This chapter contains policies related to capital budgeting, capital expenditures and projects, and real estate transactions for the state’s community and technical college system. Links are provided in the respective policy statements to RCWs, WACs, and procedures and guidelines that are relative to that particular policy.

As used in this chapter the terms:

1. “Board,” “State Board,” or “SBCTC” shall mean the State Board for Community and Technical Colleges.
2. “College district” or “local board” shall mean the local community and technical college Board of Trustees.
3. “System” shall mean all the community and technical colleges and the State Board collectively.
4. “OFM” shall mean the Office of Financial Management.
5. “DES” shall mean the Department of Enterprise Services.
6. “Local funds” are any non-appropriated and non-allotted funds.
7. “URF” shall mean state funding provided for unanticipated repairs.
8. “CAM” shall mean the Capital Analysis Model.
9. “Category 3N” shall mean an on-line course that uses web-based tools and where 100% of the instruction and interaction between instructor and student is done online. (See StuClss field definition for DIEST_ED in the Data Dictionary).
10. “FTE” shall mean full-time equivalent students as defined in the Data Dictionary.
11. “State Director” shall mean the State Board staff responsible for managing the capital budget office.

State statute authorizes the State Board, to approve:

1. Any expenditure of designated capital funds (from either local funds or a legislative appropriation)
2. Any expenditure of other local funds for a capital purpose (i.e., to acquire, construct or improve real property)
3. Each capital improvement project as an action affecting educational facilities. Projects include  purchases of real property, new construction, replacements, renovations, remodels, major repairs, land acquisitions and site improvements

6.20.10 SBCTC capital budget office

The Capital Budget office supports Washington state community and technical colleges by:

1. Working with system stakeholders to prepare a single capital budget request — representing the needs and priorities of the entire community and technical college system — to present to the governor and Legislature 
2. Allocating capital funds received from the state to the community and technical colleges. 
3. Authorizing local capital expenditures
4. Monitoring expenditures relative to authorities
5. Providing technical assistance to colleges preparing facilities plans, capital project proposals, and leases
6. Authorizing acquisition and disposal of real property

SBCTC capital budget staff should be consulted on preferred methods and timing of approvals. The preferred schedule for Board action on construction expenditures is following bid opening and before award of the contract. This allows the local board to affirm the availability of sufficient funds to proceed with the project as bid, before Board action (see RCW 28B.50).

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Policy resources

• Capital Budget

Policy history

Action	Description	Revision Date
Passage of ESB 5457	Naming of subcontractors within 48 hours of bid opening	6/11/2020
SBCTC Resolution 02-09-16	Board approved Policy Manual	09/19/2002

The State Board has powers and duties in the community and technical college act of 1991 to prepare a single prioritized capital budget request for the system (see RCW 28B.50.090(1)).

6.30.10 Biennial capital budget

The SBCTC prepares a budget request on behalf of the colleges seeking state capital appropriations. OFM currently describes the types of capital projects as preservation (repairs, replacements), program (remodels, new space), and alternatively financed projects that fall within the OFM structure used by the community and technical college system. The primary budget request in each biennium is submitted to OFM and the Legislature prior to the long session in odd-numbered calendar years. The budget request is expected to reflect the prioritized needs of the system and to be consistent with OFM instructions (See Project Types-Categories in a Biennial Capital Budget Request under “Policy resources” below).

The request:

1. Is comprised of projects that are proposed by local boards of trustees to preserve, improve or expand educational facilities.
2. Contains a long-range (ten-year) capital program and includes requests for legislative authorization to acquire real property through alternative financing.

Legislative appropriations are made to the SBCTC for the projects at each college, and the SBCTC allocates the appropriated funds to the districts for the purposes identified by the Legislature (see Timetable under “Policy resources” below).

6.30.20 Supplemental capital budget

In the even-numbered year of a biennium, a supplemental capital budget may be proposed by the Governor and considered by the Legislature amending the biennial budget. OFM typically limits the funding requests in the supplemental budget to emergency situations or planned appropriation for the next phase of a project in process (see Process and Schedule under “Policy resources” below).

