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Capital funding drivers and issues for BAR

WHY WE DO WHAT WE DO FOR CAPITAL FUNDING

Wayne Doty, SBCTC Capital Budget DirectorOctober 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

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STATE CAPITAL VERSUS OPERATING FUNDING

Operating

• Relatively fewrestrictions on use

• Maintenance and policylevels

• Can be used to paystaff and operatebuildings

Capital

• Every dollar isappropriated for aspecific use

• One-time funding• Staff limited to

delivering approvedproject scope

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WHAT IS CAPITAL?

• A funding source for acquisition, design, constructionor improvement of real property – does not usuallyinclude master plans or feasibility studies

• Funding may be appropriated and allotted (state) ornon-appropriated and non-allotted (local)

• Funds are spent self-performing the approved scopeor through a public work process

• College self-performance is limited to work with avalue of $90,000, or $45,000 if it only involves onetrade RCW 28B.50.330

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WHAT IS PUBLIC WORK?

• A procurement method for “all work, construction,alteration, repair, or improvement other thanordinary maintenance, executed at the cost of thestate or of any municipality, or which is by law a lienor charge on any property therein.” RCW39.01.010(4)

• Community and technical colleges do not haveauthority to administer public work unless it isdelegated by DES.

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PUBLIC WORK VERSUS ORDINARY MAINTENANCE

Ordinary Maintenance

• Repairing or replacingthings that wear outwith normal use

Public Work

• Installing somethingnew

• Something that canlead to lien on theproperty

• Something that requiresa permit

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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

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Candidate for Additional Area

Candidate for Replacement

Candidate for Renovation

Minor Repairs by Severity

Space Deficit?

Facility ConditionProgrammatic Need

Yes

No

Wor

se C

ondi

tion

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FINDING THE BEST SOLUTION

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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

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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

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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

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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 facilitycondition survey

• Individual projects can’t exceed $2M in state fundingand must be completed in biennium

• State Board manages emergency and hazmat pools• Adding new infrastructure category for 2021-23

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MINOR PROGRAM• System sets funding targets• College funding is based on its’ portion of system

full-time equivalent students (FTE) and ownedsquare footage (SF)• 30% FTE + 35% SF + 35% SF >25 years old

• Colleges identify projects to reflect critical goals ofthe college and serve to improve the educationalenvironment, better access, deal with childcare, orstudent support services.

• Individual projects can’t exceed $2M in state fundingand must be completed in biennium

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MAJOR PROJECTS

• System adopts selection criteria and either a fundingtarget 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

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EVERY MAJOR PROJECT SCORED ON A 100 POINT SCALE

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Overarching CriteriaApplies to every project. Has 23 potential points.

Matching Criteria

For projects with non-state funding.

Infrastructure Criteria

For projects with non-building infrastructure.

Renovation Criteria

For projects that include renovation of existing space.

Replacement Criteria

For projects that will demolish existing space and replace it with new construction.

New Area Criteria

For projects that increase the square footage of a campus.

Category-specific criteria always totals 77 potential points.

ALTERNATIVE FINANCING• All financing for a capital purpose requires legislative

authorization and approval from the State FinanceCommittee RCW 39.94

• We use locally supported Certificates of Participation forland and facilities the state legislature does not typicallyfund

• 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

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LOCAL CAPITAL

• The State Board must “establish and administercriteria and procedures for all capital construction.”RCW 28B.50.090(9)

• We use the local capital expenditure authorityrequest 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.

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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

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Key to success: schedule all the work before the biennium starts.

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• 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

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Keys to success: keep project budget up to date and don’t let issues linger.

MAJOR PROJECT ALLOCATIONS

MONITORING

• State Board merges expenditure data from legacyand ctcLink systems into CapTrack monthly andnightly, respectively

• Examples of allocation and monitoring screens onthe next two slides

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2019-21 REQUEST

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Priority College 

NumberClass

Phase

Project

AmountCumulative

1Statewide

40000043Preservation Fund Swap

Preventive Facility Maintenance and Building System Repair $22,800,000$22,800,000

