Capital Budget Drivers

POPULATION GROWTH, inflation, and other forces that cause increased demand for state services and investments are called "budget drivers." These forces are at work in both the operating and capital budgets. Following is a discussion of the budget drivers for four major capital budget programs.

K-12 School Construction Grants

The primary budget driver for public school (K-12) construction grants is enrollment growth. School enrollment is projected to increase at a rate of 2.0 percent in FY 1998 and 1.8 percent in FY 1999, adding approximately 35,000 new students to the K-12 system by the end of the biennium. Although overall growth rates in K-12 enrollment are beginning to slow down after a decade of steady increases, there is still mounting pressure at the higher grade levels that requires increasing investments in K-12 facilities.

These pressures are outpacing the availability of timber trust revenues, which historically have been the main source of funding for state support of local school construction. In recent years, timber revenues have not kept pace with the demand for new school construction funds.

A second capital budget driver in K-12 education is the need to renovate, upgrade and replace aging facilities that require modernization. About half of the existing square footage of school space is at least 20 years old. These facilities require constant attention to provide continuing service, protect the safety of students, and allow for changes in technology. This objective is difficult and costly to accomplish in older buildings. The increasing use of computers is a prime example of how buildings require modernization to provide students with the opportunities they deserve.

Higher Education

The state's increasing population, particularly in the 17-to-29 year old age group, is the primary budget driver for the higher education capital budget in the next 10 to 15 years. The 1996 Master Plan for higher education, developed by the Washington State Higher Education Coordinating Board and endorsed by the 1996 Legislature, calls for serving an additional 84,000 full time students in post-secondary programs by the year 2010. This enrollment boom is the result of a combination of the "baby-boom echo," rapid growth in the number of individuals and families moving to Washington State, and an increasing number of current residents seeking workforce training.

Creating the capital facilities to provide for increased enrollments has been termed the "access" challenge, but institutions also face an additional challenge to ensure quality in the learning environment. The state must maintain its level of instructional quality during a time of growing competition from other states and new technological developments. Improved technology, with its attendant construction costs, is a major element in maintaining quality instruction in today's fast-changing world of education.

Since 1988, there has been a major effort to expand access to higher education by developing branch campuses throughout the state. New campuses are being designed, built, or expanded at Vancouver, Bothell, Tacoma, the Tri-Cities, and Spokane. These are major investments with multiple phases of construction. The state is committed to proceeding with these investments as rapidly as possible within the parameters of available funding. However, the cost of these facilities is also driving interest in defining and pursuing other non-traditional means of serving students - primarily through the use of technology and distance learning.

Included in the 1997 supplemental and 1997-99 capital budget are projects that continue the commitment to expanding access through branch campus construction, main campus development, and investments in technology that support distance learning. Key projects specifically designed to serve additional students include:

• Completion of the first phase of construction at the Tacoma branch campus to serve 985 full-time equivalent (FTE) students.

• Construction of the first phase of the Bothell branch campus, which collocates the existing branch of the UW and the new Cascadia Community College. Current UW programs in leased space in Bothell will be moved to the new site, and an additional 515 FTE student capacity will be added. The new Cascadia Community College will have space for 800 FTE students.

• Construction of a Health Sciences Building at the Joint Center for Higher Education in Spokane to consolidate programs offered by Washington State and Eastern Washington Universities and add 253 FTE students.

• Construction of a new Law School at the University of Washington will add 250 new FTE students.

• Construction of an addition to Kimbrough Hall will add 165 FTE students to the Washington State University Pullman campus.

• Construction funds at the community colleges will add capacity for 1,950 FTE students at the following locations: North Seattle (350 FTEs), Everett (350 FTEs), South Seattle (250 FTEs), Olympic College in Poulsbo (400 FTEs), and Bellevue (600 FTEs).

• Design funds are provided for the Teaching and Learning Center at Washington State University that will add 1,930 FTE students when constructed in a future biennium.

• Construction of the Engineering Building at the Vancouver branch campus will serve 260 FTE students when completed.
  