6.30.30 Managing capital projects within appropriations

It is the intent of the State Board that colleges will manage capital projects within the level of their state appropriation and approved local funds:

1. For any instance where circumstances in a project resulting from claims or disruptions that may require an increase in the appropriation must be brought before the State Board.
2. Prior to execution, the State Board is required to approve any agreement that would generate a supplemental budget request to the Legislature.

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Policy resources

• Project Types-Categories in a Biennial Capital Budget Request
• Process and Schedule Timetable

Appropriated capital funds are provided by the Legislature from General Obligation bond monies (Education Construction Account and Community and Technical College Construction Account) and are included in the biennial state capital appropriations act or other acts affecting capital appropriation.

Non-appropriated funds are local funds. These funds may be used for capital purposes and are derived from fee revenue, gifts, contracts, interest earnings, grants, etc. Such local funds are not considered capital funds until they are transferred into a local fund by action of the local board of trustees or until they are proposed for use in a particular project (see Appropriated-Non-appropriated Funds under “Policy resources” below).

6.40.10 Appropriated capital funds

The Legislature provides appropriations of state capital funds to the SBCTC for the community and technical college system. The legislative appropriations act specifies the intended purpose of each appropriation.

1. Following the Governor's signing of a legislative appropriations act, approvals for an individual college to spend from an appropriation are granted by the SBCTC (see Process and Schedule).
2. Appropriations of capital funds take effect on the effective day of the appropriations act. For the biennial capital budget, the effective day is normally July 1 of the odd-number year – the first day of the biennium.
3. Appropriations of capital funds lapse (expire) on the last day of the biennium (or earlier if written in the appropriations act).
4. Re-appropriation by the Legislature of previously authorized funds (and projects) is required before any portion of a biennium-ending balance can be expended in the subsequent biennium.
5. Re-appropriations of anticipated project fund balances are included by the SBCTC in the system capital request for the subsequent biennium, not all requests for re-appropriation are accepted by the Legislature.
6. Because any biennium ending fund balance exceeding the re-appropriation level in the bill will be lost (not available in the new biennium to complete the intended project), re-appropriation requests must reflect accurate local accounting of current project expenditures.

6.40.20 Non-appropriated funds

Non-appropriated funds for a capital purpose require SBCTC approval and are based on a “recommendation to approve” from the local board of trustees. Such a "recommendation to approve" should be explicit in the deliberations of the local board of trustees or may be made by college staff under an authority clearly delegated by the local board for that project or category of capital expenditure (see SBCTC Policy Manual Section 1.30.20 for delegated authorities related to capital expenditures).

Expenditures of non-appropriated funds for a capital purpose are not subject to legislative appropriation, unless such funds are used to acquire real property. Then, acquisition may be subject to legislative approval. Upon approval, SBCTC staff will amend the college’s allocation schedule and send the revised schedule to the college’s business officer along with other appropriate forms (see Appropriated/Non-appropriated Funds under “Policy resources” in Chapter 6.30 above).

Note: Non-appropriated funds identified in the biennial capital budget request do not require additional approval by the State Board.

6.40.30 Borrowed funds

College districts may borrow funds, to be used for capital purposes, from commercial sources or through the Certification of Participation program of the State Treasurer.

1. Any loan from the state treasurer or other financing contract for real property acquisition or improvement requires explicit prior approval by the Legislature and the state finance committee (see RCW 39.94).
2. SBCTC approves the proposed alternatively financed capital expenditure as well as the local board's loan arrangements either in the capital budget process or by separate resolution.
3. Loans arranged through the State Treasurers Lease Purchase Program or Energy Conservation Program, managed by the Department of Enterprise Services, do not require legislative or State Board approval. These programs have sufficient oversight and fiscal requirements imposed by the state financial committee to ensure performance.

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Policy resources

• Appropriated/Non-appropriated Funds

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Policy history

Action	Description	Revision Date
Passage of HB 1023	Capital construction predesign and thresholds changes	07/25/2021

The State Board holds title to the state-owned real property of the community and technical colleges. College districts may acquire or alter property for the purpose of carrying out any approved program or activity provided prior approval of the State Board based on the recommendations of State Board staff and the board of trustees of the benefiting college has been granted. Properties shall be acquired in the name of the State Board for Community and Technical Colleges through the Department of Enterprise Services as required by statute (see RCW 43.82; Real Property Acquisitions under “Policy resources” below).

