University Capital Budgeting Business Practices Seminar Planning, Requesting, Funding January 10, 2007

Introduction This Presentation covers how the University defines a capital project, conducts long- range and short-range planning, approves capital projects, and pays for projects.

Capital Project Definition: New Construction Renovations Acquisitions Leases Capital Projects are any facility, infrastructure, equipment, or property acquisition that exceeds $1 million or 5,000 gross square feet of new space.

Long Range Capital Planning The University has a “Campus Master Plan” that provides guidance to the long range development of campus including space capacity, land use priorities, and infrastructure. This comprehensive, high level plan anticipates a wide array of development options and does not necessarily focus on specific buildings or programs.

Campus Master Plan The Campus Master Plan (CMP) is updated periodically, about once a decade. Representatives from all perspectives of the University are included to ensure a comprehensive vision of the future. The update process may take up to two years. The CMP is located for viewing at

Short Range Capital Planning The University uses a Six-Year Capital Plan (Plan) to identify, prioritize, and budget specific capital projects. The Plan is developed within the context and guidelines of the Campus Master Plan. The Plan is arranged in three biennia in accordance with the state budget process. The first biennium is for potential action; the second and third biennia are for planning purposes only. Six-Year Capital Plans are located at

Six-Year Capital Plan The Plan is updated every two years to coordinate with the State’s budget and planning process. The update process starts in the Fall of even numbered years and normally concludes in following March of odd numbered years. The Plan is developed with input from all senior managers and executive management. The Board of Visitors approves the Plan, normally at the March meeting of odd numbered years. Projects supported with 100 percent nongeneral fund support may become effective immediately after the capital plan is approved under restructuring. Projects with state support must go through the full state review and approval process that culminates in July of even numbered years.

The Plan and Strategic Positioning The Plan is a critical element in positioning the University for future State funding. The Plan should be compressive to adequately display the magnitude of the University’s envisioned capital needs – the Plan will likely be more than $1B. Projects with state funding are prioritized at the top and projects with 100 percent nongeneral fund support are the lower priorities to ensure they do not compete against projects that need state funding. The Plan should include projects of various cost ranges to ensure needs can match the State’s funding capacity.

Process and Schedule to Update the Plan for _capital_plan_updatehttp:// _capital_plan_update

Description of Projects on the Plan A project must support a specific program(s) with linkage to the University’s Strategic Plan. A project must be defined in terms of size, identification of specific building requirements, location, and infrastructure support. Projects must have funding plans.

Funding for Capital Projects Funding for capital outlay is based on the principles of fund accounting – the source of funds needs to be programmatically linked to the use of funds. Educational & General academic buildings including instruction and instructional support, research, and Agency 229 qualify for State support. Research space funding guidelines require at least 50 percent support from University resources. Auxiliary Enterprises must support 100 percent of their facility costs; state funds may not be used support facilities for these programs.

Major Funding Sources for Projects State Support: –General Fund cash and State debt through GOB programs and 21 st Century Bond program. University Support (nongeneral funds): –Auxiliary enterprise cash and debt. –Overhead funds to support research space (CCA1 and CCA2). –Private funds may be used to cover all project types. –Federal funds for specific grant programs (Transportation, NIH, DOD, DOA).