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FACILITY PLANNING AND IMPLEMENTATION PROCESS REVIEW REPORT

FACILITY PLANNING AND IMPLEMENTATION PROCESS REVIEW REPORT January 2002 – Final Draft Prepared by: Fred King,
FACILITY PLANNING AND IMPLEMENTATION PROCESS REVIEW REPORT January 2002 – Final Draft Prepared by: Fred King,
FACILITY PLANNING AND IMPLEMENTATION PROCESS REVIEW REPORT January 2002 – Final Draft Prepared by: Fred King,
FACILITY PLANNING AND IMPLEMENTATION PROCESS REVIEW REPORT January 2002 – Final Draft Prepared by: Fred King,

January 2002 – Final Draft

Prepared by:

Fred King, Former Executive Director of Facilities Planning and Construction, University of Alaska, and Former Assistant Vice President for Capital Projects, University of Washington Eric Kruse, Vice President for University Services, University of Minnesota Charles Sturtz, Vice President, Administrative Affairs, University of Maryland

EXECUTIVE SUMMARY

The External Review Team (the Team) for the facility planning and project implementation processes at the University of Alaska has concluded its work and presents the following summary of its recommendations. The full report presents the findings, observations, and recommendations more comprehensively than this summation of the five major topics considered.

1. A System for Capital Planning and Budgeting: To improve the connection between strategic planning and capital budgeting, the Team recommends the development of a consistent and comprehensive framework for campus master plan development and a streamlining of project classifications into a multi-year, multi-phase capital budget.

2. A Project Agreement and Pre-Design Process: To improve discipline in the planning and project development processes, the Team recommends implementation of an early administrative agreement on the purpose of a project and strategies for project funding and implementation and a pre-design process that will better assure project delivery within defined scope and established budget.

3. Campus Staff Assessment: To build upon the capability of existing staff in the planning and project development activity, the Team recommends the reconstitution of the Facilities Council which would be composed of System Office leadership and campus professional staff engaged in facilities work. This initiative should create a new standard of practice to assure consistent processes and procedures across the University of Alaska. These standards will give the UA capital development/ implementation program credibility and will be useful in determining whether appropriate staffing exists at all levels of the organizational structures supporting facilities management.

4. System Office and Board of Regents Oversight of the Capital Program: The Team recommends strengthening the role of the System Office in coordinating the UA capital program. We further recommend several administrative adjustments to Regents policies for project review that will simplify and modify delegated authority for minor projects and streamline Regents review of major projects.

5. Other Observations: Based on experiences nationally and at the campuses of the External Review Team, the Team recommends greater attention be focused on campus aesthetics and alternative contracting methods. Campus appearance is a major factor in student selection decisions. The construction industry has made great progress in recent years to create more flexible, efficient, and partnering relationships to streamline project completion. Also, a review of the means for funding management of the MAU’s capital program appears appropriate.

In conclusion, the Team believes its recommendations will strengthen the facility planning and project implementation processes at the University of Alaska and provide a better basis to demonstrate to the President, the Regents, the state government, and campus officials that effective management of the project planning and delivery processes is occurring throughout the System.

TABLE OF CONTENTS

Introduction

Page 4

A System For Capital Planning And Budgeting

Pages 5-10

Project Agreement and Pre-design Process

Pages 11-18

Campus Staff Assessment

Pages 19-24

System Office and Board of Regents Oversight of the Capital Program

Pages 25-26

Other Observations

Pages 27-29

INTRODUCTION

The University of Alaska (UA) is at a pivotal time in the reevaluation of its current programs and wishes to adopt methodologies that optimize decentralized operations while pursuing best practices through appropriate administrative structure, project development/implementation processes, and project oversight that is balanced between the System Office and the individual campuses. The UA System, through the office of the university president and the vice president for finance, seek to better understand the effectiveness of the university’s capital planning, budgeting, and project execution processes and practices, invited a panel of senior facility and financial program managers from other major American universities to participate in a review of facility planning and implementation processes at UA.

The External Review Team (the Team) consisted of:

Fred King, Former Executive Director of Facilities Planning and Construction, University of Alaska, and Former Assistant Vice President for Capital Projects, University of Washington.

Eric Kruse, Vice President for University Services, University of Minnesota.

Charles Sturtz, Vice President, Administrative Affairs, University of Maryland.

