Health service 1,046-1,0247 TelecannJnications 287

'261-Total auxiliary. enterprises expenditures J15,283 J16,366c,

Mandatory transfers:

Debt service-3,6 E

3,634'
r Total auxiliary enterprises.

'181908- '

20 ',' 000 ' -

4 i

Total Expenditures and j

Mardatory Transfers 1 132,447 ~

146,622 1

OIHER TRANSFERS TO(FRCM)

QJasi-endowment

( 3,286) '.

(313)-

i Major gifts and hs=? %

' 1,214 '

512~

Unexpsded plant

,1,563^

4,363.

1 Renewal and replacement

+ 639 567 Other

.525 646-

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7btal Other Transfers:

655

. 5.775.

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Total Expenditures Il

'and Transfers 133.102

152,391 Receipts in excess of amounts j

recognized as revenues 1.582 254 i

i Het Increase (Decrease)

.$ 4,103:

.$ 1,062.

- f in Fund,Salances The NO--+ Hying notes are an integral part of the financial' statements. <

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Unrestricted Designated Restricted i

3,802

.55

'(775):

i 720-37-

'l 86.819'

'3.654_.

~36.149 i

L8;942-102-

'-l 929-

'22.

l 4,542L d

546'

-(2)

L1,024 l

~261-16,244 122-3.634 i

r 19.878 122 106.697 3.776'

'36'149-

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159 164 (636)-

,j 115~

-(25) 422 y

1,042-.

. 2,346!

975 L!

567 1.238

-f1L478) 886-3.121

_1,007 1.647 i

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1G9.818 4.783-'

~ 37. 7%

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$ 2,805

$(1,997)~

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1 RENSSELAER PCLYITCHNIC INSITIUTE - Notes to 'the Financial Statements n

BASIS OF ADCDGfrIE

' thew.--iiying financial statementsLhave been prepared'in avuw.darc+ with 4

Lfund accounting principles applicable to colleges and' universities. ' Fund accounting 3s:the suci=:iure by hhich rarmroes are classified ~ for accounting purpones into separate funds in ama-air with,!and in nhnarvance of,1 limitations and restrictions placed on the.'use of the resources by dcas4=

a

'and Trustees of the Institute. Separate amenits are maintained for each und..In the +x

,+nying financial statenants, funds that have similar:

characteristics have bonn ocabined-into fund gtcups.

E l Service,,:rather than profit, is the objective of an artrational' institutions 1

Ihus, the primary reporting obligation of.' colleges and; universities is one' d

of-accounting for resources rectived and used rcither than forithe determination of net income. Accordingly,ithe acocepanying statenants of<

current funds revenues,: expenditures,i and other chr. gut reflect statements of financial activities of current funds related to thehru.t.ing period.:

'Ihey do not purport to present.the' results of operationsf or the net inocane or loss: for the period as would a statamartt of inoone or a statement of q'

.revenum and expenses.

.1 All capital expenditures for, and gifts of, land,'buil @ [and equipment!

l are recorded as additions to the plant fund.and are carried at' cost or:at.

the fair market value on the date of donation in'the'casefof donated) j equipment, :less anra-lated dur ciation, otsputed on a straight-line basis over the estimated useful lives of buildings;(50 years) and equipment (3-20 1

_ years). L'Ib the ' extent that current funds are used tolfinanco plant ' assets,.

the amounts so provided are accounted for'as: expenditures,<in the' case of; 3"

normal replacement of movable equipment'and library books; nandatory transfers, in the case of required provisions for debt anortization,,

including. interest; and transfers.of a nonmandatorys nature iniall other 1

~

Expenditures for new cumbuction.and major renewals and cases.

replacements are charged to the appropriate plant fund balance where the; applicable resources are held.

Gifts and invi= Land income; are recognizedhs revenue when received.

Noncash gifts are recorded at fair market value at the date of donation.

Inventories are stated at the lower of' cost or current market value, hnmari

+

(

upon the first-in, first-out method.

~

i Revenues and direct expenditures 'in connection with the current summer

[

school svycuu are deferred at June 30 as this pv:pam is principally an activity of the stv=riing fiscal year.

