WHY WE DO WHAT WE DO FOR CAPITAL FUNDING Capital funding drivers and issues for BAR Wayne Doty, SBCTC Capital Budget Director October 17, 2018 OUTLINE State capital versus operating funding Overarching goals Responsibilities Elements of the request and what they are based on Local expenditure authority Allocations & monitoring Hot topics 2019-21 request and next steps 2 1-2
STATE CAPITAL VERSUS OPERATING FUNDING Operating Relatively few restrictions on use Maintenance and policy levels Can be used to pay staff and operate buildings Capital Every dollar is appropriated for a specific use One-time funding Staff limited to delivering approved project scope 3 WHAT IS CAPITAL? A funding source for acquisition, design, construction or improvement of real property does not usually include master plans or feasibility studies Funding may be appropriated and allotted (state) or non-appropriated and non-allotted (local) Funds are spent self-performing the approved scope or through a public work process College self-performance is limited to work with a value of $90,000, or $45,000 if it only involves one trade RCW 28B.50.330 4 3-4
WHAT IS PUBLIC WORK? A procurement method for all work, construction, alteration, repair, or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or which is by law a lien or charge on any property therein. RCW 39.01.010(4) Community and technical colleges do not have authority to administer public work unless it is delegated by DES. 5 PUBLIC WORK VERSUS ORDINARY MAINTENANCE Ordinary Maintenance Repairing or replacing things that wear out with normal use Public Work Installing something new Something that can lead to lien on the property Something that requires a permit 6 5-6
OVERARCHING GOALS FOR STATE CAPITAL Support our mission Take care of what we have Consistent with college master plans We don t want a single square foot we don t need 7 FINDING THE BEST SOLUTION Programmatic Need Facility Condition Space Deficit? Yes No Minor Repairs by Severity Candidate for Renovation Candidate for Replacement Worse Condition Candidate for Additional Area 8 7-8
RESPONSIBILITIES State Board Own all property RCW 28B.50.140(8) Report all expenditures RCW 28B.50.090(7)(b) & (14) Single prioritized budget request RCW 28B.50.090(1) Allot funds from OFM and allocate to colleges RCW 28B.50.090(2) College Deliver scope within funding provided SBCTC Policy 6.20.30 Account for expenditures SBCTC Policy 6.30 Other agencies OFM allots state funding based on progress DES has public work authority and provides project management DAHP advocate for the preservation of historic and cultural resources 9 PIECES OF OUR STATE CAPITAL BUDGET M&O Fund Swap Minor Preservation Emergency funding Roof repairs Facility repairs Site repairs Infrastructure repairs Minor Program Improvements Major Projects Alternative Financing 10 9-10
M&O FUND SWAP Started as a way to use lottery funds in 2003-05 Moved to Building Fee in 2009-11 College amount equals original amount reduced in operating budget Now part of college minimum operating allocation 11 MINOR PRESERVATION System sets funding targets College emergency funding (fka: RMI) is based on its portion of system full-time equivalent students (FTE) and owned square footage (SF) 35% FTE + 35% SF + 30% SF >25 years old Repairs are identified and prioritized through facility condition survey Individual projects can t exceed $2M in state funding and must be completed in biennium State Board manages emergency and hazmat pools Adding new infrastructure category for 2021-23 12 11-12
MINOR PROGRAM System sets funding targets College funding is based on its portion of system full-time equivalent students (FTE) and owned square footage (SF) 30% FTE + 35% SF + 35% SF >25 years old Colleges identify projects to reflect critical goals of the college and serve to improve the educational environment, better access, deal with childcare, or student support services. Individual projects can t exceed $2M in state funding and must be completed in biennium 13 MAJOR PROJECTS System adopts selection criteria and either a funding target or minimum score Funded in two phases Implications for design build delivery We use a pipeline to maintain priorities and minimize gaps between funding phases Facility conditions and utilization are significant factors 14 13-14