The Team was asked to evaluate UA:

Capital Facility Planning and Programming processes

Capital Facility Budgeting processes

Methodologies used to fund the above described processes

Capital Facility Implementation/Execution processes

Methodologies used for tracking success or providing early warnings for items

needing management attention. Resources available to provide input to the above processes.

Structures of existing University organizations, including the interrelationships between the campuses and their relationship to the Office of the Vice President.

The review effort was conducted from Tuesday October 30, 2001 through Friday November 2, 2001. The schedule included one day of review of the University of Alaska System and University of Alaska Fairbanks campus in Fairbanks; one day at the University of Alaska Anchorage campus; and one day at the University of Alaska Southeast campus in Juneau.

This document constitutes the third draft report of the Team. The report includes a reconnaissance of the “as is” conditions, recommendations for revisions to UA processes and practices to ensure an acceptable level of success of its capital program under the existing framework, and a discussion of what might be changed or added if everything were to be aligned with “best practices”.

I.

A SYSTEM FOR CAPITAL PLANNING AND BUDGETING

The Team was amazed at the magnitude of the capital request for a single year versus the historic average capital appropriation.

Recommendation The University of Alaska should adopt a new approach to capital planning and budgeting with the following features.

A. University Strategic Planning

The Board of Regents policy requires each campus to have in place a facilities master plan. This document and process should be considered the front-end of all that follows in terms of facility, land use, and project planning. The system-wide materials provided to the Team note that each Major Academic Unit (MAU) will have a campus master plan that identifies preferred land uses, circulation features, etc. The policy goes on to request that master plans be revised in response to changed circumstances.

Each campus is in the process of revising its master plan. It is the opinion of the Team that master plan development is fundamentally a process that typically is driven by an institutional strategic plan and campus academic/service plans. Policies are developed that deal first with providing sufficient facilities to achieve the academic/service plan of the campus. This is followed by consideration of the suitability of use of existing facilities to satisfy the programmatic needs. The third component addresses the condition of existing facilities and their building systems. Therefore, a master plan helps predict the investment required in a defined future number of years to satisfy these three elements.

It is the conclusion of the Team that master planning system-wide could be more effective were it conducted in a context of a system-wide strategic plan that included assignment of system-wide initiatives to each campus, the presence of campus specific academic/service plans that define programmatic direction for each campus, and a Board of Regents approved multi-year (typically ten-year) enrollment plan for each campus. These planning elements would provide the components essential to predicting sufficiency and suitability components of the master plans; i.e., FTE faculty, FTE staff, FTE students, etc. The HEGIS classification codes provide a convenient means of tabulating space and they support the application of space allowances to the FTE component. Such items lend a level of objectivity to the prediction of space needs that is readily appreciated by policy officials. With the exception of UAS, the Team could not identify that such fundamentals for master plan development were being used to guide the campus work now underway. In subsequent discussions with provost Reichardt and associate vice chancellor Schedler, the UAF campus master plan process appears to have involvement of the academic community; including a faculty consultative committee. The “UAF-2005 Strategic Plan” and “Academic Development Plan” appear to be significant contributing elements to the development of the UAF Master Plan. Unfortunately, this document was not available to the Team for review at the time of the visit. The Team felt that the MAUs have considerable work to complete viable master plans founded on appropriate system strategic goals.

Recommendation To standardize master plan development system-wide, the System Office, with approval by the Board of Regents, should create a consistent and comprehensive framework to be used in campus master plan development. It is our belief that the interested internal and external public and political communities can better appreciate the direction and rationale for future growth and development of each campus if master planning is done in the context discussed.

B. Using University Strategic Planning to Develop Capital Plans

The annual capital budget request of the university should flow in an orderly and understandable way from broad university strategies and initiatives to the detailed request. The entire planning process should be anchored in a Board of Regents adopted University of Alaska Strategic Plan and Critical Initiatives serving as the foundation for MAU academic/service plans. The MAU academic/service plans should in turn lead to physical campus master plans identifying the facility initiatives necessary to implement the academic/service plan for the campus. From the Campus Master Plan, a Multiple- Year Capital Plan for each MAU should be developed. Projects should only be included in the Multiple-Year Plan when the linkage to the MAU academic/service plan and in turn the Regents Strategic Plan can be demonstrated as described in the “Project Agreement and Pre-design” section below.

