Capital Project Process Flow - DOC by T6Goo3

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									Proposed Revision: April 2008 DRAFT

                                Capital Project Approval Process
                                        Table of Contents

I.     Preliminary Project Proposal                                                      1

II.    Final Project Proposal                                                            1

III.   Project Proposal – Executive Review Committee                                     2

IV. Financial Plan                                                                       2

V.     Programming Study                                                                 3

VI. Annual Renovation and Infrastructure Plan                                            3

VII. Project Approval – Executive Review Committee                                       3

VIII. BOV Authorizations                                                                 4

IX. Post Approval Actions                                                                4

X.     Post Approval ERC Actions                                                         6

XI. Post Approval BOV Actions                                                            6


Exhibits:
      A – Project Initiation Form
      B – Business Plan
      C – Debt Assessment
      D – Private Funding Assessment
      E – Annual Renovation and Infrastructure Plan
      F – Decision Brief
      G – Loan Terms and Conditions Sheet
      H – Loan Approval and Acceptance Form


Key Stakeholders:
      University Budget Office
      Office of the Architect of the University
      Facilities Management
      Treasury Operations
      Comptroller/Debt Accounting
      Development and Public Affairs

Process for Revision:Contact Assistant Vice President for Budget and Financial Planning, University
Budget Office (msb2p@virginia.edu)
Proposed Revision: April 2008
                            CAPITAL PROJECT APPROVAL PROCESS

This process applies to all University of Virginia projects, including the Academic Division, the Medical
Center, and The University of Virginia’s College at Wise, as well as those to be constructed or financed
by the University on behalf of other entities (for example, the Judge Advocate General’s School).

I.     Preliminary Project Proposal

       1. Sponsoring unit identifies a facilities need (i.e. a building expansion or renovation or
          construction) that will exceed $1 million. Sponsor works with its internal constituencies –
          department heads/directors, deans/vice presidents, senior vice president – to develop project
          concept.

           During the development of the Ten Year Plan, this cycle will be initiated by call going out
           from the Vice President for Management and Budget (VPMB) for project proposals. The
           following steps through I.5. must be completed prior to submission to the VPMB.

       2. Sponsor obtains a Project Initiation Form (Exhibit A) from the University Budget Office’s
          Capital Budget website or the University’s Forms Directory. Sponsor develops Part I of the
          Project Initiation Form, including a description of the proposed project and a preliminary
          scope, budgeting, and funding plan.

           EXCEPTION: For Academic Division or Medical Center renovation or infrastructure
           projects, with a budget between $1 million and $5 million to be funded from non-general
           fund cash (no general funds and no debt), steps I through V are replaced with the Annual
           Renovation and Infrastructure Process. See Step VI.

       3. Sponsoring dean or vice president approves the preliminary proposal in Part I of the Project
          Initiation Form and forwards to either the VPP or the EVP/COO (as appropriate based on the
          type of project) via e-mail.

       4. The Executive Vice President and Provost (EVP/PRO) or the Executive Vice President and
          Chief Operating Officer (EVP/COO) (as appropriate based on the type of project) provides a
          preliminary approval of the Project Initiation Form and forwards this to the University
          Budget Office (UBO). At this point, the responsible executive vice president is simply
          approving the sponsor’s preliminary project and scope in concept.

       5. UBO uploads Part I of the Project Initiation Form to the Capitalplan.org database hosted by
          Prager, Sealy & Co. The project is flagged as a preliminary proposed project in the database.
          UBO notifies the University Architect’s Office and Facilities Management of the new
          proposal.

II.    Final Project Proposal

       1. A work group is established, lead the Office of the University Architect (OUA), and
          comprised of representatives from Facilities Management (FM), UBO, the sponsoring unit
          and, if the project is an academic project, the Senior Academic Facility Planner from the
          Provost Office and, if the project is a medical center project, a member of the Medical Center

                                                    1
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          Planning & Capital Development Office.. This workgroup will complete Part II of the
          Project Initiation Form, providing an official review of the site, scope, project budget range,
          and funding plan. This review will include, but is not limited to, consideration of utilities,
          storm water management, and other site work; LEED certification, the parking impact, and
          the application of the Grounds Improvement Fee.

