200911 Capital Budget Development Training

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2009-11 Capital Budget Development Training

• Prepared by Tom Henderson

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2007-09 Capital Budget4.3 Billion
CTCs 12.1

• /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
• CTCs 518.4
• Statewide Total 4,296.6

K-12
23.3
Transportation
.01
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SBCTC 2007-09 Capital BudgetTypes of Projects
Replacements 21.5
Renovations 13.1
Locally Funded 4.6
Minor Repairs 2.9
MO/Infrastructure 5.3
Growth Projects 42.1
Matching/Minor Imp 5.0
Repairs 5.5
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SBCTC Capital History
in millions
518
471
426
289
229
171
106
116
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Target Assumptions ( in millions)
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SBCTC Percent of Higher Education G.O. Bonds
50.0
57.4
54.8
40.9
44.5
39.6
33.9
22.0
Includes Gardner Evans Bonds
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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

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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

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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

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Master Plan

• Build better choices through strategic planning
• Short term 2-6 years
• Mid-term 7-12 years
• Long range 13-20 years
• Recommended attachments to the master plan
• 10 year plan
• Facility Condition Survey (maintenance)
• CAM Model (integrates FTES, FAE and budget
  actions committed changes)

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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

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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

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Schedule

• Major milestones
• Critical deadlines
• December 5, 2007 PRRs due
• April 11, 2008 Budget requests due
• July 2, 2008 Predesigns due
• Critical review and decision activities
• OFM and legislative process

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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)

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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?

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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
• Dont copy the detailed appendices on predesigns
  sent to State Board for distribution to OFM and
  the Legislature

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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

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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

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Building the 2009-11 Request

• Repair and Minor Improvements
• Matching Funds
• Renovation
• Replacement
• Growth
• Alternative Financing

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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)

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Repair and Minor Improvements (contd)

• Dont 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 (ESCOs and
  Treasurer Lease Purchase Funding)
• Infrastructure repairs greater than 1M are
  requested separately, less than 1M are included
  with site repairs.

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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

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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

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Renovation (contd)

• 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?

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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

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Replacement (contd)

• Space doesnt 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

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Replacement (contd)

• 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

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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

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Growth (contd)

• 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

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Alternative Financing

• Legislature is looking for C-2s, C-100s, 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 (COPs)
• Work with State Treasurer to identify timing of
  bond sales and prepare supporting data

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Alternative Financing (contd)

• Smaller COPs 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

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Alternative Financing (contd)

• Colleges need to self-fund predesign and design
  cost on COPs
• 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

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Submitting the Budget

• Narrative format from last biennium on the SBCTC
  website
• http//www.sbctc.edu/college/_f-capbgtmessage.asp
  x
• 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

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Submitting the Budget (contd)

• C-100s must match the predesign C-100s
• 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.

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Questions?