ACCOUNTING WANGES

'Ibe Institute has elected early adoption of. Financial Accounting Standards No. 93, " Recognition of Depreciation by Not-for-P ofit Organizations", which requires the recording of depreciation of long-lived' tangible assets in the -

plant. fund. 'Ihe'effect of the retroactive application of.the accounting change for fiscal years 1989 and 1988 is to reduce the net increase in

. 4

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RDRMAER POLYIECHNIC INSTI'IUTE ~~ Notes to the Financial Statements ACCOUNTING GANGES (continued)

.the plant fund balance by $9,661,000 and $8,964,000, r=5pafdvely. Thei cuellative effect of the accounting change is to reduce plant fund balarce as-

previously reported for-1988 by $80,859,000.

In addition to'and in anticipation of. adoption of this Standard, the Institute

_has adjusted its accounting r m ds to reflect the results of e physical inventory of plant assets, which included independent appraisals of donated,

equipment, finalized,during' fiscal year 1989.- The offect of:the adjustment,:

amounting to $17,268,000, is reflected in the cumulative effect on fund

. balance, offset by a reduction in physical assets, for..ficoal year.1988.

FUND BALANCE The accounting-principles and reporting practices-of the current designated 3 fund are the same as those utilized for the current unrestricted fund.a7he current designated fund ror wents a. separate-identification of current.:

uree=L-icted financial' resources which have been segregated by the Trustees,

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for specific purposes.

Current restricted fund balances represent resources the principal of which.

my be expended only for the purgmes stipulated by the source of. such funds.

1 Loan fund balances my be utilized only for the applicable loan gw-asL specified by the spasscr 'or;the Institute.

Ehdowment ' fund balances require; injapetuity, that the' principal be ' invested f

and only the income.fran these :investants be expended. L Quasi-endowment funds have been established by the Trustees for the same purposes as endowment funds; however, any portion of quasi-endowment funds may be exper.kd. Life.

Income fund balances require that the principal be invested;end,,for a' period?

of time, the income from such inv=Lamm>Us be distributed to the dorer., Upon expiration of the contract, the fund belance will~ be credited to the ~

appvpriate fund in accordance with the purgmes specified by the donor.,

Plant fund-balances include the Institute's net equity in' physical l facilities,4 funds for debt service requitaamits and resources which may be experded:only for plant facility pirposes as specified by the Trustees:or the source of such resources.

)

omER INIUMATIN otrrent urg=L-icted fund accounti. s::eivable are rot of collectibility.

allowances of $107,000 in 1989 and.3dC.

Ioans to students ra.udad 'in the ~

loan fund are net of collectibility allowances of $1,101,000 in 1989 and 1998;.

g Interfurd balances of the plant fund include internal borrowings for capital'-

additions to be liquidated either thrm,h future outside debt. financing or.

through internal debt service charges a the current fund. At June 30, 1989, appruximately $2,718,000 of such internal borrowirq3'from the otrrent fund;

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4; RENSSETAER POLYTECtWIC INSITIUTE Notes to the Financial Statements-OIHER INFWl9210h (continued) d 4
are scheduled for liquidation through noneandatory transfers over periods' ranging from one to twenty years. All'other interfund balances are comprised of short-term transactions and are -liquidated on a. regular basis.-

- 3

Pledges oE private support are recortled'as revenues and other additions to fund. balances upon receipt of_the gift. Out tading pledges approximate;

$17,612,000 and $8,040.000'at June 30,- 1989 ' and 1988, i. pid.ively. -

'Ihe ' Institute has been awattled appetncinately $24,008,000 and;$18,6L4,000 as-of June. 30,11989 and 1988, r%-tively, of remocricted grants and cuhacts -

1

which, as of those dates,;have not been advanced or expended.

j Oertain 1988 amounts have teen reclassified to conform to the 1989 1

g as==Aation.

)

INVESIMENTS All investments with readily determinable; market values have been rapited:..

.l in the 1989 and 1988 = financial statements at market veduer Investments with.

market values not readily determinable have been rmnud at oost." Realized; gains and losses are recognized when securities are sold.