The Multiple-Year Capital Project Plan for each MAU would roll into a Multiple-Year Capital Plan for the University of Alaska and from this plan each annual capital budget request would evolve. As long as the University of Alaska works toward implementing a university-wide strategic plan, the Team does not consider independent MAU capital budget requests practical or appropriate.

Recommendation The flow of planning and capital budgeting would therefore be:

UA Regent’s Statewide Strategic Plan and Critical Initiatives MAU Academic Plans Campus Master Plans MAU Six Year Capital Plans UA Six Year Capital Plan UA One Year Capital Budget Request

C.

Multiple Year Capital Plan/Budget

An approved campus master plan provides policy sanction for future project planning. The systematic efforts to satisfy facility sufficiency, suitability, and condition requirements result in the formation of project plans.

Project planning includes project budgeting. The Board of Regents Policy on Facilities appears to confine budgeting concerns to appropriation and expenditure requirements. It is the Team’s observation that the current capital budgeting process is hampered by the absence of a mandated multiple-year, multiple-phase approach to the development of capital budgets. It is also the Team’s opinion that the annual capital budgets should be developed in two groups: one for state funded projects and one for self funded projects.

It is typical for institutions to develop a multiple-year capital budget plan. Frequently, institutions craft ten-year plans to coincide with their master plans and to organize the ramp up of student and program fees necessary to support the longer-term development of auxiliary facilities. The Board of Regents policy appears to sanction unlimited, almost “blue-sky”, requests from each campus. Capital funding requests that appear to bear no relationship to likely funding are used to spill projects over into out-years of the capital budget. We believe this practice has limited value to the planning process which suggests it is more opportunistic than thoughtful in nature and may, in fact, mislead policy officials as to the actual degree of preparedness to undertake such plans. When the elements of scope, cost, schedule, and likelihood of funding are thrown together in this fashion, the current result appears to be an inefficient overall process of capital budgeting.

Recommendation The Board of Regents should revise its Policy on Facilities to establish a Six-Year Capital Budget Plan that reflects the multiple phases of the project planning activity. The six-year cycle includes the request year and five future years. The multi-phases reflect the sequencing over time of the planning, design, and constructing activity to generate a project.

This formal methodology for capital budgeting will demonstrate a commitment to logical, financially responsible project planning. The multiple-year, multiple-phase scheme allows thoughtful development of revenue streams for cash-based or debt-based financing.

The Team is mindful of the university’s concerns about fee levels to support self-funded or auxiliary capital projects. It is our observation that modern auxiliary facilities, maintained in excellent condition are very important predictors for student enrollment. A carefully planned capital budget allows multiple-year development of a fee base necessary to support renewal and creation of auxiliary facilities that are essential to attract and retain quality students. The fee base to support capital needs can be independent of the philosophy related to full funding of operating costs of such facilities.

When these project and budget planning recommendations are added to those we have made, related to the project agreement and pre-design processes, the Team believes that the university will be able to demonstrate to any interested public entity that it has in place a best-in-class project development program.

D. Simplified Project Classifications

For planning and budgeting purposes, the university should limit itself to two classifications of projects – (minor) campus projects and (major) capital projects. Within each category multiple funding sources will likely exist.

Recommendation (Minor) Campus Projects would generally include the current categories of facilities renewal and replacement, deferred maintenance (which should be referred to as deferred renewal 1 ), code compliance projects, equipment renewal and replacement, acquisitions, and minor departmental programmatic remodeling. Campus projects generally would originate from inventories of campus facility conditions, which identify work required to keep the facilities functioning as they were built to or from departmental requests. These projects tend to be comparatively small, somewhat non-technical, and less risky, but are essential to the effective use of a facility by the programs housed therein.

The Team also recommends that the University review its project approval/ implementation processes to establish a more efficient, expedited procedure for authorizing and constructing the “campus projects” component of its capital budgets. Phased funding of campus projects should be discouraged as much as possible from a project delivery efficiency standpoint. If a project is phased funded, future phases of funding should be the top priority before any other new projects are initiated.

(Major) Capital Projects would be new facilities and major renewal, renovation, and remodeling projects. “Major” in this context could mean projects over a certain dollar value such as $1,000,000 requiring a more rigorous development and taking a lengthier course through the university’s capital planning process. Major capital projects originate to implement university strategic and campus academic/service plans, and are framed by the master plan policies.

