1. 2009-11 Capital Budget Development Training Prepared by Tom Henderson

2. 2 2007-09 Capital Budget 4.3 Billion $/millions Govt. Operations $997.4 Human Services 301.6 Natural Resources 1,036.2 Transportation 5.4 K-12 1,000.1 Universities 547.5 CTC’s 518.4 Statewide Total $4,296.6 K-12 23.3% Human Services 7.0% Natural Resources 24.1% Transportation.01% Universities 12.7% Govt. Operations 20.7% CTC’s 12.1%

3. 3 Growth Projects 42.1% Replacements 21.5% Renovations 13.1% Locally Funded 4.6% Minor Repairs 2.9% Repairs 5.5% SBCTC 2007-09 Capital Budget Types of Projects M&O/Infrastructure 5.3% Matching/Minor Imp 5.0%

4. 4 SBCTC Capital History $106$116 $171 $229 $289 $426 $471 $518 $$ in millions

5. 5 Target Assumptions ($ in millions) FundStateHigher Ed SBCTC GO Bonds057 $2,100 $900 $485 CTC Account060 55 Ed Const Acct253 200 80 30 $2,355 $1,035 $570

6. 6 SBCTC Percent of Higher Education G.O. Bonds *Includes Gardner Evans Bonds 33.9% 40.9% 50.0%* 39.6% 22.0% 44.5% 57.4%* 54.8%

7. 7 Capital Policy Construct quality buildings Yakima Valley – Science and Instructional Building Highline – Higher Education Center Everett – Science and Art Building Flexibility to respond to changing program requirements Keep facilities from deteriorating and eliminate temporary structures on main campuses Focus on renovating and replacing the worst buildings first

8. 8 Capital Outlook Budget level between $550M and $600M Evans-Gardner bonds not available in 2009-11 Greater focus on preservation and backlog reduction by Legislature 2-year college priority system is well respected 4-year universities still implementing a statewide priority system Design to State requirement for LEED Silver buildings

9. 9 Capital Process Plan, plan, plan Survey repair needs and facility condition Select and prioritize new growth, renovation, replacement and matching fund projects Build a budget request that is reasonable and defensible

10. 10 Master Plan Build better choices through strategic planning Short term2-6 years Mid-term7-12 years Long range13-20 years Recommended attachments to the master plan 10 year plan Facility Condition Survey (maintenance) CAM Model (integrates FTES, FAE and budget actions – committed changes)

11. 11 Capital Impact New facilities are transformational Changing dynamics of student use Decisions may need to be reconsidered Changing demands and space utilization (expansion of online and hybrid courses) It may not be prudent to accelerate the capital facilities plan

12. 12 Evaluation of Campus Dynamics Individual program issues Coordination of programs Student Services delivery and consolidation Changes in the center of activity Circulation – pedestrian and vehicle Adequacy of space for education

13. 13 Schedule Major milestones Critical deadlines December 5, 2007 – PRR’s due April 11, 2008 – Budget requests due July 2, 2008 – Predesigns due Critical review and decision activities OFM and legislative process

14. 14 Changes in the Capital Budget Matching funds raised to $2 million per project Incorporated improvements to the selection and ranking process 70,000 GSF maximum and 25,000 GSF minimum (exceptions approved by WACTC Capital Committee)

15. 15 Selling the Capital Budget What is the problem being solved? What are the benefits to students and the college? What is driving the need for capital investment? Preservation Program Will the project increase capacity? How many FTE?

16. 16 Predesign Follow the OFM outline structure Make sure you have spelled out the programmatic needs and benefits of the project Simplify sections that are not useful No site selection for renovation projects Analyze whether it is better to renovate or replace Clearly identify reasons for replacement Don’t copy the detailed appendices on predesigns sent to State Board for distribution to OFM and the Legislature

17. 17 C-100 OFM C-100 – use links to ensure you are using the latest documents (enable macros) Use consultants to help define scope, cost and schedule information on projects greater than $1 million (pay attention to Extra and Other Design Services) Make sure the estimate is complete – remember equipment, permits, bonds, etc. Review similar projects and check with colleges to help avoid omitting key elements

18. 18 Project Request Reports Build the case for funding a project Establishes need, scope and costs Document will be read by selection committee, OFM, HECB and legislative fiscal committees Primary decision tool for selecting and ranking new growth, renovation, replacement and matching fund projects

