for BAR January 25, 2018

CAPITAL OVERVIEW AND ALLOCATIONS

Cheryl Bivens(360) 704-4386cbivens@sbctc.edu

OWNED AND LEASED SQUARE FOOTAGE

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Squa

re F

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1,143,706 Leased

20,529,467 Owned

21,673,173 Total

COMMUNITY AND TECHNICAL COLLEGES• Our community and technical colleges own or lease more

than 21 million square feet • This is 18.6% of the entire state facility inventory • University of Washington is the only other agency with more

square footage in their inventory

CAPITAL PRINCIPLES• We are required to prioritize our requests for new appropriations.• Funding for maintenance and operation of existing facilities is our

top priority. • Next comes funding for emergencies, minor repairs, and minor

program improvement projects to take care of existing facilities.• Major projects are added to a pipeline of projects, in rank order

from the most recent selection, below the projects already in the pipeline.

• Requests are structured so that major projects are constructed in pipeline order. This includes requesting design-phase funding the biennium before construction is anticipated.

• Projects stay in the pipeline until funded for construction.4

WHAT IS A CAPITAL PROJECT?

• Acquisition of real property

• Additions, repairs, renovations or improvements to existing facilities (other than ordinary maintenance)

• Predesign, design, and construction of new facilities

• Acquisition of certain building equipment (typically where installation requires a permit)

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WHAT IS NOT A CAPITAL PROJECT?

• Routine maintenance

• Master plans, feasibility and other studies

• Painting, carpeting, etc.

• Movable equipment, glass, custodial equipment, etc.

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2018 CAPITAL BUDGET REQUEST

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Priority College Number Phase Project Request1 Statewide 30001291 Preventive Facility Maintenance and Building System $22,800,0002 Statewide 30001369 Minor Works - Preservation $21,309,0003 Statewide 30001293 Minor Repairs - Roof $5,307,0004 Statewide 30001294 Minor Repairs - Facility $16,587,0005 Statewide 30001295 Minor Repairs - Site $4,166,0006 Statewide 30001368 Minor Works - Program $16,389,0007 Edmonds 30000137 Construct Science Engineering Technology Bldg $39,257,0008 Wenatchee 30000985 Design Wells Hall Replacement $2,840,0009 Whatcom 30000138 Construct Learning Commons $34,952,000

10 Olympic 30000986 Design Shop Building Renovation $953,00011 Pierce Fort 30000987 Design Cascade Building Renovation - Phase 3 $3,508,00012 Big Bend 30000981 Construct Professional-Technical Education Center $35,346,00013 South Seattle 30000988 Design Automotive Technology $2,501,00014 Spokane 30000982 Construct Main Building South Wing Renovation $25,683,00015 Highline 30000983 Construct Health and Life Sciences $24,221,00016 Bates 30000989 Design Medical Mile Health Science Center $3,238,00017 Clover Park 30000984 Construct Center for Advanced Manufacturing Technologies $35,821,00018 Shoreline 30000990 Design Allied Health, Science & Manufacturing $3,592,00019 Spokane Falls 30001458 Design Fine and Applied Arts Replacement $2,827,00020 Clark 30000135 Design North Clark County $5,688,00021 Everett 30000136 Design Learning Resource Center $4,015,00022 Grays Harbor 30000127 Design Student Services and Instructional Building $4,151,00023 North Seattle 30001451 Design Library Building Renovation $3,448,00024 Walla Walla 30001452 Design Science & Technology Building Replacement $1,156,00025 Cascadia 30001453 Design Center for Science and Technology $3,421,000

Total: $323,176,000

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DEVELOPMENT OF 2019-21 CAPITAL BUDGET REQUEST

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Adoption of 2019-21 major project scoring criteria College budget development workshops in March 2017 Facility condition survey March thru November 2017 Collaboration through June 2017

Utilization & Enrollment

College proposalsMajors due December 2017Scored February 2018Minors due March 2018

State Board adoption in May/June 2018 Submit to OFM in September 2018

MAINTENANCE & OPERATINGFUNDING IN CAPITAL• It started with a fund swap during the 2003-05 biennium to offset a

corresponding reduction in the operating budget.• When the community and technical college Building Fee account was

created the allowable uses were listed in RCW28B.50.360. Routine facility maintenance and utility costs were not among the allowable uses.

• Since 2003, the legislature has included an exception to the allowable uses in the capital budget so the fund could be used for routine facility maintenance and utility costs.

• We have tried and continue to try and get this funding moved back to the operating budget.

• This funding is part of the operating allocation.

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MINOR CAPITAL PROJECTS

• Greater than $25,000 and less than $2,000,000• Roof• Facilities• Site • Program• Preservation (includes Emergency and Hazardous Materials)

These projects are identified and prioritized by each college based on the results of their Facilities Condition Survey. Funds can be transferred between like projects (roof to roof, etc.) with prior approval if campus needs change after the biennium starts.

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MINOR WORK – PRESERVATION (UNANTICIPATED REPAIRS)

(Formerly known as RMI)Funds allocated to each college for an emergency reserve. These funds may be used for unanticipated repairs.The amount allocated to each college is based on the college’s share of the system’s total FTE, building area, and building area more than 25 years old.