'Ihe Institute has cczenitted to investing l$4,042,000 in various limited i

pertnerships over the next four years.

i

'Ibe carrying value and cost of investments held by the Institute at June!30

~

is as follows:

jl (In' mbr==ndai

~ 1)R9

'1988 1

Carrying.Value Carrying,Value~

j

.fMarketi QQst fMarket)

Qgst 1

-f Short-term in % L=inds' S 30,356

$ 30,249 JS 54,331 1$ 53,510-Bc:1ds and notes 64,604~

61,686(

34,'117 35,202-Equity cecurities.

130,371 108,370; 115,230

'100,291 Real estate

.13,525 13,525' 12,174 12,174-Other 3.778 4.388

' 3. 39J

-3.371!

$242,634-

$218,218-

.$219,244 S204,5481

.y

'Ibe distribetion of these investments among funds is as follows:

\\

(In 'Ibe==nds) -

-1989

~1988 l

Carrying Value Carrying Value (Marketi Qgst (Market)

Qgst j

Current Pbruis

$ 21,123

$ 21,179

$ 22,702

$'22;614' Ioan Funds 194' 187 945

' 947 Endowment and Life Income Funds 221,170 196,705 195,450 180,840 Unerf=ded Plant Funds 147 147 147 147

$242,624

$218,218

$219,244

$204,548 y

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RDtWJAER POLYTED9fIC INSTITUIE - Notes toLthe Financial Statements i

INVESIMENES (continued)l 2he Rensselaer Technology Park, a real estate development project of:the endowment. fund, hanama operational effective July 1,,1984. 'Ihe goal of the project is to petanote autually beneficial reseamh, anadamic and financial ^

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. relationship between the Institute and business enterprises while ulthasta'y.

petwiding the endowment fund,with a reasonable long tarin return on its '

investment.

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7t not assets of the Park,: amlusive of'long-term debt, amounted' to j

$1 753,000-in.1989 and $9,385,000.In 1988 and are included as part of the-

]

endowment fund real estate investments. Lory-terin borrowings were incurre'

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'in cmnsction with the,v.arhuction of Park facilities and are predad as..

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l liabilities of the' endowment fund at June 30. E7he; Institute's net equity.in

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i the Park of $2,178,000 in 1989 and $2,445,000 in 1988 islincluded'as part of-the quasi-endowment fund balance. Realized and unrealized l gains'and losses

- of the endowment fund include revenues from Park operations of $1,631.000L and $1,104,000 'and related expenses of $1,926,000 and $1~,384,000,- includinq

!)

depreciation expense of $305,000 and $270,000, ifor the years ended June 30,1

'1989.and 1988, respectively. Net cash generated frcza operations amounted..to

$89,000 in.1989 and $322,000 in'1988.

t IAND. BUIIDINGS. AND EQUIPMENP Land, buildings,'and equipment of the Institute consist of,the following_atl June 30-n-

'(In 'Mmaaridsr 1982 1 9818

]

Land

$ ! [4',854 -

.$ 4[6231

<g I '-

. M 1 dings.

.149,838 132,691:

Ll; nyd marit L

-70,513 63,209 Construction in pup. ass

'3.084-7.178 E

.228,289

.207,701

-(

Less m= lated depreciation 82.216 72.55S'-

$146,073

_$135,146-

=!

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RENSSEDJR POLYTfDMIC-INSTI'JUIE - Notes to'the Financial' Statements IING-TEEM DEBT Debt an$ Debt Service '

-Irng-term debt'of the Institute is comprised of tre following:

(Dollars in h =andai Annual Outstanding at-

.q Original Final.

Interest June 30

1 Amount Maturity Rate 1989 1988 U.S. Departaant of' Education' Cbilege Housing h ug mu (formerly HUD)

Donaltory Bonds:z '

Of'1952'

' $ 2,880-11992

2.75%

335 $

'445)

-Of.1956

.1,350?

1996i

2.75%:

278:

323 1988 Mortgage loan 3.500 2018 3%

3.500 2.570'-

7.730 4'.113.__l M Dormitory Authority of the~

State of:New York (DASNY)

W Series A 5,600; 1995 3.5 to 3.7%

1,615i 1,855' Series B 3,520-1998 4%'

1,510 1,635L Series C 6,000;

-2001-5 to 6.2%.

