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9.03          Procedures for Capital Improvement Projects     

      A.       Definition of a Capital Project  

1.     A capital improvement project is one which provides for the construction, repair, or improvement of buildings (including fixed equipment within buildings) or grounds under jurisdiction of the Board of Regents.  

2.     A major capital improvement project is defined as any new building construction project with an estimated project budget of $1 million or more or any building renovation project with an estimated project budget of $2 million or more.  

      B.       Duties and Responsibilities      

1.     Duties of the Board of Regents  

Whenever a capital improvement project is proposed or undertaken at any institution under the control of the Board of Regents, the Board may, as provided for in this Chapter:  

                        a. Grant permission to proceed with project planning.  

                        b.  Approve a program statement.

                        c.  Approve the schematic design and design development drawings.

                        d.  Approve a project description and budget and revised project budget.

                        e.  Approve the selection of a design consultant or a construction manager and the agreement with the consultant or manager and participate in the architectural selection process.

                        f.  Approve amendments to a design consultant or construction manager agreement.

                        g.  Approve rejection of bids and contract awards. 

                        h.  Approve change orders to construction contracts.

                        i.  Delegate responsibility to the executive director or the institution as provided for in this Chapter.    

                2.     Duties of the Executive Director    

                     Whenever a capital improvement project is undertaken at any institution under the control of the Board, the executive director is authorized and directed to carry out provisions of this Chapter, including:  

                        a.  Negotiate financing arrangements other than appropriations as directed by the Board of Regents and report to the Board.  

                        b.  Receive certification from the institution's chief business officer that the nature and scope of a project is substantially the same as approved by the Board.  

                        c.  Approve program statements; design consultant selection, negotiated agreements and amendments; project descriptions and budgets, and revised budgets; and construction contract change orders as provided for in this Chapter.  

                        d.  Award construction contracts as provided for in this Chapter.  

                        e.  When it is determined to be in the best interest of the Regent enterprise, reject all bids and/or recommend alternative procedures.  

                        f.  Advise the Board on capital procedure actions recommended by the institutions.  

                        g.  Refer capital procedure actions requested of the Board Office to the Board at the discretion of the Board Office.  

                        h.  Act on behalf of the Board on capital procedure actions subject to ratification of actions taken by the Board when failure to take immediate action would have an adverse impact on institutional programs, cause an unnecessary delay in the project, result in increased cost, or when it is otherwise in the public interest.   The Board shall be informed of such executive director actions at the next Board meeting.   

                        i.   Advise the Board regarding institutional plans for fundraising for capital projects.  

                        j.  Provide reports to the Board as may be needed.  

                3.  Duties of the Institutions   

                     The institutions under the control of the Board of Regents are authorized to carry out on behalf of the Board duties as provided for in this Chapter including:  

                        a.  Survey needs, recommend capital projects and capital procedure actions to the Board.  

                        b.  Furnish members of its staff to act as architect, engineer, or associate architect or engineer, when it is in the institutionís best interest to utilize its staff, rather than consultant(s), to provide these services.  

                        c.  Act as project manager.  

                        d.  Certify to the executive director that the final plans and specifications have been completed in conformance with the nature and scope of the project approved by the Board.  

                        e. Make all reports and secure approvals as required by other governmental agencies.  

                        f.  With the approval of the chief business officer of the institution and consistent with policies outlined elsewhere in this Chapter, conduct projects, including approval of project descriptions and budgets, revised budgets, design consultant agreements and amendments, contract awards or rejection of bids, and change orders.  

                        g.  Notify the executive director whenever it is determined that a contractor or consultant is not performing satisfactorily, and when consideration is being given to removing the contractor or consultant.  

h.    Submit to the Board Office a semi-annual report for all ongoing capital projects over $250,000 as of June 30 and December 31 of each year, within 45 days of the end of each semi-annual period.  The content and format of the semiannual report will be provided by the Board Office.  

i.     Notify the executive director prior to solicitation of private and/or federal funds for major capital projects by an affiliated organization or the institution.   

                4. The Board Office and institutions shall meet regularly to: a) discuss issues related to capital projects; b) ensure coordination of capital project policies and procedures; and c) provide, upon the Boardís request, advice on capital project policies and procedures, and reports on activities.  

      C.      Capital Project Evaluation Criteria  

The institutions shall submit information to address the Boardís capital project evaluation criteria for major capital projects as defined in this Chapter when Permission to Proceed with Project Planning is requested and when approval of the schematic design and project description and budget are requested.  The criteria are outlined below:

1.   How does this project help fulfill the institutionís mission and strategic plan in the following areas:

Faculty needs in areas strategic to the university?

Program accreditation?

Student demand?

Other strategic plan-related criteria?

Environmental health and safety?

2.   What other alternatives were explored to meet the needs identified in number 1 above, why were they rejected and why is the proposed project the best way to meet the identified need?

3.   When this project is completed, what facilities and total square footage will be abandoned, transferred or demolished and how does this compare to the new or renovated square footage?

4.   What financial resources are available to build/remodel/renovate the proposed capital project including:

Source(s) of funding?

Availability of funds as it relates to cash flow requirements?

Income stream to provide debt service on bonds, if they are to be issued?

      Calculation of financial return on investment, when applicable?

5.   What resources are available to operate and maintain (O&M) the
       proposed capital project without compromising current programs
       and operations:

Preliminary costs and sources of O&M funds, e.g., general fund, self-supporting, endowment, etc.?

Effect on existing programs/operations if O&M support comes from general fund?  

6.      Identification of any compelling external forces that justify approval
         of this capital project:

Federal and/or state mandate?

Compliance with health/safety/welfare laws?

Federal/foundation grant or other external funding opportunities?

State policy direction consistent with institutional mission?  

7.      Amount and intended sources of future capital renewal funding to
         be included when the project budget is submitted for approval.