Capital Planning Process: Pre-Planning
A capital project begins when someone believes that facilities are not available to allow them to successfully complete their goals. At this point, they become a client of Facilities Planning. They feel the solution to the problem is new or remodeled space that more fully meets their needs. These ideas come from a variety of sources including students, faculty, staff, and the public -"If we only had a new building with more space and better equipment, we could be successful".
Projects become candidates for further development after approval by the President and following review by the affected Deans or Vice President and the Provost.
Capital projects are often the result of programmatic changes. A department has a problem with space as a result of changes in their program or deterioration of their current facilities. Enrollment changes have triggered the need for new or modified facilities. Changing research activities requiring different or additional space to support laboratory needs have become a major influence in the need for space. The one thing all of these changes have in common is consistency with the University Strategic Plan.
Facilities Planning helps the client define the scope of the project. The client may not have considered all of their needs or completely defined the program and its relationship with other activities. Facilities Planning works with the client to define the problem and investigate solutions. We occasionally combine the needs of several programs into a single project to create a coordinated solution. For major remodeling we develop a comprehensive project to address all of the facilities needs, including fire safety, deferred maintenance, accessibility, and energy conservation.
College administrators review the project to establish justification and priority. The college judges the project and its relationship to the strategic plan and the priorities of other projects in the same college. Changes may be made for a variety of reasons - the project is not needed because the problem can be solved in another way or the need is no longer great enough to warrant significant capital investments.
Preparation of cost estimates is important. In the early stages of development, there is limited information available. These early cost estimates are based on cost-per-foot for similar projects and their accuracy is therefore limited by lack of detail. As the project concepts are more fully refined, including site, we are able to develop specific and accurate component costs.
Projects are reviewed by the President's Capital Projects Advisory Committee (CPAC) where concept approval is required before more detailed planning is initiated. Facilities Planning assists the CPC only by reviewing and preparing budgetary cost estimates to determine the feasibility of a project. There are a number of levels of review and decision points to make sure that a project is justified. The administration and the Board of Regents review the project in the context of the approved strategic plan of the university.
Completion of the Campus Master Plan has allowed the university and the Board of Regents to relate the need for a project with long-term development plans of the university. Additionally, the administration review considers the relative priority of each of the projects and its likelihood of success and constituent support. Project needs often can be solved in a number of ways and it may be helpful to combine the needs of several small projects into a single larger project. Change may result from adjustments to several projects because vacated space will be available. Projects are occasionally phased to meet either programmatic, construction or funding constraints.
Analysis and Alternatives
Facilities Planning's role in the earliest stage of project development is to assist the university community in understanding, and perhaps validating, the relationship of client's problems and available facilities. Clients come to Facilities Planning with ideas that they feel will solve their problems. Our first obstacle in project planning is to learn about their situation so that every possible solution may be considered before the project advances. We provide answers and advice to four questions:
- What space is currently available?
- How is the space being used?
- What space is needed?
- How should space be acquired?
Much of the information about a department or program comes directly from the client. We want to know what they want to accomplish, how they do it, why they do it, and where. They share mission statements, goals and objectives, and how they relate what they are doing to the strategic plan of their units, college, and the university. The information can be as specific as individual projects and activities or as general as the support they provide to the entire university in meeting university wide strategies. They try to help us understand what resources are being used or needed to accomplish their goals, including personnel, facilities and equipment.
Other information about a unit is already available to us. Facilities Planning is responsible for maintaining the Facility Assessment Model as a tool to judge the adequacy of the facilities resources to meet program needs. It is intended to aid in the management of facilities process by relating space requirements to the activities that take place in a department. This information serves as objective input to resource allocation decisions and the Capital Planning Process. It is not intended to be an in-depth analysis required to understand the needs of a department with changing programs. What it can do is provide commonly defined data about departments in an attempt to evaluate the needs of each program equitably. Elements of the Model include the following:
- A complete and comprehensive database which classifies existing space allocated to the unit with enough detail to assist departments in understanding what level of resources are currently being used.
- A room utilization reporting structure that identifies the frequency and extent of regularly scheduled instructional activity, both classrooms and teaching laboratories.
- A human resource report of the graduate students, faculty, and staff employed by the department with enough detail to identify the level of activity associated with teaching and research programs.