3,750; 3,940 J

Series D 10,600 20051

'5 to'6.5%:

,7,8651

.8,135' j

Series E-18,550 2007 5.9 to 6.75%;l14,842 15,250:

Series'1985 22,000--

2005 6.37 to 8.5% L19,188 20,302-1985 Educational Equipnent s

& Short 'Ibnn Capital Projects

-l i

Rvpwu Variable Rate Insured

)

Revenue Bonds 1,743'

.1989

.'5.75%L

', 78 519 1987 Educational Riuipment

& Short-Term Capital. Projects nupalii Variable Rate Insured Revenue Bonds 6.417 1995' 7.5%-

'6.103 J-74.430 54.951' 51.636 1

Industrial Developnent 1

Agency Bonds-(IDA):

Incubator Facility issue of 1981 700-

_ Ronsse19er Technology Park

- 1991 8 to 14~.5%-

520-.

'580 issues of:

1 1984 1,000 1999-l9.5%

087;

'941 1985 1,000 1999 9.5%.

906L 957 1 ~< BS 1,250 2000=

7.9 to 9.3'$

l'1801 :1,245, h-._

1%5 1,250 2000 7.2 to 8.5%

-1,204

1,250 1986 1,250 2001 7.2 to 8.5%

' 250' -1,250; 1988 1,338 2003 8.5 to 15%:

1 338

-959 1989 1.500

'.2004 10.24%

__.1., 2QQ O

a 9.288 d.785-7.182' j

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l RDINAIR POLYTB2MIC INSITIUTE - Nctes to the Financial Statensite 1

.p I

IDIG-TERM DEBr (continued)

Debt and Dett service (continued)

(in m anas)

Annual Outsi.anding at Oriainal Final' Interest June 30 l.

Aa5unt Maturity Rate 1932 1988

{

P

'New York State Urban Developnent Corporation (UDC):

High 'Ibchnology Incubators,Inc. $

200 1997 None 189 $s -195.

CII nortgage-loan-4.846' 2025 11.12%

4.823~

4 d}&,

5.046 5.012 F 029' Other 375 1997 9%.

- 310 338

{

l Total long-term debt

$96,869

$73,171 $67,523:-

]

Debt principal outstanding is reflect.ed net of unamortized bond discount I

and/or capitalized issuance costs where applicable'in the amount-of $820,000f j

and $913,000 at June 30, 1989 and 1988, respectively. Such costs are being

)

amortized on the straight-line method ~over the term of the related-indebtedness.

a Aggregate debt service payments due on' all long-term debt as of. June 30, j

1989 for each of the'next five fiscal years are:- 1990,.$9,313,000; 1991,

$9,358,000; 1992, $9,725,000; 1993, $8,993,000; and'1994, $8,989;000.

ilRD 1

'Ihe bonds mature serially and are collateralized by' first imxteges on real i

property having a cost of $5,601,000, a pledge of net' revenues.from the d

i operaticris of these dormitories, deposits with band trustees having a -

carryirg value of $523,000, and pledges of in%L-d.s in the endowment: fund having a carrying value of $181,600 at June.30, 1989.-

Subsequent to June 30, 1989, cash and inmLad.s of approximately $383,000 i

have bacn deposited with a trustee to provide for the defeasance of the i

principal arri interest payments remaining on the 1952 band issue."

L DASNY Series A through D and Series 1985 debt matures serially. Series E consists-of $1,400,000 bonds maturing serially through '1991, and, term bonds of.

i

$2,275,000 and $11,305,000 maturing in 1995'and 2007, respectively. Sinking fund insta11mants are required to provide for the retirei==d. of the term bcrids in amounts ranging frun $520,000 in 1992 to $1,175,000 in 2007..

