Construction and Capital Improvements Funding Policy
Status: Adopted by the Board of Trustees on January 24, 2010 and revised on October 5, 2017.
The Business and Financial Affairs Committee, with input from the Subcommittee for Buildings and Grounds, provides planning and financial oversight pertaining to construction and capital investments funding at the University. This policy specifically establishes funding policies for the University with respect to capital investments and construction projects.
Any construction project proposed to be undertaken at the University through gifts or pledges to the University must meet the following parameters:
- The University will have received firm, written funding commitments for 100% of the estimated total cost of the construction project (including ground improvements, provision of necessary furniture and equipment, and demolition of existing structures), and
- The University will have received a minimum of 75% of project costs.
For those projects estimated to exceed total construction costs of $1,000,000 and for which the University seeks to support through debt financing or through use of operating budget surpluses, the Vice President for Finance and Administration will present to both the Subcommittee for Building and Grounds and the Business and Finance Affairs Committee a long-term plan indicating how the University will manage costs associated with such financing options.
The Vice President for Finance and Administration will periodically review the funding status of each project, and upon certifying that the project has met the policy benchmarks, may authorize the project to commence. In the case of major capital projects or projects that fail to meet benchmarks, the Business and Financial Affairs Committee of the Board of Trustees will assess progress toward achieving these benchmarks and make recommendations to the full Board to begin construction as appropriate.
In a situation where immediate/emergency action must be taken to address a capital need of the university and policy compliance is not possible, the President and Vice President for Finance and Administration are authorized to seek specific approval for the project from the Executive Committee of the Board of Trustees.
Construction bids will be obtained for all capital projects in excess of $25,000. If for some reason a capital project needs to commence without obtaining competitive bids, prior written approval must be obtained from the President and the Vice President of Finance and Administration.
If construction bids are received in excess of original project estimates, and these higher bids result in a failure to meet the benchmarks set forth in these policies, the project will not proceed unless additional funds are secured, sufficient reductions in the project are made so that benchmarks are met, or the President and the Vice President of Finance and Administration re-approve the project in its deficit position.
In addition, the ongoing overhead, maintenance, and renewal costs, should continue to be planned for and added each year to the operating budget, and where appropriate, should be increasingly endowed, as part of the regular budgeting process of the University. The Business and Financial Affairs Committee will review budget forecasts with amounts to be added no less than annually.
The Business and Financial Affairs Committee of the Board of Trustees will review this policy on a periodic basis, and not less than annually, and make appropriate adjustments based on the national economic environment and the financial position of the University at the time of the review.