2Statewide

40000258Preservation Complete

Minor Works ‐ Preservation

$23,739,000$46,539,000

3Statewide

40000171Preservation Complete

Minor Repairs ‐ Roof

$15,252,000$61,791,000

4Statewide

40000169Preservation Complete

Minor Repairs ‐ Facility

$38,527,000 $100,318,000

5Statewide

40000173Preservation Complete

Minor Repairs ‐ Site

$3,310,000 $103,628,000

6Statewide

40000112Program

CompleteMinor Works ‐ Program

$39,841,000 $143,469,000

7Wenatchee 

30000985Preservation Construction Wells Hall Replacement

$29,531,000 $173,000,000

8Olympic

30000986Preservation Construction Shop Building Renovation

$7,652,000 $180,652,000

9Pierce Puyallup 

40000293Program

Design

STEM building 

$3,369,000 $184,021,000

10Pierce Fort Steilacoom30000987

Preservation Construction Cascade Building Renovation ‐ Phase 3

$31,592,000 $215,613,000

11Bellevue 

40000168Program

Design

Center for Transdisciplinary Learning and Innovation 

$2,839,000 $218,452,000

12South Seattle

30000988Preservation Construction Automotive Technology

$23,376,000 $241,828,000

13Lake Washington 

40000102Program

Design

Center for Design 

$3,160,000 $244,988,000

14Shoreline

30000990Preservation Construction Allied Health, Science & Manufacturing

$36,642,000 $281,630,000

15Bates 

40000130Program

Design

Fire Service Training Center 

$2,802,000 $284,432,000

16Olympic 

40000103Program

Design

Innovation & Technology Learning Center 

$2,552,000 $286,984,000

17Bates

30000989Preservation Construction Medical Mile Health Science Center

$40,828,000 $327,812,000

18Everett 

40000190Preservation Design

Baker Hall Replacement 

$2,850,000 $330,662,000

19Spokane Falls

30001458Preservation Construction Fine and Applied Arts Replacement

$35,663,000 $366,325,000

20Tacoma 

40000104Preservation Design

Center for Innovative Learning and Engagement 

$2,839,000 $369,164,000

21Wenatchee 

40000198Preservation Design

Center for Technical Education and Innovation 

$3,093,000 $372,257,000

22Clark

30000135Program

Construction North Clark County

$49,766,000 $422,023,000

23Shoreline 

40000214Preservation Design

STE(A)M Education Center 

$2,837,000 $424,860,000

24Everett

30000136Program

Construction Learning Resource Center

$45,365,000 $470,225,000

25Lower Columbia 

40000106Preservation Design

Center for Vocational and Transitional Studies 

$2,995,000 $473,220,000

26Spokane 

40000107Preservation Design

Apprenticeship Center 

$3,153,000 $476,373,000

27Grays Harbor

30000127Preservation Construction Student Services and Instructional Building

$41,460,000 $517,833,000

28Columbia Basin 

40000108Preservation Design

Performing Arts Building Replacement 

$2,299,000 $520,132,000

29North Seattle

30001451Preservation Construction Library Building Renovation

$28,579,000 $548,711,000

30Whatcom 

40000137Program

Design

Technology and Engineering Center 

$2,868,000 $551,579,000

31Walla Walla

30001452Preservation Construction Science and Technology Building Replacement

$8,796,000 $560,375,000

32Cascadia

30001453Program

Construction Center for Science and Technology

$37,985,000 $598,360,000

33Cascadia 

40000222Program

Design

CC5 Gateway building 

$2,993,000 $601,353,000

34Edmonds 

40000114Program

Design

Triton Learning Commons 

$3,439,000 $604,792,000

35Renton 

40000204Program

Design

Health Sciences Center 

$3,821,000 $608,613,000

36Bellingham 

40000256Preservation Design

Engineering Technology Center ‐ Bldg J Replacement 

$1,295,000 $609,908,000

37Centralia 

40000109Preservation Design

Teacher Education and Family Development Center 

$1,897,000 $611,805,000

38Skagit 

40000110Preservation Design

Library/Culinary Arts Building 

$2,136,000 $613,941,000

39Highline 

40000105Preservation Design

Welcome Center for Student Success 

$2,957,000 $616,898,000

40Clark 

40000227Preservation Design

Hanna/Foster/Hawkins Complex Replacement 

$2,324,000 $619,222,000

41Peninsula 

40000111Preservation Design

Advanced Technology Center 

$2,103,000 $621,325,000

42South Seattle 

40000231Preservation Design

Rainier Hall Renovation 

$3,309,000 $624,634,000

43Seattle Central 

40000294Preservation Design

Broadway Achievement Center 

$2,723,000 $627,357,000

College 

NumberClass

Phase

Project

Authority

Columbia Basin40000301

ProgramAuthorize

Student Recreation Center

$27,000,000

Grays Harbor

30000127Preservation Authorize

Student Services and Instructional Building

$3,200,000

Pierce Puyallup40000302

ProgramAuthorize

Parking Expansion

$2,831,000

Walla Walla

40000303Program

AuthorizeStudent Recreation Center

$6,500,000

Walla Walla

40000304Program

AuthorizeClarkston Student Activity Center

$1,500,000

Wenatchee

30000985Preservation Authorize

Wells Hall Conference Center

$4,500,000

Yakima

40000003Program

Re‐authorize West Campus Expansion

$22,700,000

2019‐21 SBCTC Capital Request for New Appropriations

2019‐21 SBCTC Capital Request for Financing Authorities

HOT TOPICS

• Requesting about twice the state bonds we haverecently 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

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$ M

$100 M

$200 M

$300 M

$400 M

$500 M

$600 M

$700 MRequestedReceived

CAPITAL REQUESTS AND FUNDING

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$ B

$1 B

$2 B

$3 B

$4 B

STATE BOND CAPACITY

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$ B

$1 B

$2 B

$3 B

$4 B

PORTION OF STATE BONDS

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SBCTC / State

Higher Ed / State

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

END RUNS

• While individual districts may be able to getsomething added to the budget when they arerepresented by a legislator in a leadership position,the system believes it gets better results over thelong run by working together

• WACTC has had a policy against districts goingaround the process for capital funding since 2006

• The policy was last update in 2014 to excludefunding provided for leased properties

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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

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AGING INFRASTRUCTUREBuilding Square Footage by Age

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UTILIZATION

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NEW M&O FUNDING

• The legislature has not provide increasesspecifically for M&O of existing facilities

• New M&O is funded for the state supported portionof major projects ($7.24/GSF for 2017-19)

• The M&O increase goes into “safe harbor” for 4years and then becomes part of the fundingdistributed using the operating budget allocationmodel

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Except where otherwise noted, this work is licensed under CC BY 4.0.

NEXT STEPS FOR 2019-21 BUDGET

• Friday, September 14, 2018 Capital budget request due to OFM

• Monday, December 10, 2018 Governor's budget proposals expected

• Monday, January 14, 2019 First day of 2019 session

• Friday, March 01, 2019 Fiscal committee cut off

• Wednesday, March 13, 2019 Last day to hear bills in house of origin

• Sunday, April 28, 2019 First 2019 session ends

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