EVERY MAJOR PROJECT SCORED ON A 100 POINT SCALE Overarching Criteria Applies to every project. Has 23 potential points. Matching Criteria Infrastructure Criteria Renovation Criteria Replacement Criteria New Area Criteria For projects with non-state funding. For projects with non-building infrastructure. For projects that include renovation of existing space. For projects that will demolish existing space and replace it with new construction. For projects that increase the square footage of a campus. Category-specific criteria always totals 77 potential points. 15 ALTERNATIVE FINANCING All financing for a capital purpose requires legislative authorization and approval from the State Finance Committee RCW 39.94 We use locally supported Certificates of Participation for land and facilities the state legislature does not typically fund Legislative authority is requested in the capital budget The State Finance Committee is: Treasurer chair Governor Lieutenant Governor Staffed by Treasurer s office and bond council 16 15-16
LOCAL CAPITAL The State Board must establish and administer criteria and procedures for all capital construction. RCW 28B.50.090(9) We use the local capital expenditure authority request form to collect information (fka: C8) Assign State Board project number for tracking State Board has delegated authority to the Executive Director for projects costing $1M, and less. 17 MINOR PROJECT ALLOCATIONS Minor projects allotted by OFM based on lists Allocated at beginning and lapse at end of biennium List changes can be made quarterly Emergency and hazmat pools allocated until gone Key to success: schedule all the work before the biennium starts. 18 17-18
MAJOR PROJECT ALLOCATIONS Allotted by OFM based on progress Predesign at beginning of biennium Remainder of design-phase funding after the predesign is approved by OFM Construction and related costs after bid Equipment after OFM approval of detailed list College must manage the project within the funding provided Keys to success: keep project budget up to date and don t let issues linger. 19 MONITORING State Board merges expenditure data from legacy and ctclink systems into CapTrack monthly and nightly, respectively Examples of allocation and monitoring screens on the next two slides 20 19-20
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2019-21 REQUEST Priority College Number Class Phase Project Amount Cumulative 1 Statewide 40000043 Preservation Fund Swap Preventive Facility Maintenance and Building System Repair $22,800,000 $22,800,000 2 Statewide 40000258 Preservation Complete Minor Works Preservation $23,739,000 $46,539,000 2019 21 SBCTC Capital Request for New Appropriations 3 Statewide 40000171 Preservation Complete Minor Repairs Roof $15,252,000 $61,791,000 Preservation Complete Minor Repairs Facility $38,527,000 $100,318,000 40000173 Preservation Complete Minor Repairs Site $3,310,000 $103,628,000 40000112 Program Complete Minor Works Program $39,841,000 $143,469,000 Wenatchee 30000985 Preservation Construction Wells Hall Replacement $29,531,000 $173,000,000 Olympic 30000986 Preservation Construction Shop Building Renovation $7,652,000 $180,652,000 Pierce Puyallup 40000293 Program Design STEM building $3,369,000 $184,021,000 Pierce Fort Steilacoom30000987 Preservation Construction Cascade Building Renovation Phase 3 $31,592,000 $215,613,000 Bellevue 40000168 Program Design Center for Transdisciplinary Learning and Innovation $2,839,000 $218,452,000 4 Statewide 5 Statewide Statewide 7 8 40000169 6 9 11 10 Preservation Construction Automotive Technology $23,376,000 $241,828,000 40000102 Program Design Center for Design $3,160,000 $244,988,000 30000990 Preservation Construction Allied Health, Science & Manufacturing $36,642,000 $281,630,000 40000130 Program Design Fire Service Training Center $2,802,000 $284,432,000 Olympic 40000103 Program Design Innovation & Technology Learning Center $2,552,000 $286,984,000 Bates 30000989 Preservation Construction Medical Mile Health Science Center $40,828,000 $327,812,000 Everett 40000190 Preservation Design Baker Hall Replacement $2,850,000 $330,662,000 12 Washington Shoreline Bates 16 30000988 Seattle Lake 14 17 18 19 Spokane Falls 30001458 Preservation Construction Fine and Applied Arts Replacement $35,663,000 $366,325,000 40000104 Preservation Design Center for Innovative Learning and Engagement 40000198 Preservation Design Center for Technical Education and Innovation 30000135 Program Construction North Clark County Shoreline 40000214 Preservation Design STE(A)M Education Center Everett 30000136 Program Construction Learning Resource Center Lower Columbia 40000106 Preservation Design Center for Vocational and Transitional Studies Spokane 40000107 Preservation Design Apprenticeship Center Grays Harbor 30000127 