Wyoming lawmakers unwrap capital construction budgetBy Gregory Nickerson — December 24, 2013
If you’ve ever visited a school or state government building in Wyoming, you’ve come face-to-face with the results of the Legislature’s sizable capital construction budget. Over the past few weeks, lawmakers have started considering what projects to build in 2015-2016.
As part of hearings leading up to the 2014 budget session, the state’s Joint Appropriations Committee has been reviewing construction proposals described in Gov. Matt Mead’s spending plan.
Mead’s plan includes $632 million in funds for building, remodeling, and maintaining the state’s physical plant. While that might sound like a big investment, it represents just 7.5 percent of the proposed state budget of $8.389 billion.
The money for facilities can be split into two major parts: funding for K-12 schools, and funds for all the other state agencies. This year, the non-K-12 agencies requested $339 million in construction funding. The State Building Commission cut that down to $324 million, and Gov. Mead’s plan whittled it further to $212 million.
If approved by lawmakers, that money will go to building projects at the University of Wyoming and community colleges, the Department of Family Services, the Military Department, and others. The Department of Health has also proposed $60 million in design funds for future projects.
On top of that, the state will continue spending on its massive K-12 School Capital Construction effort with a $229 million proposal for major building projects across the state. The total School Facilities Department budget request of $420 million also includes money for design, major maintenance, and minor construction. The K-12 schools are a major part of the legislature’s effort to improve learning outcomes for students by offering a more even quality of educational facilities across the state.
“At the end of the day when we are sitting in Cheyenne, we know these schools are very important to these communities,” said Bill Panos, the recently hired director of the School Facilities Department.
The level of construction spending recommended by Mead is not much higher or lower than the last biennia, and is part of an overall 2015-2016 state budget that is essentially flat. “We will not change our ways — we will keep our fiscally disciplined approach — but we will exhibit the wisdom, born from experience, to ‘pay it forward’ at a time when we can responsibly do so,” Mead wrote in his November 29th message.
School Facilities Department
Capital construction at Wyoming’s K-12 schools accounts for the majority of state spending on new buildings. During the early 2000s mineral boom brought about by coal-bed methane and deep natural gas, the state embarked on an ambitious project to modernize every K-12 school in the state. In terms of dollars spent, this has been the legislature’s top construction priority for more than a decade.
Since 2002, some 3.7 million square feet of school facilities have been closed, demolished, or disposed of across Wyoming. This leaves the state with 21.8 million square feet of education buildings in the K-12 system.
The state has allocated $2.7 billion for the school construction program since 2002, spent about $1.9 billion over those years, and built about 4.4 million square feet of new schools. On average, the state spends about $168 million a year on construction, which hasn’t actually kept up with the amount of funding allocated. With money going into construction accounts faster than it can be spent, the state has built up a $640 million backlog of projects.
“With capital projects, they take an unpredictable amount of time. Because of that you could generate a bit of a backlog in a program of this size,” said Bill Panos. He is the new head of Wyoming’s School Facilities Department who started work in August. Panos previously oversaw construction for the school system in Washington state.
In this year’s budget request, Panos is asking to spend $229 million for school construction, or about $60 million more than the average annual outlay since 2002. Over the next four years, Panos wants to boost the average school construction spending by 55 percent to $260 million per year, which will help eat into the backlog.
“We think that by reorganizing work and fully staffing here and then shifting the focus from Cheyenne out to the school districts we can increase our output,” Panos said. “I am opening up the diameter of the pipe so we can get more (projects) through for the citizens and the districts.”
Increasing spending means the School Facilities Department will be able to raise their completion rate for projects left over from previous biennia. Panos expects that by the year 2020 the state’s school facilities will be in good enough shape to shift away from new construction to focus mostly on maintenance and major repairs.
In a press conference held last week, Gov. Mead explained that the rate of school construction spending is carefully watched by the School Facilities Commission. “If we put out too much money we inflate the prices, and if you go too quickly you draw out of state contractors,” Mead said. “The commission tries to figure out what the right amount of spending year to year.”
Gov. Mead’s spokesman Renny MacKay said the increased rate of spending proposed by Panos will be carefully monitored and adjusted to prevent inflation and competition from out of state contractors.
New construction is just part of the $412 million in spending proposed by the School Facilities Department. The department also recommends $108 million for major maintenance of school buildings. That number is calculated based on 2 percent of the replacement value of the buildings, with newer buildings getting less. “It’s like your car. You put money into it to make sure you maintain it to realize its entire scheduled life,” Panos said.
The School Facilities Department also requested $6.2 million in spending to replace entire components of schools, also known as minor capital projects. That includes things like replacing roofs, or heating ventilation and air conditioning systems.
Other department requests include $20 million for design, $9.5 million for land purchases, and money for demolition, engineering contracts, and operations.