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RDNAER POLYTBOMIC INSTIWFE - Notes td the Financial Statements B

LONG-TERM DEBP (continued)

DMINY (continued)

- '1he Dormitory Authority 1985 Educational.B:Juipnent and-Short 'renn Capital' Projects Fr4cuu Variable' Rate Insured Revenue Bonds will be repaid'over a four-year period.. The 1987 revenue bonds repayisant is hamad on average useful lives of equipment for which funds were disbursed and is currently; 1

estimated to be 7 years.-

1

. Dormitory Authority bonds Series A>through E anc Series.'1985 rap--ut debt outstanding under capitalized-lease-purchase arra.M. Revenues from; swissty having a cost of $65,216,000 at June 30, 2.989 are pledged to meet annual lease payments under these agreenents.

In addition, the Institute h.as'collateralized Dormitory Authority Series D,,

Series E and Series 19851;onds through~ pledges of-investments of,the-endowment funds having a market value at June 30,L1989'of $22,806,000..

All Dormitory Authority bonds are further collateralized by a plbdge of I

deposits with bond trustees having a carrying value of $11,799,000 at June 30,1989,'and specified portions of Institute tuition revenues.'

O The. Institute's participation in the Dormitory Authorityfl985 and 1987.

BducationaliEquipnent 'and Short-%rm Capital' Projects Fiveau Variable Rate -.

1 l

Insured' Revenue Bonds is collateralized by s w = Ly'having-a' cost of

$1,069,000,' equipment, and pladgan of specified portions'of Institute tuition revenues.

l 1

Principal payments on the IDA Bond of-1981 are $60,000 annually beginning:in 1986, with a final $400,000 payment due in=1991.

l The Ronsselaer 7bchnology Park IDA bands provide for interest.only for the first three years. Thereafter, annual' debt service requitou=d.s ranging-frca $11,000 to $1,229,000' including interest:are requirs.1 to amortize the bonds to maturity.

The IDA bonds are collateralized by first mutvpgas:en real'swnarty and'

^

security interests in equipment having a cost of $9,408;237.i Subsequent to June '30,1989. $5,300,000 in Civic Facilities Revenue. Bonds (Series 1989A) were issued to finance the Institute's acquisition and installation'of a new mainframe compiter and certain related equipment under an bistall-tt sale apas-d. between the Rensselaer Industriali Develw-al 1

Agency and the Institute. ~ The bonds mature serially with a final ~and--

i principal payment of $1,190,000 due.in 1994.- Interests rates:on the maturing bonds range from 6.00% to 6.35%.'

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4 RDm54AER RLYTEWNIC INSTI'IVIE -- Notes to the Financial Stataments 1i IDG TERM DEBT (continued) g

'Ibe repayment of funding provided by High 'hnchnology Incubators, Inc., a subsidiary of the UDC,1 began in the 1987 fiscal year with varying amounts due through the.1997-fiscal year.. Amounts due during.the repayment period are contingent upon the amount of the amual net project receipts, as defined in the E g -. at.

The minimum amunt of the total repayments due by -

June 30; 1997 is $200,000,1with a maximum amount due by;that date of-

$260,000.

l

'Ibe debt due High Technology Incubators,-Inc. is a general, obligation of the L Institute and is collateralized by a pledge of net project receipts, as ;

i defined.,

~

t 3he UDC mortgage loan bears a faceL amount of $33,500,000,~ without interest,:

and results frtaa the provision of assistance by New York State, through the" UDC, towards the. ue=L-oct. ion of the George M.;I.aw Center for Industrial:

}

Innovation (CII).. Approximately $28,654,000,lthe difference between the total of all pay.nents at the net present value of the liability hmt at a rate of 11.12%, has been reuu.ded as an addition.to the plant fund 4

balance. ' 'Ihe facility is laaaarl to the State of New York:and, -in turn,-

subleased to the Institute.o 'Ihe repayment schedule'for this loan is.

rap.vE=d.ad by the payests:dueito the State by,the-Institute under this-..

~l sublease and calls for,a total of.$33,500,000.'in repayments to1begin in.thet 9

1987 fiscal year at $600,000 per year, with increasisy annual payments due through maturity.

y

'Ibe UDC imu.t. gage loan is collateralized by a pledge of deposits held with trustees at June 30, 1989 totaling $69,000 and a first nortgage-lien'on the l

George M. Iow Center for Industrial Innovation.