Prior approval of the State Board or State Director is also required before any college enters into an option to purchase, a right of first refusal, or a letter of intent to purchase real property.

Colleges acquiring real property are expected to cover the repair and remodeling costs of that acquisition. The State Board will not support or recommend to the Legislature a proposal to significantly repair or remodel a facility recently acquired by a college district.

6.50.10 Ground leases

The State Director is authorized to execute Certificates of Participation documents, including the ground lease, and to execute ground leases in general that are associated with previously approved capital projects contained within the Capital Budget.

For off-budget projects requiring ground leases, the State Board will review requests early in the development phase with final review and approval needed for ground leases prior to projects entering the later design and bid phase.

6.50.20 Gifts of property

Any college district and/or the State Board can receive fee title to real property as a gift (see RCW 28B.50.090 (14); RCW 28B.50.140 (8)).

1. For any gifted real property that is or will become a part of the educational or related support facilities of a college, SBCTC approval is required to complete the formal acceptance of the gift. Approval should be requested through SBCTC staff and will be based on a recommendation for acceptance from the board of trustees of the benefiting college.
2. For any gifted real property that will not be used for educational or related supporting activities, the local board of trustees may hold fee title without SBCTC approval. An example of such a gift would be the bequest of an income-producing property that is neither intended nor feasible for use in college-related activities.

6.50.30 Acquisitions of property

Neither a college district nor the SBCTC have statutory authority to directly purchase or lease real property. Leases and lease renewals must be approved by OFM before a college enters into any legal agreement. Any such acquisition is the responsibility of the Department of Enterprise Services (DES) who acts as the public works agent for SBCTC. However, the DES may delegate limited authority to a college, acting on behalf of the State Board, to negotiate, acquire, amend an existing lease, etc. only after approval of OFM (see RCW 28B.50; RCW 43.82).

For property contiguous to an existing owned college site or within the master-plan area of a primary campus, a district will inform the State Director of their interest in acquiring the property. The State Director will request information necessary to evaluate the acquisition according to relevant State Board criteria and will assure any necessary involvement of acquisition staff from the Department of General Administration. The State Director may approve letters or agreements relating to a proposed acquisition by the requesting college or bring the matter before the State Board. (see Form and Criteria for Evaluating under “Policy resources” below).

State Board approval is required for agreements relating to acquiring property that is neither contiguous to an existing owned college site or within a master plan area of an existing primary campus. The State Director will determine the facts of the situation, assure any necessary involvement of the acquisition staff of the Department of General Administration, and develop a plan with the district for subsequent review and approval by the State Board. The State Director may recommend approval or denial by the State Board based on State Board criteria. The State Board, after evaluating a proposed acquisition, may delegate to the State Director outright or conditional authority to approve subsequent documents relating to that acquisition.

Additional authorization may be required prior to the college entering into real estate transactions (see Special Requirements for Real Estate Appropriation under “Policy resources” below).

6.50.40 Disposal of property

The State Board has statutory authority to sell or otherwise dispose of state-owned real property held for the community and technical college system. All sales or exchanges of real property must be approved by the SBCTC Board, including

1. Sales of community or technical college real property upon the recommendation of a local board of trustees and consistent with the needs of the local college and the two-year college system.
2. Sales transactions by or with the advice of the Enterprise Services of Real Estate Services staff when technical concerns are significant or when the value of the property is high.
3. Proceeds of the sale or exchange of real property normally remain with the local college, and may be expended or committed to college use.
4. Easements for use of state owned college property and are normally granted upon the recommendation of the benefiting college.
5. Rental of college property for educational use of facility resources to non-college entities is within the authority of each local board of trustees, under the general oversight of the SBCTC.

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Policy resources

• Real Property Acquisition or the Joint Use of College Facilities
• Form and Criteria for Evaluating
• Special Requirements for Real Estate Appropriation Approvals
• Property Sale or Conveyance Evaluation

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Policy history

Action	Description	Revision Date
Passage of SSSHB 2382	Surplus public property for affordable housing	06/07/2018
Passage of SB 5924	Trust Land exchanges	10/19/2017
Passage of SSB 5977	Leasehold excise tax exemption	10/19/2017
Passage of 2ESHB 2376	Maintenance and Operation fund shift	07/01/2016
Passage of HB 2366 (2007)	Requires OFM approval for leases and lease renewals	08/15/2008

 

6.60 Emergency Reserve Pools

Purpose and Intent

Under legislative direction, the State Board established an Emergency Reserve Fund using a portion of the state capital appropriation designated for preservation funding. This reserve is intended to supplement other state funds allocated to each college, as well as local resources, in addressing unanticipated repairs resulting from significant facility emergencies.