Last year, the average school construction cost per square foot was $237.94 dollars. Panos says that’s roughly average among other states he’s worked in. “These are highly utilized institutional buildings. They cost a lot to build, maintain or repair,” Panos said. “We build a lot, but we are generally in the same ballpark as other states in terms of price per square foot.”
“One of the things that is very unique is that we don’t really pass local bonds to build our public schools, except for enhancements,” Panos said. “We are very fortunate to be able to keep our taxes down by balancing out with our (mineral) resources.”
In the past, Wyoming schools were funded locally, leaving some districts that have low assessed valuations with little bonding capacity to build schools. Through a series of Wyoming Supreme Court cases known as the Campbell decisions, the state was required to step in and create a more equitable funding model that redistributes money from wealthy counties to those with fewer resources. “It’s a partnership between the districts and the state that you get a fundamental equity,” Panos said. “The districts are left free to do what they want (for enhancements), but there is always a safety net there.”
Panos presented the School Facilities Department budget request to the Joint Appropriations Committee at a December 19 meeting. The committee made a few minor amendments to a draft bill from the Select Committee on School Facilities then approved the measure for introduction in the House at the opening of the legislature’s budget session in February.
State agency construction proposals
Wyoming’s K-12 construction and maintenance proposal of $420 million dwarfs the $212 million proposed for community colleges, the university and other agencies. Part of the reason is that K-12 construction money comes from the School Capital Construction Account. That account is fed in part by coal lease bonuses that Wyoming receives when the federal government auctions off parcels of public mineral lands for mining.
On the other hand, construction for colleges, the university and other agencies usually comes through the General Fund or the newly created Strategic Investment Projects Account (SIPA). Those accounts have dozens of agencies potentially drawing on their resources for money. The result is that proposed construction projects outside of K-12 schools are more likely to be denied endorsement from the governor.
This year, nearly every community college submitted construction proposals. Out of 12 projects proposed at 10 locations, Mead approved just four, with only the projects in Cheyenne and Torrington using state funds.
The community colleges originally requested $224 million in construction funding, and Mead approved about $34 million in state funds. “I looked at the total dollar amount, but I thought it was very large, so I decided I would choose a few and I chose the ones I thought were most relevant,” Mead said.
Gov. Mead recommended that the Joint Appropriations committee approve $14.1 million for a technical education center at Laramie County Community College in Cheyenne. Local bonding funds would provide about $7 million of that $14 million total.
At Eastern Wyoming College in Torrington, Gov. Mead recommended $22.9 million for a tech center and $3.8 million for the Lancer Hall dormitory expansion. Goshen County will contribute about $900,000 in local bonding funds from taxpayers for the tech center project. The county has a population of just 13,000 people.
The relatively small amount of local match required for the Eastern Wyoming College tech center is due to Goshen County’s low assessed valuation of $160 million. The county’s debt limit is 4 percent of its assessed valuation, which puts the bonding capacity at just $6.4 million.
“I recognize that while other communities can put up larger dollar amounts (through bonding), Torrington can’t, and the only way you can get those projects done is a larger percent of state match,” Mead said in a press conference held last week.
Gov. Mead also recommended granting Sheridan College the authority to raise $18.5 million in private funds for expansion of the tech center. The legislature must approve the spending of private funds on campus construction because the buildings will eventually be maintained by public money from the state.
This past August Sheridan County residents voted down a $15.8 million bond issue to expand the Sheridan College tech center. Since then, several anonymous donors have stepped forward to begin funding the tech center project in stages. In an email to WyoFile, college president Paul Young explained that the first phase is a $1 million renovation to the existing tech center.
Gov. Mead recommended denial of funding for:
- Joint UW Center, Laramie County Community College, $26 million
- Sheridan College Science/Ag/Culinary Center, $13 million
- Riverton Student Success Center, Central Wyoming College, $4.9 million
- Gillette Activity Center, $18.9 million
- Student Success Center, Western Wyoming Community College, $1.2 million
- Digital Education Building, Western Wyoming Community College, $10.6 million
- Jackson Center, Central Wyoming College, $11.7 million
- Agriculture and equine Center, Casper College, $10.6 million
“Community colleges continue to be a significant part of Wyoming’s higher education system,” Gov. Mead wrote in his budget message. “I want to continue to support capital construction projects at our community colleges. They are difficult to prioritize and the Legislature and others might have different ideas.” Mead suggested the state might need a more accurate system for assessing needs at the colleges.
Funds for the community college construction budget are appropriated through the Department of Administration and Information, called “A&I” for short. The Appropriations Committee hearing for the A&I capital construction will take place on January 17 at 1 p.m. in the State Capitol.
The University of Wyoming
As the only publicly-funded 4-year institution in the state, the University of Wyoming has received significant support from the state legislature. In recent years, state construction money has been focused on rebuilding the College of Engineering and Applied Sciences to bring it up to “tier one” status.
