Talking Stick - September/October 2013 - 26

FaCilities
should support the campus strategic
plan and should be an integral part of
financial and operational planning.
Additionally, capital planning policies,
guidelines, and practices should
support the most effective use of
limited financial resources and should
reflect the institution’s strategies and
culture.
Good planning will assess trend
data from the current and previous
year to determine the differing
priorities of projects based upon how
immediately critical they are. In many
cases, housing is an auxiliary service
which operates solely on the revenue
generated by room and board. The
housing budget should include a
capital budget line which is 2.5 percent
to 5 percent of the projected revenue
per residence hall. Many of the start-up
costs can be managed via the housing
reserves, but establishing a capital

budget line is a best practice. Funding
sources may vary according to whether
a project is public, public-private,
private, or private-public. For a public
project, the institution issues bonds
to fund the project, works through the
state construction office, and remains
closely involved in the project. For a
public-private project, the institution
and a private agency enter into a
contract; the funding can come from
a university-funded 501c3 or outside
entity. Typically the financing is paid off
to the private funding source based on
revenue generated from the building.
For a private project, the institution
enters into a contract with a private
developer and has little to no control
over the facility. For the private-public
project, funding still comes from
a foundation or private entity, with
the contract stating clearly that the
institution plans to purchase the facility

upon receiving occupancy or after an
agreed period of time.
Critical to any effective capital
asset management program is close
coordination between the physical plant
or facilities departments (responsible
for repairing and maintaining capital
assets) and the financial planning
and management departments
(responsible for establishing and
managing operating and capital
budgets). Establishing a good working
relationship with the facilities
manager/director is critical. They are
the experts on the facilities and can
help determine the cost of renovations,
prepare a deferred maintenance/capital
planning schedule, and provide needed
input for life cycle planning, which
accounts for the life expectancy of
materials, fixtures, and the building’s
infrastructure. Setting aside monies for
cOntInueS

50

ADDRESS CURRENT CHALLENGES.
HARNESS NEW OPPORTUNITIES.

CORT has worked with some of the top institutions to maintain
older facilities and refresh under-utilized common spaces.
Our furniture management solutions:
 Provide ﬂexible overﬂow solutions without capital investment
 Address swing space and renovation needs
 Minimize the impact of ﬂuctuations on university and facilities personnel
 Enhance student living environments
For more information, contact a CORT consultant at
1.888.304.2112 or educationsales@cort.com.

26

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Talking Stick - September/October 2013

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