           During the development of the Ten Year Plan, this review will also include placing the
           project at an appropriate biennium of the Ten Year Plan.

       2. After Part II of the Project Initiation Form is completed, the Project Initiation Form is
          returned to the EVP/PRO or the EVP/COO for final approval.

       3. UBO replaces the preliminary project in the Capitalplan.org database with the EVP-approved
          project. The project is flagged as a proposed project in the database.

III.   Project Proposal – Executive Review Committee

       1. The Executive Review Committee (ERC) is composed of the EVP/COO, the Senior Vice
          President for Development and Public Affairs, the EVP/PRO, the VPMB, the Vice President
          and Chief Financial Officer, and the Architect for the University. The Architect for the
          University will present new projects which been through both Part I and Part II of the Project
          Initiation. The ERC will consider whether to modify the project proposal or to provide
          approval to proceed with additional detailed review of the project (i.e., Financial Plan and
          programming study) and to tentatively add the new project approval to a future agenda of the
          Board of Visitors.

           During the development of the Ten Year Plan, this ERC review will be held at one time for
           all proposed projects.

       2. If ERC suggests modifications, UBO will make the changes to the project record in the
          Capitalplan.org database.

       3. Following ERC authorization and approval, UBO will initiate the Financial Plan review
          process and the OUA/FM will initiate a programming study. If the programming study is to
          be completed as a pre schematic design service by the selected A/E of record or as a separate
          professional services contract, ERC approval to advertise and select the A/E is required.
          (Melody – what funding source?)

       4. If the programming study and/or Financial Plan results in adjustment to the scope or budget,
           the revised project will be presented to the ERC for approval

           During the development of the Ten Year Plan, only projects that will be considered in the
           first two years of the plan will require the Financial Plan and Programming Study (?) steps.

IV.    Financial Plan
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       1. UBO begins work with the Sponsor to develop the Business Plan (Exhibit B), using the
          template from UBO’s Capital Budget website or the University’s Forms Directory, to
          determine expected funding from all sources for the capital project and on-going operations
          of the facility.

       2. If the Sponsor and UBO identify University debt as a planned or potential (i.e. bridge
          financing for pledges) fund source, UBO will request that the Director of Treasury
          Operations evaluate the impact of issuing any University debt for the proposed project and
          make a recommendation as to whether to proceed with the debt assumption in the Finance
          Plan. The Director of Treasury Operations will forward the completed Debt Assessment
          (Exhibit C) to UBO.

           During the development of the Ten Year Plan, Treasury Operations will consider the projects
           singularly and also in total in order to develop an overall Debt Assessment on the impact of
           all proposed debt in the Ten Year Plan.

       3. If the Sponsor and UBO identify philanthropy as a planned fund source, UBO will provide
          relevant information to the Senior Associate VP for Principal Relationship Development who
          will evaluate the private funding prospects for the proposed project. The Senior Associate
          VP will forward the completed Private Funding Assessment (Exhibit D) back to UBO.

       4. UBO will incorporate the Debt Assessment and the Private Funding Assessment into the
          Business Plan and will seek appropriate approval of the Business Plan from the Sponsor and
          appropriate VP.

       5. The UBO will upload the Business Plan into the Capitalplan.org database and will forward
          the Business Plan to the Architect’s Office for presentation to the ERC as a part of final
          project approval.

V.     Programming Study

       1. [steps to be added by FM/OUA/Senior Academic Planner] (Suggest Tom provide first draft
          here – again funding source for programming study by consultants?)

       2. Results or pending decisions from the Programming Study will be forwarded to the
          Architect’s Office for presentation to the ERC as part of final project approval.

