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After extensive review and analysis of the current system for funding capital needs of the University-managed fraternities and sororities, the University administration has determined that it is necessary to move forward with a plan to restructure the funding of capital needs of campus residential fraternities and sororities as part of the University's commitment to ensuring the long-term viability of the Greek system at Penn. The revised capital plan will allow the system to comprehensively address deferred maintenance and asset preservation needs of the University-managed chapter houses, and establish a self-sustaining capital reserve to fund on a life cycle basis the long-term maintenance and preservation of the OFSA housing stock. The plan will provide approximately $10,000,000 to address the capital needs of the system during the upcoming five fiscal budget years and will ensure the availability of needed funds for asset preservation and maintenance needs beyond that period.

Funds to implement the plan will come from three sources: a significant $2M University capital grant, a University-funded $3M low-interest line of credit, and market adjustments in occupancy rents and fees. To minimize the disparity in financial impacts to individual houses, the consolidated capital funding model will combine unpaid balances on all currently outstanding code-upgrade and asset preservation loans into a single loan with funds for repayment provided through the consolidated capital fund.

Details of the new funding model and the model's specific impact on the budgets and capital programs of individual houses are still being finalized. OFSA and the University's Division of Facilities and Real Estate Services will provide more details regarding the new funding model in meetings with the alumni leadership of individual houses later this year. The plan will be implemented beginning in fiscal year 2015 (July 1, 2014).

We discussed the merits of this plan from Phi Phi's perspective. While we will yield the balance in our Capital Improvement Fund to this pooled resource, we will benefit from the larger pooled resources to make needed life safety improvements such as electrical upgrades and a new stair tower to replace the fire escape. This plan will allow our Board to plan for larger capital investments without incurring excessive rents. It is important to note that this plan will ensure that all alumni contributions to our Residential Operations and Maintenance Fund (600631) account will be maintained for sole use of Sigma Chi.

- By Mark Kocent '82