Preservation Construction Student Services and Instructional Building Columbia Basin 40000108 Preservation Design Performing Arts Building Replacement North Seattle 30001451 Preservation Construction Library Building Renovation Whatcom 40000137 Program Design Technology and Engineering Center Walla 30001452 Preservation Construction Science and Technology Building Replacement $8,796,000 Cascadia 30001453 Program Construction Center for Science and Technology $37,985,000 40000222 Program Design CC5 Gateway building $2,993,000 40000114 Program Design Triton Learning Commons $3,439,000 40000204 Program Design Health Sciences Center $3,821,000 $2,839,000 $369,164,000 $3,093,000 $372,257,000 $49,766,000 $422,023,000 $2,837,000 $424,860,000 $45,365,000 $470,225,000 $2,995,000 $473,220,000 $3,153,000 $476,373,000 $41,460,000 $517,833,000 $2,299,000 $520,132,000 $28,579,000 $548,711,000 $551,579,000 $560,375,000 $598,360,000 $601,353,000 $604,792,000 $608,613,000 20 Tacoma 21 22 Wenatchee Clark 23 25 24 27 26 29 28 31 30 33 Walla 32 Edmonds 35 Cascadia 34 36 Bellingham 40000256 Preservation Design Engineering Technology Center Bldg J Replacement $1,295,000 $609,908,000 37 Centralia 40000109 Preservation Design Teacher Education and Family Development Center $1,897,000 $611,805,000 38 Skagit 40000110 Preservation Design Library/Culinary Arts Building $2,136,000 $613,941,000 39 Highline 40000105 Preservation Design Welcome Center for Student Success $2,957,000 $616,898,000 40 Clark 40000227 Preservation Design Hanna/Foster/Hawkins Complex Replacement $2,324,000 $619,222,000 41 Peninsula 40000111 Preservation Design Advanced Technology Center $2,103,000 $621,325,000 42 South Seattle 40000231 Preservation Design Rainier Hall Renovation $3,309,000 $624,634,000 43 Seattle Central 40000294 Preservation Design Broadway Achievement Center $2,723,000 $627,357,000 2019 21 SBCTC Capital Request for Financing Authorities Authority College Columbia Basin Number Class 40000301 Program Phase Authorize Project Student Recreation $27,000,000 Grays Harbor 30000127 Preservation Authorize Student Services and Instructional Building $3,200,000 Pierce Puyallup 40000302 Program Authorize Parking Expansion $2,831,000 $6,500,000 Walla Walla Walla Wenatchee Program Authorize Program 30000985 Preservation 40000003 $1,500,000 $4,500,000 Yakima 40000303 40000304 $22,700,000 23 HOT TOPICS Requesting about twice the state bonds we have recently been receiving College end runs to the process and request Staff paid from the state capital budget Our aging infrastructure Space utilization New M&O funding 24 23-24
CAPITAL REQUESTS AND FUNDING $700 M $600 M $500 M $400 M $300 M $200 M $100 M $ M Requested Received 25 STATE BOND CAPACITY $4 B $3 B $2 B $1 B $ B 26 25-26
100% $4 B 90% 80% $3 B 70% 60% $2 50% B 40% 30% $1 B 20% 10% $ 0% B PORTION OF STATE BONDS Higher Ed / State SBCTC / State 27 END RUNS While individual districts may be able to get something added to the budget when they are represented by a legislator in a leadership position, the system believes it gets better results over the long run by working together WACTC has had a policy against districts going around the process for capital funding since 2006 The policy was last update in 2014 to exclude funding provided for leased properties 28 27-28
STAFF PAID WITH STATE CAPITAL FUNDING Most of the capital budget is from bonds financed over 25 years We only want to finance things that will be around while we are still paying for them OFM provides guidance on what equipment and staff can be paid for from the state capital budget JLARC is reviewing all 2015-17 staff expenditures from capital appropriations for compliance 29 AGING INFRASTRUCTURE Building Square Footage by Age 30 29-30
UTILIZATION 31 NEW M&O FUNDING The legislature has not provide increases specifically for M&O of existing facilities New M&O is funded for the state supported portion of major projects ($7.24/GSF for 2017-19) The M&O increase goes into safe harbor for 4 years and then becomes part of the funding distributed using the operating budget allocation model 32 31-32
NEXT STEPS FOR 2019-21 BUDGET Friday, September 14, 2018 Monday, December 10, 2018 Monday, January 14, 2019 Friday, March 01, 2019 Wednesday, March 13, 2019 Sunday, April 28, 2019 Capital budget request due to OFM Governor's budget proposals expected First day of 2019 session Fiscal committee cut off Last day to hear bills in house of origin First 2019 session ends Except where otherwise noted, this work is licensed under CC BY 4.0. 32 33