VI.    Annual Renovation and Infrastructure Plan

       1. Internal, ERC, and BOV review and approvals are simplified and shortened for projects on
          the Annual Renovation and Infrastructure Plan (ARIP). Annually, each area develops a
          summary (see Exhibit E) of major maintenance, interior renovation, fit-out of shell space,
          and infrastructure projects with budgets $1 million and $5 million to be funded from non-
          general fund cash anticipated to be completed in the next year. Debt or state general funded
          projects cannot be approved through this expedited process. The respective VP reviews the
          APIP in conjunction with the annual operating budget review and submits to UBO by April
          1st of each year.
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VII. Project Approval – Executive Review Committee

      1. The ERC will review each project’s Financial Plan and results from the Programming Study
         and will consider whether to modify the project proposal or to provide approval to seek
         approval from the Board of Visitors.

         During the development of the Ten Year Plan, the ERC will consider the Plan in full for
         recommendation to the Board.

         Annually, the ERC will review and approve the University’s ARIP for recommendation to the
         Board.

      2. If ERC suggests modifications, UBO will make the changes to the project record in the
         Capitalplan.org database.

      3. Following approval to take the new project to Board of Visitors, UBO will add the project
         approval to the Finance Committee agenda (working with the EVP/COO office), the
         Buildings and Grounds (B&G) Committee agenda (working with the VPMB office), and any
         other appropriate committee as related to programmatic approval.

VIII. BOV Authorizations

      1. The chair or his/her designee of the appropriate committees will perform Programmatic
         Consultation and Reviews for each project. This will include: Education Policy Committee
         for academic buildings; College at Wise Committee for College buildings; Medical Center
         Operating Board for Health System buildings; Student Affairs and Athletics Committee for
         student, athletic, or housing projects; and Buildings & Grounds Committee for infrastructure
         projects. (Project Sponsor with UBO and/or O of A?) will develop any needed materials,
         including write-ups, resolutions, and presentations, for this review.

      2. The Finance Committee will review the Business Plans (including Debt Assessment and
         Private Funding Assessment) and Intent-to-Issue Debt items. UBO and the Treasury Office
         will develop any needed materials, including write-ups, resolutions, and presentations, for
         this review.

         During the development of the Ten Year Plan, the Finance Committee will consider the Plan,
         including overall Debt Assessment, in full.

         As a part of the annual operating budget review, the Finance Committee will review and
         approve the University’s ARIP.

      3. The Buildings and Grounds Committee will review each project, the scope and budget range
         and consider approval. UBO will develop any needed materials, including write-ups,
         resolutions, and presentations, for this review.

         During the development of the Ten Year Plan, the B&G Committee will consider the Plan in
         full.
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       4. UBO will update BOV approval information in the Capitalplan.org database.

       5. ERC reviews BOV-approved projects and determines priority based on consideration of state
          funding requests, debt capacity, etc.

IX.    Post-Approval Actions

       1. Under Restructuring, only projects requesting state general funds are required to be
          submitted through the formal state processes. For these projects, UBO will develop
          necessary requests, with assistance of the Architect’s Office and Facilities Management.

          During the state’s Six Year Plan cycle, the University will include courtesy submission of
          Form H-1s for all projects approved as part of the first six years of the University’s Ten Year
          Plan.

       2. UBO monitors actions by the Governor and General Assembly Reports to approve general-
          fund projects for authorization actions.

       3. For Non-General Fund projects (including those approved as part of the University’s ARIP)
          exceeding $2 million, the University must notify the Governor and the chairs of the Senate
          Finance and House Appropriations Committee 60 days in advance of the start of
          construction. UBO will draft such correspondence upon approval by the Board of Visitors
          and forward to the VPMB to review and obtain the signature of the President before
          forwarding to the state officials.

       4. UBO coordinates the update of the Prager database for authorization information and
          provides information to Facilities Management to update PIMS.

       5. For projects authorized to proceed by the ERC? (including those approved as part of the
          University’s ARIP), Facilities Management prepares HECO-2 Forms; the Budget Office
          approves HECO-2 Forms; and Facilities Management approves and provides notification to
          DGS. (Melody – by restructuring we have post appropriation autonomy so we approve the
          HECO 2 for GF locally as well as NGF. We do send copies of all approved HECO 2’s, 8’s,
          14’s to DGS via BCOM meeting the Management Agreement requirement that for all Capital
          Projects over $2M we notify DGS on project initiation (copy of the HECO 2), prior to
          construction (copy of the HECO 8) and at acceptance of construction (copy of the HECO 14)
          – (Note we do for all projects).