Within the Emergency Reserve Fund, the State Board also established a Hazardous Materials Mitigation and Abatement Pool. This targeted pool of funds is intended to assist colleges in addressing unanticipated asbestos and other hazardous materials conditions that require mitigation or abatement to protect health, safety, or continued facility use.

Together, the emergency and hazardous materials mitigation funding pools support colleges in responding to unanticipated conditions that pose immediate risks to life safety, property, or the continuity of essential educational programs, and that cannot reasonably be deferred to the next biennial budget cycle.

These funding pools are intended to:

• Address conditions that exceed a college’s capacity to respond using available local funds, the Unanticipated Repair Fund (URF), or other planned capital resources; and
• Ensure timely and appropriate response to urgent situations while maintaining clear distinctions between emergencies, hazardous material mitigation, and planned capital needs.

The funds are subject to appropriation by the Legislature each biennium, and each pool is administered on a first-come, first-served basis until fully expended.

6.60.10 Emergency Reserve Fund

The Emergency Reserve Fund provides financial assistance for catastrophic or critical facility failures requiring immediate action to prevent:

• Loss of use of a major facility or system;
• Significant disruption to instructional or support programs; or
• Serious risk to life safety or property.

Emergency reserve funding is intended for situations where delay would result in substantial harm or increased costs and where the required work cannot reasonably be deferred to the next legislative funding opportunity.

Each college is expected to address relatively small repairs using its own resources, regardless of urgency. A portion of state funds for unanticipated repairs (URF) should be available to colleges for nonemergency use. However, depending on the nature of the emergency, the full use of URF funds may be necessary.

Emergency Reserve funding requires project close‑out documentation, including submission of all project invoices to SBCTC.

Definition of Emergency

“Emergency” means an unanticipated event or condition affecting a state-owned college facility, building system, or infrastructure that requires immediate action and meets one or more of the following criteria:

1. Catastrophic loss or failure[i] of a building, building system, or critical infrastructure;
2. A condition that presents an imminent threat to health, safety, or property;
3. A capital repair that cannot be deferred to the next biennial capital budget cycle;
4. Work that cannot be accomplished through the Unanticipated Repair Fund (URF) and exceeds the college’s ability to respond using available minor works or preservation funding;
5. Circumstances where delay in repair would result in costly collateral damage to facilities, systems, or equipment;
6. Conditions that place significant portions of a college’s instructional or support programs at risk; or
7. Situations in which life safety or property risks are too great to remain unaddressed.

Emergency conditions often require rapid mobilization and may involve a formal Declaration of Emergency by the Department of Enterprise Services (DES) to expedite procurement or construction activities.

The State Board’s emergency reserve policy and procedures are separate from and independent of DES emergency procedures. SBCTC authorization governs the availability of State Board emergency funding, while DES authorization governs procurement and contracting authority. Authorization under one process does not imply authorization under the other.

Depending on the circumstances of the emergency, a college may be required to follow both SBCTC and DES emergency procedures in order to complete an emergency repair.

Exclusions

SBCTC emergency funds will not be considered for purposes of:

1. Augmenting non‑emergency local capital projects;
2. Augmenting state funded capital projects, including program or preservation projects, except under unforeseeable circumstances (e.g., extreme weather damage or other unexpected events); or
3. Funding repairs or replacements that can reasonably be deferred to a future biennial or supplemental legislative funding opportunity.

Allocation Formula

Emergency Reserve funding, in conjunction with local college resources, for a specific facility emergency shall be administered as follows:

For emergency repairs exceeding five percent of the college’s biennial Unanticipated Repair Fund (URF) allocation, the college’s required contribution shall consist of a five percent contribution based on the URF allocation (the “deductible”), with the remaining eligible project costs funded in accordance with Table 1.