19. 19 Building the 2009-11 Request Repair and Minor Improvements Matching Funds Renovation Replacement Growth Alternative Financing

20. 20 Repair and Minor Improvements Make permanent alterations to buildings that will be retained Work to improve the useful remaining life of facilities Coordinate repair decisions with the facility master plan Use ERF funds now to solve critical problems identified in the 2007 Facility Condition Survey (score over 60)

21. 21 Repair and Minor Improvements (cont’d) Don’t make temporary component repairs on failed systems Do a complete job – coordinate the work (e.g. roofing and HVAC) Use GA Energy office to assist with major mechanical and lighting projects (ESCO’s and Treasurer Lease Purchase Funding) Infrastructure repairs greater than $1M are requested separately, less than $1M are included with site repairs.

22. 22 Matching Funds Up to $2 million in state match Project should be able to start construction before the end of the biennium Matching funds must be cash from non- state sources Additional funds can be from college reserves

23. 23 Renovation Have you owned the problem more than 20 years (as of 12/07)? Are you sure the building is worth renovating? Invest in investigation. Professional assistance and estimating is essential to a successful project Renovation is costly - even with a higher contingency we often experience problems with cost and scale back projects

24. 24 Renovation (cont’d) It is difficult to approach the Legislature twice on the same building. If unsure ask for design funding in 09-11 and construction funding in 11-13. If it will cost more than 80% of the replacement value to renovate, it is generally better to replace the facility. Can you maintain programs and renovate the proposed space? Do you have surge space?

25. 25 Replacement Resolve problems of small space, inflexible, cheaply built facilities – inadequate power, data and communication, low ceilings, structural and energy problems, bad educational environments Aggregate small buildings and portables into larger structures with internal circulation Minimum footprint 20,000 sf, look for economies of scale, 3 story, 65,000 sf buildings

26. 26 Replacement (cont’d) Space doesn’t need to be replaced in-kind Right size spaces Use factor to provide internal circulation Coordinate replacement space with needs identified in the master plan Replacement and renovation allows for a 30% increase in area to improve program delivery and to add needed office space and support space

27. 27 Replacement (cont’d) Locations need to be consistent with the master plan Build lasting, quality facilities that meet the program needs today but are flexible enough to be modified in the future. No, you cannot import failing portables to get a new building Project requests must be independent

28. 28 Growth Need to show the FTE levels that will be served by the new facility Must have a strong pattern of enrollment growth Generally have a significant shortage of instructional and instructional related space

29. 29 Growth (cont’d) The strategic and facilities master plan needs to identify the type and character of programs served by the proposed facility Must clearly establish the programmatic drivers for building a new facility Recognize the competitive nature of this category – only 2 to 3 projects may be selected to move forward

30. 30 Alternative Financing Legislature is looking for C-2’s, C-100’s, and predesigns to support COP projects in the same way direct appropriations are requested Be able to start construction within the biennium Must have bids in hand to sell Certificates of Participation (COP’s) Work with State Treasurer to identify timing of bond sales and prepare supporting data

31. 31 Alternative Financing (cont’d) Smaller COP’s are only affordable if coordinated with other two-year college bonds. Asking for less than $1M may be a waste of time Timing of bond sales is not always consistent with college needs File an intent to use COP funds Use of local funds to bridge COP revenue

32. 32 Alternative Financing (cont’d) Colleges need to self-fund predesign and design cost on COP’s Legislature and OFM are looking for more process in decision making from our Boards on satellite facilities Acquisition of buildings needs to include dollars to renovate and remodel the structure at the time of purchase

33. 33 Submitting the Budget Narrative format from last biennium on the SBCTC website http://www.sbctc.edu/college/_f-capbgtmessage.aspx One copy in a 3 ring binder and a CD Use the checklist to order the submittal and ensure all documents are transmitted An additional copy of the PRR is not needed in the April 2008 submittal

34. 34 Submitting the Budget (cont’d) C-100’s must match the predesign C-100’s WACTC has a financial penalty for late submittal (loss of $25,000 in RMI funds). Penalty may extend to end runs. If you have significant changes in projects, we need to know about them before April 11 (i.e. mitigation costs, potential overruns, etc.) Project costs must be reasonable and reflect the current market conditions.

35. Questions?