       6. Facilities Management prepares and submits GF allotment requests to the Department of
          Planning and Budget.

       7. Facilities Management creates projects and awards in the Integrated System as needed for
          new authorized projects.

       8. The Controller’s Office (Senior Technology Advisor) coordinates update of the
          Capitalplan.org database for revised draw schedules and project expenditures by automatic
          upload from Oracle Grants Management actual data and Facilities Management draw
          schedules on a regular basis or upon request by Treasury Operations.
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       9. Facilities Management must develop a Decision Brief (Exhibit F) outlining any project
          budget increases or any scope reductions of over 10%? (including those projects approved as
          part of the University’s ARIP). The Budget Office will review each Decision Brief
          developed by Facilities Management regarding changes in project budgets to determine the
          impact on the existing Business Plan. If a modification is required, the Budget Office will
          coordinate with Treasury Operations and Development as needed. (Who approves the
          Decision Brief based on size of change worth considering further?) See section XI 3 and 4
          below for BOV approval criteria.

       10. VP/CFO coordinates the lending of funds as outlined on the approved Business Plan for each
           respective project from the University’s central bank to sponsoring units. The VP/CFO and
           sponsoring unit will execute a loan approval and acceptance document between the VP/CFO
           and the dean or Vice President of the sponsoring area. See Exhibit G for sample loan terms
           and condition sheet and Exhibit H for a sample loan approval and acceptance document.




X.     Post Approval ERC Actions

       1. Preceding Schematic Design. ERC may require an evaluation of fund raising efforts at the
          end of the preliminary design stage before moving to schematic design. If fund raising is
          lagging behind projections, ERC may request that the project scope be reduced or timing of
          project be adjusted to stay within funding.

       2. Post Schematic Design. ERC will approve a firm, not-to-exceed, project budget at the
          completion of schematic design.

       3. Preceding Construction. This phase begins only if (1) 100% of philanthropy identified on the
          approved Finance Plan, valued on a present value basis, is either received or committed via
          written enforceable pledges on a present value basis are in hand and (2) 100 % of the written
          enforceable pledges will be collected prior to construction completion. Exceptions can be
          made if either (1) the project sponsor demonstrates funding to cover short-term financing
          costs as pledges are collected or (2) the EVP/COO and the Finance Committee chair
          approves the beginning of construction.

XI.    Post Approval BOV Actions

       1. The Finance Committee will review and approve any Acquisition Requests. Space and Real
          Estate Management will develop any needed BOV materials, including write-ups,
          resolutions, and presentations, for this review.

       2. The Finance Committee will review and approve debt actions, including Intent to Issue
          Bonds and Bond Issuances. Treasury Operations will develop any needed BOV materials,
          including write-ups, resolutions, and presentations, for this review.
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       3. The Buildings & Grounds Committee, at appropriate point, will review and approve Concept,
          Site, and Design Guidelines, Architect/Engineer Selection, Schematic Designs, Easements,
          Demolitions, and Deed Restrictions. At the time of the Schematic Design consideration, the
          Committee will also approve the firm, not-to-exceed project budget. Facilities Management
          and the Architect’s Office will develop any needed BOV materials, including write-ups,
          resolutions, and presentations, for this review.

       4. The Finance and Buildings & Grounds Committees, or their respective chairs, will review
          and approve any project budget increase in excess of 10 percent. If approved by the
          Committee Chairs, the full Committee is later notified of these actions. UBO will develop
          any needed BOV materials, including write-ups, resolutions, and presentations, for this
          review.

       5. The Buildings & Grounds Committee, or its respective chair, will review and approve any
          scope reductions in excess of 10%. If approved by the Committee Chair, the full Committee
          is later notified of these actions. UBO and/or the Architect’s Office will develop any needed
          BOV materials, including write-ups, resolutions, and presentations, for this review.

								
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