1 Renewal” is the replacement or reconstruction of a building component when it has lived through its useful life. Useful life is fairly predictable for the various components of a building. “Maintenance” is the servicing of a building component to ensure that it functions effectively during its useful life. Renewal is normally considered a capital investment while maintenance is viewed as an operating budget activity. When maintenance is deferred, the useful life of a component is measurably shortened. Most building aging and deterioration problems result from deferred renewal rather than deferred maintenance. The connotation of each is different with the hint of management neglect implied in deferred maintenance while deferred renewal implies inadequate capital funding for the facilities.

E. Capital Budget Development

The Statewide Office issues the Capital Budget Request Guidelines. MAUs submit a prioritized draft budget request according to criteria established in the system-wide guidelines. A group of MAU and Statewide administrators synthesize a University of Alaska Draft Capital Budget Request prioritized for the full university for approval by the Board of Regents and eventual submittal to the state and legislature. The guidelines are fairly clear and seem to be well understood by the MAU facilities staffs that prepare local capital budget requests. The Team heard, however, that line staff at the UAF and UAA did not understand the final statewide project prioritization, i.e.: there was no explanation by the statewide office of the rational that led to the movement of some MAU projects up or down in the final list of priorities or that placed one MAU’s project higher than an equivalent project from another MAU. Staff have a high personal investment in budgeting success, and if another MAU or state-wide office perceives the relative readiness of a project or relative responsiveness to state needs differently, they need to hear that and why.

Recommendation The Team believes that this lack of understanding and resulting frustration was caused by poor communication primarily between the System Office and the MAUs after the changes were made; poor communication within the MAUs on the outcome and its importance to the whole university; and to a lesser extent by the MAUs false sense of how their projects fared relative to the Regents prioritization criteria – readiness of a project, relative responsiveness to state need, etc. This should be corrected (fairly easily) in future budget cycles.

F. Capital Project Funding

(Major) Capital Projects should be funded in a progressive series of requests that allow development in an orderly way within the constraints of limited state funds. Funding for a project, which has been in the Six-Year Plan and has risen to a high UA priority, should be requested in three steps beginning three years before construction should start.

First Year: Request funding for Pre-design (1% of the expected budget).

Second Year: Request funding for design of the project including Schematic Design, Design Development, and Construction Documents (7%+/- of the expected budget).

Third (and Final) Year: Request funding to bid and construct the project.

Some institutions have a fourth step in which funding for furnishings and equipment are delayed until the construction is about half completed. This approach requires a stable and dependable political environment that may not exist in Alaska at this time.

Steps in the Life of a Major Project

Step

Activity

Approved by

Year

1

Project proposal is developed by campus

Chancellor

1

2

Project Agreement prepared

System Administration

1

3

Project inserted in UA Six Year Plan

Board of Regents

1

4

Funding for Pre-design requested in capital budget

Board of Regents

1

5

Pre-design funding appropriated

Legislature

2

6

Pre-design study conducted

System/Campus/Consultant

2

7

Pre-design presented to BOR

System Admin./Campus

2

8

BOR issues Project Approval

Board of Regents

2

9

Funding for Design requested in capital budget

Board of Regents

2

10

Design funding appropriated

Legislature

3

11

Project designed

Campus/System/BOR

3

12

Construction funding requested in capital budget

Board of Regents

3

13

Construction funding appropriated

Legislature

4

14

Project bid and construction starts

Campus

4

NOTE: Major projects will work their way up the priorities established in the Six-Year Capital Plan. Pre-design funding for a particular project should not be requested until construction funding can be reasonably expected two years later.

(Minor) Campus Projects should, ideally, be asked for in an annual lump sum request for the university that will allow the UA and its units to prioritize projects on the (Minor) Campus Project lists to best serve the immediate needs of the campuses. Phasing of these projects should be minimized as it adds to cost and lessens efficiency. If the political climate will not allow lump sum requests for these relatively minor and low risk projects, the pre-request prioritization that has occurred in the past may need to continue.

We recognize the volatile, reactive, and micromanagement nature of Alaska’s state and legislative capital budgeting process and expect that the university may be troubled by these proposals. We understand that such careful planning may not be particularly compatible with current legislative practices. Adopting an orderly, long-range approach to capital planning and budgeting is essential to thoughtful management of the university. It may also lead to a more enlightened legislative approach to capital appropriations.