- An enrollment report showing both undergraduate and graduate departmental majors.
This information and existing university standards are used in a series of algorithms to calculate estimates of the space required by a department. The Facility Assessment Model is one of the first things we share with a department client that comes to us with a problem. It can either confirm or refute some early arguments about the amount of space needed by a department. Quite often departments learn a great deal about themselves by looking at the Facility Assessment Model's raw information and algorithms. We also use the data to begin more detailed studies of a department. The studies look at the program's actual facilities and their condition. The Facility Assessment Model tells us a great deal, but visits to the space show us that not all space is functionally equal and functional obsolescence may be contributing to a department's inability to effectively use available resources. We also identify the diversity of a department's activities and how the need for space is affected by those differences. All college and university facilities are a part of the review of alternatives. If space in another program is underused and may be made available to solve a problem, the block allocation of facilities to other units requires mediation of space reallocation from areas of surplus to areas of deficit. College and university administration are involved in deciding how existing space will be used to solve developing space problems and must make the choice of building new or reallocating and remodeling existing space. At this point in the process, the university seeks Board of Regents approval to begin formal project planning.
Capital projects are funded in a number of ways including legislative appropriations or bond authority, general university operating funds, contracts and grants, and private gifts. Many times project funding includes multiple sources. Availability of funds and the lead-time required to secure funds differs substantially among the sources. The type, availability, predictability, and timing of funding can have a significant impact on project schedule requiring careful coordination.
Although state appropriations continue to be the major source of funding for the Capital Development program, there is a trend in recent years towards an increased dependence on donated money and pledged gifts for significant portions of project budgets. Virtually all major projects currently in progress include donated funds as a significant fund source. Donated funds bring with them circumstances and uncertainties. These include the following:
- Since donated funds are often in the form of future pledges, a situation where a portion of the project funding may not be available at the beginning of project construction. This means that either a portion of the project cannot be awarded until any uncertainties in the available cash flow are resolved, or alternative means of satisfying the project cash flow must be secured.
- The solicitation of donations from a source for one project can affect the donated funds for another project. The solicitation process is not always a well-coordinated and seamless effort.
- The level of donations is not always clearly defined and quantified, especially when donations are in forms other than cash such as gifts in kind, donated services, purchase rebates, etc. It is imperative that these types of donations be carefully controlled, accurately quantified, and effectively managed to allow for timely and informed budget decisions.
- The expenses, which will be incurred by a project for items such as donor recognition, are not always accounted for in the initial project budgeting process. This can result in a situation where the net level of funding is less than the original commitment.
Donated funds are a reality in the current political and legislative climate, which must be effectively handled. Facilities Planning is willing and anxious to work with the entities responsible for fund raising to improve the effectiveness of the process.
Legislative appropriations or bond authority takes the longest time to acquire. The university's Five Year Capital Program identifies and advances for consideration by the Board of Regents, Governor, and Legislature, capital projects requiring state funding. These projects are generally new buildings, additions, major remodeling, and other campus-wide needs that cannot be adequately supported from other sources. The Program is the university's request to the legislature for support of larger projects, generally exceeding $1 million and requiring assistance from design consultants and general contractors.
Facilities Planning begins development of the Five Year Capital Program by reviewing the previous year's unfunded projects. Changes may be made for a variety of reasons including; (1) the project is no longer needed because the problem has been solved some other way, either the need for space has changed or was funded in another way or relocation solved the problem, or (2) project scope has changed. The university administration reviews the projects to consider the relative priority of each project and its likelihood of success, constituent support and relevance to the university's strategic plan.
The number of project categories and the format for preparation of the Program changes periodically but the typical information includes: Statement of the Problem, Description of the Project, Justification of the Project, Summary of Alternatives Considered, Project Cost and Source of Funds, Project Schedule and History of Previous Action. Facilities Planning takes the lead in development of this material but the involvement of clients is very important at this stage because the project requests are the foundation for everyone's understanding of what the university intends to do and how the project will allow the university to meet its goals.
The Program is prepared at least a year in advance of legislative consideration and commits the university to requests at a very early stage. We are required to do enough project development to be able to answer the questions posed by the process and do it with enough accuracy to be able to live with the results when the project is funded. Funding that is delayed for another year allows us to update the request but very often the project concepts are in place and difficult to modify.