Since 2012, the legislature has set aside $95 million to rebuild the engineering school and expand its programs. Private and corporate donations will add another $15 million to the project to total $110 million. In terms of dollars, this is the largest capital construction project ever undertaken on the university campus. For more, read this WyoFile story.
For 2015-2016, Gov. Mead recommended releasing $7.9 million of the College of Engineering funds to continue planning and design for the project. He also proposed $10.5 million to be spent on equipment and research at the “high-bay” engineering research facility to be built in the northeast corner of campus.
Further, Mead recommended an immediate appropriation of $5 million to finish reconstruction of the Arena Auditorium, and $6 million for installing two new on-campus water wells to supply irrigation water for landscaping at the university. Summertime water shortages from the existing university wells have caused the campus to rely on municipal water from the city of Laramie, which is not cost effective, according to Chris Boswell, the university’s vice president for governmental and community affairs..
Finally, Mead recommended $4 million for upgrades to classrooms, out of an $8 million request. Much of this money will be used to upgrade technology and furniture in classrooms across campus.
Mead did not recommend funding for the following university requests for this biennium:
- $2.75 million for reconstructing King Street between the dormitories and Sorority Row.
- $4 million in additional funding for classroom upgrades
- $350,000 for planning of the Cirrus Sky Technology park proposed for the north side of Laramie
- $800,000 for planning a building on UW property to house the Albany County Campus of Laramie County Community College
- $500,000 for planning reconstruction of Corbett Pool
Present construction projects underway at the university include the Half Acre Recreation Center, the new Performing Arts Building, the Arena Auditorium, and the Enzi S.T.E.M. building for undergraduate laboratories.
In his budget message, Mead praised the university, writing, “It is a jewel in our crown, and we continue to add to its luster.”
Department of Family Services — Boys School
Gov. Mead recommended $13.1 million in General Fund dollars for the Department of Family Services to build a new school building at the Wyoming Boys School. The current school building on the campus near Worland was built in 1965. Since that time, the Boys School has become a fully accredited secondary school tasked with educating all of its 100 residents.
Overcrowding in the current school means that approximately 40 percent of the students utilize classrooms housed in two dormitories. The new 40,000 square foot building will be designed by Plan One/Architects of Cody to accommodate 100 students and utilize the existing gymnasium on campus.
The Joint Appropriations Committee hearing for this Department of Family services capital construction request will take place on January 16 at 8 a.m. in the State Capitol.
Department of Health
Outside of the regular state capital construction budget, Gov. Mead recommended funding for $60 million in planning and design work for renovations at the Wyoming State Hospital in Evanston, the Wyoming Life Resource Center in Lander, and the Veterans Home of Wyoming in Buffalo.
Each of these campuses has buildings built before World War II. The funds will help redesign and consolidate each campus to meet current and future needs. The planning project will further develop a recently completed study documenting the condition of each campus and proposing future building plans.
Gov. Mead justified the need for the $60 million in spending with the following statement in his budget message: ”When the State signs up for the responsibility to care for vulnerable people, there is a corresponding ethical obligation to ensure those people are safe, the services and facilities are effective and the programs are structured to meet the needs of the individuals.”
Other capital projects
Smaller capital construction projects recommended by Mead for the 2015-2016 budget include:
- Accessible outhouses at Game and Fish hatcheries
- Improved guest service facilities at the Wyoming Territorial Prison
- An outbuilding at the Wyoming Law Enforcement Academy
- New floors at the Livestock Pavilion at the Wyoming State Fairgrounds in Douglas
- A remodel of the Emerson Building in Cheyenne
- An improved water drainage and a fence detection system at the Wyoming State Prison in Rawlins
- $100,000 for an elk fence around a private guest ranch owned by the Wheedon family near Jackson Hole. The ranch is adjacent to a Wyoming Game & Fish elk feedground, and the elk routinely cause damage to hayfields on the private property. The Wheedon family has made successful claims for property damage against the Game and Fish.
Federal Funds: Military Department
The Wyoming Military Department proposed projects to build a new Armory in Afton for $13.4 million, and a new facility at the Regional Training Institute at Camp Guernsey for $31 million. Both of these projects will be paid for with federal funds totaling $44.4 million.
Building to invest
In Gov. Mead’s budget request to the legislature, he called buildings and other capital projects like water pipelines and fiber-optic networks, “long-term investments that return dividends to the state in real and diverse ways.” In his view, such projects provide an important and practical diversification to the state’s traditional investment portfolio.
“Infrastructure is another form of savings and it does not fluctuate with the market,” Mead wrote. “It supports local communities, commerce, industry, education and citizens.”— Gregory Nickerson is the government and policy reporter for WyoFile. He writes the Capitol Beat blog. Contact him at firstname.lastname@example.org. Follow him on twitter @GregNickersonWY.
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