'Ihe. Institute has delivuted.

i an irrevocable letter of credit in the amount of $3,000,000 as a.further I

pledge of perfonnance during thef.u=Luction period,_ which was discontimwi f

I August 1, 1989' i

OIHER

'Ibe other debt reflects a 'iote payable incurred in exchange.for a tract of land adjacent to the Rensselaer 'Iw::hnology Park. 'Ihe note requires annual payments of $57,000. 'Ibe loan incurred in ex2ange for a tract'of. land is a general obligaticn of the Institute andiis unsecured.

PENSICH PLANS l'

Rensselaer has two defined benefit pension plans, contributory and ne.ud.tibutory, whid, in total, cover suisuuitially all employees.

- 4 Fension benefits are based on the greater of an employee's career average pay or final ~ average pay.

The Institute adopted Financial Accounting Standards.No. 87 " Employers' Accounting for Pensions", for the year ended June 130,1988. 'Ihe adoption.of i

FAS No. 87 r=rh m i pension cost for fiscal year 1988 by approximately

$5,900,000.

_7

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'.!'_a RENSS12AER FOLYTBCHNIC INSTTIUTE - Notes to tne Financial:Statcaents PENSION PIANS-(continued):

'Ihe following table sets forth the 'contr11utory an2 noncontributary plans' '

ocabined funded status-and anounts recognized in the Instituta's balance sheets at June 30, ~ 1989 and 1988. 'Ihe: calculations were based upon data as.-

of or proje::ted to April 1,1989 and 1988,;I1aspectivelyi except for _enployee

~

census infamation which was as of July 1,.'1987 and-1986 and projected to _

m April 1) 1988 and 1987, ras g ively.'

(In 'nvumndsi-t

}{

1989-L Q 988 Actuarial r - n. value of benefit obligations:

(

Vested

'$f(43,848)'_.S(39,745)!

j

' W = lated

$l(45i346) $'(42,123)

!u

- Projectal

/$f(69,324) $ ' 65,252)L

, Plan assets at fair value',' consisting ofe L

group annuity _ insurance contracts and-stocks and bonds 104.757 98.378'

)

Projected benefit obligation less thar; plan assets 35,433 33,126-Unrecognized net loss 7,772--

'10,368.-

l Prior service cxast not yet recogrdzed _ '

.in net periodic pension expense 11'095-10.776 E-54,300 -

54,270

~l Remainirq tinacupilzed transition asset 47.257' 50~029' Prepaid pension cost

-7,043_

-S.

4,241 Net pension inoone incltded the following cupe/w: L fin 'nvuands)-

4 1989' 1988' Servi cost 2,958 2,504-Interest oost to projected benefit obligation.

=5,935 4,286 l

Actual return on assets (8,195)

L360' i

et amortization and de"erral (3.500)

(12.3671-Net pariodic pension income

$ (2,802)

$- (5,217)-

2 x

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'l RDISSELMR RLYTBOINIC INSITIUTE - Notes 'to the Financial Statements i

PENSIGi PLANS (contirmed).

As of June 30, the' weightet average rates forming' the basis of net periodic:

-j pension oost, the plans' funded status and amounts r % ized in the Institute's statenant of financial position'were:

1989 1988 1

1 Discount Rate

.9Jo%:

9.25%.

Expected long 'liarm Rate'of Return 9.00%

9.00%-

l-]

Salary Frug w ien

,6.00%.

6.00%

Net periodic pension inoame is reflected in current widaicted fund-operations under " Institutional support".

'Ibe Inctitute's funding policy'is based uponIand. in compliance with ERISA q

requir===(us.

1 Due to the-plans' respective overfunded 'tatus, no employer contributions:

s were made to either plan in fiscal years 1989 and 1988.-

'Ihe contributory plan was amended effective July 1,1988;to provide' post,

l retirement benefit increases at the discretion,of the Institute and to I

provide a final pay formula and change the minimum accrued benefit. Also, l

effective July 1, 1988 new employees do not have the, option to participate _

in the rgwhibutory plan. 'Ihe effect of the plan amen &nents are included in the calculation of prepaid pension cost as of-the years ended June 30,'

1989 and 1988.

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