II. PROJECT AGREEMENT AND PRE-DESIGN PROCESS

The Team sensed concern that projects were not well defined from a programmatic, financial, or physical improvement perspective, and agreement between a campus and the System-wide Office may not exist as to what a project is to accomplish. The apparent lack of scope definition, realistic cost estimate, and schedule prior to inclusion in a capital request is a concern. The likely outcome, once funded, is a project where the preliminary scope seems to wander depending upon budget availability.

Recommendation The Team strongly recommends the use of a two-step process that results in a project agreement and pre-design: this will provide discipline to the planning and budgeting process and to ensure that projects stay focused on their original intent and remain achievable within university means.

A Project Agreement is the defining of the academic or service program to be delivered along with funding and implementation strategies for the project. This concept is perceived by the Team to be such a deficiency in the University of Alaska process and so important that it will be described in great detail.

Pre-design is a process for defining a capital project in detail, prior to initiating actual design work. We did not observe this discipline in place at the MAUs. Project Agreement and Pre-design investigation and documentation facilitates informed decision making by answering the following basic questions about each project:

What programmatic (academic, research or service) needs will it serve?

How do those needs relate to the University of Alaska’s institutional strategic priorities, the role the campus plays in delivering that need, and campus academic/service plans?

What options exist for facility improvements to accommodate the programmatic needs?

How much will it cost to build and to operate?

What is the schedule for funding and implementation?

The result is a document that thoroughly describes the proposed project and provides a common understanding by all participants, avoiding uncertainty about program requirements, costs, timing, and expected outcomes.

Preparation of a pre-design study is a collaborative effort of the campus leadership, the college/service unit that is proposing the project, the faculty and staff who will use the facility, the campus Facilities Management staff, and the University of Alaska’s System Office. Professional consultants may be hired to assist in this effort.

A. Purposes

Pre-design documentation provides information that:

Informs decision-makers about the programmatic needs, the relationship of those needs to the capacities defined by either facilities available or the target population of the campus, facility requirements, and cost implications of a proposed project.

Serves as the basis for the Request for Proposals for a design professional of record or a design/build team.

Guides the design professional of record or design/build team throughout the design phases of the project.

Supports the university’s capital budget request.

B. Criteria

A “major” pre-design effort addresses all applicable items listed in the pre-design content

outline below and would be required for projects that are greater than $1,000,000. The University of Alaska System Office should be responsible for the preparation of pre- design studies for projects of this type. As the Team indicated above, preparation of a pre-design study must be a collaborative effort. Professional consultants may be hired to assist in this effort.

A

“minor” pre-design effort to establish the scope, budget, schedule, and financing plan

is

required for campus improvement projects between $100,000 and $1,000,000. These

projects would generally include building and infrastructure renewal projects, code compliance projects, programmatic remodeling, etc. The preparation of these pre-design studies is the responsibility of the campus Facilities Management groups in collaboration with other appropriate groups.

C. Approvals

Administrative approval occurs at two points in the pre-design process.

A. A Project Agreement, which is approval of the academic or service program to be delivered and strategies for funding and implementing the project, is required prior to the evaluation of potential facility solutions. The administration’s approvals of the program are documented by the signatures of the dean or department head proposing the project, the Provost or appropriate vice chancellor, the Chancellor, and the President. A copy of the Project Agreement may be presented to the Board of Regents for information on projects over $1 million. There should be no need for presidential approval of projects less than $1 million so long as they are consistent with a previously approved (by the President) capital plan or capital request.

B. Approval of the pre-design report, which documents the programmatic needs, the relationship of those needs to the capacities as defined by either facilities available or the target population/roles at the campus, facility requirements, costs, schedule, financing, design guidelines, and other issues related to the proposed project, occurs at the completion of the pre-design process. The signatures of the dean or department head proposing the project, the Provost or the appropriate vice chancellor, the Chancellor, the designated System official with appropriate facilities expertise, and the President document approval of the pre-design report. The Pre-design report, including the Design Guidelines, will be presented to the Board of Regents for Project Approval action.

D. Content

The content and organization of a pre-design documentation for capital projects is outlined below. Pre-design documentation provides detailed project information to the University System and Campus administration before any project is included in the annual capital budget.

Not all sections of this outline apply to all projects. A “major” pre-design is required for all projects of more than $1,000,000, while for a “minor” project, only the sections that are relevant to a particular project need to be addressed. The “minor” pre-design documentation may be limited projects of less than $1 million and thus very brief, while the content for a “major” capital project may be extensive. The “minor” pre-design needs to touch on the (*) topics in a briefer manner and may include information in the other areas as appropriate.