Human Services

Department of Corrections

The state's prison population has doubled over the past eight years, increasing from 6,053 inmates in 1988 to the present population of 12,127. This number is expected to grow to 12,948 by the end of FY 1997, and to 13,943 by the end of FY 1999 - almost 15 percent from the current level. Current sentencing laws, population growth, and demographic changes combine to add approximately 500 inmates each year to the system. For the capital budget, this translates into the construction of a new 1,000-bed facility every biennium for the foreseeable future.

The average cost of a new adult male medium security prison bed at a new institution is approximately $100,000. This includes the cost of purchasing land; bringing in utilities and other infrastructure and support services; and building housing, dining, recreation, education, administration, support and industries space. Phasing the construction of a facility increases the average cost per bed, and increases the total cost of the completed institution. However, phasing over more than one biennium is often necessary to accommodate the large cost of these new institutions.

The first phase of a new facility is significantly more expensive than following phases. The land, site improvements and infrastructure generally must all be completed in the first phase. Buildings to house the core services (dining, education, administration) must all be completed to support the first component of housing. For this reason, the cost per bed of a phased facility is much higher in the first phase, and then lower in subsequent phases, requiring a longer-term view of each institutional investment. A value engineering analysis was conducted for the new institutions in the Governor's Ten-Year Plan so that the most efficient layout and level of security could be provided with the lowest possible operating cost.

The Governor's 1997-99 capital budget includes the following population-driven projects:

• Construction of the 1,936-bed Stafford Creek Correction Center at a cost of $155.6 million. The total cost for these beds will be $173 million including appropriations already available for this project.

• Design is initiated for a 216-bed expansion of the Special Offenders Unit at Monroe at a cost of $3.5 million. Construction of these beds in the 1999-01 Biennium is expected to cost $35.9 million.

• Site selection and preliminary planning for a new 1,000 bed women's' facility at a cost of $1.7 million. This facility is expected to require an additional $105 million to construct.

• Site selection and predesign for the next new 1,936-bed prison for men at a cost of $1.2 million. This facility will require an additional $212 million to complete.
  

Juvenile Rehabilitation Administration

In early December of 1996, there were 1,369 youths in 13 state owned institutions and various community based facilities administered by the Juvenile Rehabilitation Administration (JRA) in DSHS. This number is expected to increase to 1,474 by the end of FY 1997, and to 1,518 by the end of FY 1999 - almost 11 percent from the current level. While the rate of juvenile violence declined in 1995, arrests and convictions continue to drive the demand for new beds. JRA is developing new medium- and maximum-security prototypical housing units that offer maximum program flexibility, and control staffing and other operating costs.

A second budget driver is the age and condition of JRA facilities. A recent study of all JRA facilities indicates approximately one-third of the facilities are in need of replacement or major renovation. This budget calls for replacing 64 outdated and inefficient beds at Maple Lane School.

The average cost of providing new JRA beds exceeds the cost of providing beds in adult correctional facilities. A JRA facility includes virtually all the elements of an adult correctional facility, plus an additional investment in education, program, and support space. The JRA system must deliver programs to a wide variety of age groups. In addition, the economies of scale possible in a large adult correctional center cannot be achieved since JRA institutions are smaller in size and the housing units have fewer beds in each building. The new 300-bed juvenile facility is estimated to cost approximately $185,000 per bed, as compared to $100,000 in an adult facility.

The 1997-99 Biennium capital budget includes the following projects related to population and replacement needs.

• Completion of the residential redevelopment of Green Hill School by adding three residential units housing 192 offenders and utility and other site improvements at a cost of $12.6 million.

• Construction of 128 new beds and support space at Maple Lane School at a cost of $9.3 million. These beds will replace 64 beds in seven outdated cottages that have exceeded their useful life, and will add maximum security beds to the institution. Recent highest and best use studies by the Joint Legislative Audit and Review Committee on JRA institutions demonstrate clear program and economic benefits associated with the new prototypical housing units compared to continued use of small and substandard cottages.

• Site acquisition and predesign is included for a new 300-bed institution at a cost of $2 million. The first phase of construction is planned for the 1999-01 Biennium, with the second phase of beds following in the next biennium. The total cost of the 300 beds is expected to be $55.9 million.