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EMERGENCY POOL• $2 Million available for emergency events – first come first serve until fund is

exhausted

• Used when emergency event is declared by the college president and DES is notified

• Submit emergency assistance request form to SBCTC

• Shared cost of project between college and SBCTC• Deductible = 5% of initial URF allocation

• Not to exceed $500,000

By College By SBCTC

For the first project 50% of cost up to 1/3 of URF dollars Remaining costs

For the second project 50% of cost up to /3 of URF dollars for projects #1 and #2 combined

Remaining costs

For the third and all subsequent projects

50% of cost up to 3/8 of URF dollars for all projects

Remaining costs

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HAZARDOUS MATERIALS MITIGATION POOL• $2 Million available for hazardous materials abatement – first come first

serve until fund is exhausted• No deductible – no campus match• Not to exceed $500,000• Will be asked to provide test results and analysis of abatement solutions

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LOCAL FUNDS FOR CAPITAL PROJECTS• Some capital projects are not eligible for state funds

• Enterprise activities (student housing, food services, book store, etc.)• Parking lots• Repairs to buildings acquired with local funds within the last 7 years

• Local funds can be used to augment state-funded projects• Projects can exceed original estimated cost due to scope creep or

increased construction costs.• Request to use local funds for capital projects is required

• Fill out “Local Capital Expenditure Request Authority” form and send to State Board

• Projects less than $1 million can be approved by Executive Director• Projects a million or more go the State Board at their regularly

scheduled meetings• Capital projects using local funds can be less than $25,000

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MAJOR PROJECTS• Major capital projects are renovations and replacement projects over $5

million• Major projects typically span multiple biennium and have phased

appropriations regardless of the project delivery type• Design / Bid / Build• Design – Build• General Contractor / Construction Manager

• Typical timing• The first biennium will appropriate funding for Predesign and Design• The second biennium will appropriate funding for Construction, Art,

and Equipment purchases• Acquisitions can be in either the design-phase or construction-phase

funding depending on need15

MAJOR PROJECT ALLOTMENTS

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MAJOR PROJECT ALLOCATIONS

• Things to keep in mind:• Expenditures cannot be made prior to OFM allotment

• Design funds available after Predesign is approved

• Recast budget needed after work is bid and when something has changed

• Artwork set aside allocated to SBCTC not college

• Equipment list required before making any purchases

Submit list of equipment to SBCTC Capital Budget (Cheryl)

The list will be evaluated and non-allowable equipment removed before submission to OFM

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TRACKING CAPITAL EXPENDITURES

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Legacy colleges refreshed monthly after FMS closesctcLink colleges refreshed nightly

FMS CODING ERRORS

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Watch for blank fields:Appropriation, Project, Description, Appropriation/ReappropriationThis means either expenditures have been posted to invalid appropriations or the FMS data table mapping is incomplete

Review the following FMS screens:GA1042, GA1062, GA1092

NOTES: Any correcting entries need to be reversed exactly as the offending entry was made. Let the month close to zero out that entry (your cash will be out of balance)Correct FMS tables and make the correcting entry in the new fiscal month

ESTIMATED ACCRUALS ATYEAR-END / BIENNIUM END

• Any work completed or materials received but not yet invoiced need to be accrued at year-end.

• Minor work projects are not re-appropriated. If you miss expenditures for a minor work project from the previous biennium, you will have to use local funds to pay the invoice.

• Enter an estimated accrual if you don’t know the actual cost.

• See FAM manual for trans codes and GLs that will be affected

• When the accrual is reversed in the new fiscal year or biennium, expenditures will not be affected. The only GLs impacted will be Cash and Accounts Payable

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BIENNIUM CLOSE ACCRUALS - ENTRIES

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FISCAL YEAR CLOSE ACCRUALS - ENTRIES

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Please consult with SBCTC Accounting staff for additional guidance

RE-APPROPRIATIONS• Major projects are the only state-funded capital projects eligible for re-

appropriation. • You may see “carry over” funds from the Design portion of your project as

well as a new expenditure authority code for the construction phase of the major project.

• College leadership will be reminded frequently to finish Minor Works projects within the biennium!

• Emergency and Hazardous materials• Emergency or Hazardous materials funds don’t carry over from the previous

biennium. However, we can allocate funds from the new expenditure authority for the unspent balance.

• Local capital projects• Local capital projects can span any period of time. The ending balance from

the previous fiscal year is used as the opening balance for the new biennium.Notify the State Board when local projects are complete. We will adjust

the final allocation to match the total expenditures in order to clear out any unspent balances. 24

MAJOR PROJECT STATUS REPORTS

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CHANGING MINOR WORKS PROJECTS• Minor Works projects are identified and prioritized years before they are funded

• It’s understood priorities can change when plans change or unexpected events occur

• The college can request to re-purpose minor works funds from one project to another within the same funding category (roof for roof, facility for facility, etc.)

• Use the Minor Works Change Tool found on the SBCTC Capital website page

• If you’re moving funds among existing projects, we can make the change immediately

• If you’re funding a new project, it must be approved by OFM in the next quarterly request

• Watch your expenditures of current projects and be sure you’re not transferring more funds than you have available

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DIRECTLINE ENTRIES FOR CAPITAL ASSETS

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• DirectLine is recognized as the primary source for Facilities related data• DirectLine is a preferred source for college depreciation records• When a capital project is completed and depreciation is to start, the

investment records need to be changed from Commodity Code 0200.• Use GAAP and SAAM guidelines to distribute the expenditures to the

correct categories:• Value of land - Commodity Code A100• Buildings - Commodity Code 05xx• Value of improvements other than buildings (sidewalks, etc.) – Commodity Code 06xx

or 04xx• Equipment that would have different useful life than the building (building system

equipment is part of the building and does not need to be broken out) – Commodity Code varies

Note: All material licensed under Creative Commons Attribution 4.0 International License.

Questions?

Cheryl Bivens360-704-4386

cbivens@sbctc.edu

SBCTC Capital Website