Table 1: Emergency Reserve Allocation Formula

(Deductible-plus model)

* A college may be required to contribute more than one-third (1/3) or three eighths (3/8) of its biennial URF allocation when the SBCTC Emergency Reserve contribution reaches the maximum‑ allowable amount of $500,000 for a given emergency project.

Limitations

Emergency Pool funding shall be provided for qualifying emergency repairs with a minimum SBCTC share of $25,000 and a maximum SBCTC Emergency Pool allocation of $500,000 per event.

Emergency repair with a total cost of five percent or less of the biennial URF allocation to the college will be ineligible.

When an emergency repair requires total construction costs that exceed the $500,000 Emergency Pool allocation limit, SBCTC may limit Emergency Pool participation to that amount and, only if warranted by the circumstances, consider whether remaining work should be addressed through college reserves or a future capital request.

[i] Catastrophic loss or failure often presents an immediate threat to life safety or property. In such circumstances, work to repair or restore the affected asset may be initiated rapidly following a request by a college president for a Declaration of Emergency from the Department of Enterprise Services (DES). A declaration of emergency enables an expedited response by allowing certain procurement and contracting requirements, including standard A/E selection and public works bidding processes, to be bypassed when necessary to address the emergency.

6.60.20 Hazardous Materials Mitigation and Abatement Pool

The Hazardous Materials Mitigation and Abatement Pool supports colleges in addressing unanticipated hazardous conditions that pose a documented risk to human health or safety and require mitigation or abatement to maintain facility usability.

This pool is intended to address hazardous materials conditions that are discovered unexpectedly after the completion of good faith surveys, assessments, or other reasonable due diligence, and that could not reasonably have been identified, fully scoped, or budgeted during normal project planning or capital development processes. Good faith hazardous materials surveys conducted during project planning should be included in project bid documents. When hazardous materials conditions are known in advance or can reasonably be anticipated, colleges are expected to plan for and include associated mitigation or abatement costs within project budgets or other available funding sources.

Eligible Conditions

Eligible activities may include mitigation or abatement related to unanticipated hazardous materials or environmental conditions—such as asbestos containing materials, lead based paint or contaminated soils, mold resulting from concealed moisture intrusion, polychlorinated biphenyls (PCBs), mercury, radon[ii], or other indoor air quality hazards—only when the condition is discovered unexpectedly, and when:

• The condition is identified after the completion of good faith surveys, assessments, or other reasonable due diligence efforts, through testing, monitoring, demolition, construction, or other intrusive investigation; and
• Timely mitigation or abatement is necessary to protect occupants or maintain building operations.

Exclusions

Hazardous materials mitigation and abatement pool funding is not intended for:

• Good-faith hazardous materials testing associated with project planning or development;
• Routine testing, monitoring, or preventive maintenance activities;
• Known or previously documented hazardous conditions that could reasonably have been incorporated into a planned capital project or maintenance strategy; or
• Augmenting other state funded capital projects except where the hazardous condition was not reasonably foreseeable at the time of project approval.

Allocation Formula

100% of the cost of mitigation to a maximum of $500,000 per occurrence, including the cost of testing once hazardous materials have been determined.

Limitations

Allocations from the Hazardous Materials Mitigation and Abatement Pool shall be at least $25,000 and no more than $500,000 per event and may fund up to 100 percent of eligible costs.

[ii] Elevated radon levels requiring mitigation may be considered eligible when exceedances of established health or safety action thresholds are identified through testing or monitoring and could not reasonably have been anticipated or budgeted in advance. This recognizes that some colleges, including those located in areas with known radon potential, conduct ongoing monitoring and that mitigation may be required only when unexpected exceedances are identified.

Policy resources

• Emergency Reserve

Policy history

Action	Description	Revision Date
Board Action	Hazardous Materials Mitigation and Abatement Pool	02/1/2008
Board Action	Policy Update: Chapter 6.60 Emergency Reserve Fund	6/4/2026

SBCTC has established the Capital Analysis Model (CAM) as a tool to evaluate the quantitative adequacy of on-campus facilities to serve current or projected levels of student FTE. For each type of space, a square-feet-per-FTE factor is set. The model calculates total space needed by category that can be compared to actual space available (see CAM Factors under “Policy resources” below).

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Policy resources

• CAM Factors