1. Statement of Need (*) Brief description of the:

Historical background

Mission and objectives

Instructional, research, public service, and continuing education functions

Statutory requirements and/or other mandates driving the program

Relationship to the University’s strategic plan and campus academic plan

Relationship to the target population and role of the campus

Current facility deficiencies/inadequacies

Planning/decision-making process for determining programmatic needs

Expected outcomes from the capital project

2. Program Analysis Description of current and projected:

Personnel (faculty and staff, percentage of appointment)

Enrollment

Credit hours and weekly contact hours for academic courses

Research activities Results of the space planning audit

Description of the functional requirements of users:

Program activities to be accommodated

Physical and functional requirements

Special equipment needed

Applicable standards

Identification and evaluation of alternatives for addressing needs:

Space reallocation

Remodeling

New construction

Preliminary architectural/engineering program Identification of relocation/swing/surge space needs

3. Program Business/Financial Analysis Documentation of current year and two-year projected revenue and expenses:

Non-sponsored revenues and expenses

Sponsored research revenue and expenses

Tuition generated by the program

Other revenues and expenses

Fundraising feasibility statement from University Foundation or college

Board of Regents approval of fundraising campaign

4. Site Analysis Identification and evaluation of alternative sites:

Master Plan policies and principles

Physical and functional opportunities/constraints

Development cost implications

Identification of infrastructure needs for recommended site:

Utility infrastructure

Technology infrastructure

Access and circulation (pedestrian, service, bicycles)

Parking (handicapped, official/service vehicle, vendor, contract, bicycle) Preliminary development requirements

5. Environmental/Code/Hazardous Material Analysis (*) Identification and evaluation of existing environmental conditions Review of existing building conditions and summary of required code improvements Identification of extraordinary or atypical code requirements Description of special occupant safety requirements

6. Project Cost Analysis (*) Assumptions upon which estimates are based Costs of comparable projects Cost Analysis for budget determination purposes should be provided from two sources:

architectural/engineering cost consultant, and

general contractor Cost estimates for recommended alternative

Construction costs

Relocation and swing/surge space costs

Other project (non-construction) costs

Projected cash flow for funding (based on project schedule) Current year and projected annual facility operating costs

Annual capital depreciation Documentation of cost information Cost management strategies

7. Project Delivery Method (*) Determination of what project delivery method will be utilized for this specific project:

Design-Bid-Build

Design-Build

Construction Management

Job Order Contracting

Other

8. Project Schedule (*) Implementation schedule:

Design Professional or Design-Build Team Selection

Design

Bidding

Construction

Occupancy Funding sequence

9. Community/Neighborhood Impact Assessment Community/neighborhood issues Alternatives considered Neighborhood impacts and proposed mitigation:

Traffic/transportation/parking

Pedestrian access and circulation

Architectural/open space integration

Noise and air pollution

10.

Gender Equity Impact Assessment (intercollegiate athletics projects only) Statement regarding impact of project on University’s Title IX compliance requirements

11. Diagrams/Concept Plans Conceptual diagrams and drawings of potential/recommended solutions in sufficient detail to illustrate critical functional relationships, test the adequacy of the space allocation, and provide a basis for preliminary cost planning.

12. Design Guidelines Master Plan Guidelines Site Guidelines Architectural Design Guidelines

E. Design Guidelines

As the name implies, pre-design precedes project design. During “major” pre-design, only conceptual diagrams and sketches of potential/recommended solutions are prepared in sufficient detail to illustrate critical functional relationships, test the adequacy of the space allocation, and provide a basis for preliminary cost planning. However, guidelines that provide direction for the design of a proposed project are an important component of the pre-design document.

In the University of Minnesota and University of Washington systems, design guidelines are prepared by the university architect and identify critical campus, site, and building design issues that must be addressed during the design phase of the project. These guidelines are discussed with the system and campus administration and presented to the Board of Regents to ensure that they have an opportunity to provide input on the project design prior to initiating the design process. In the University of Maryland system, pre- design activity occurs as a component in the preparation of a Program Statement.

The Team recommends that the Design Guidelines be prepared under the authority of and approved by the designated system official with appropriate facilities experience.

The Design Guidelines template consists of the following items:

1. Master Plan Guidelines The Master Plan Guidelines provide broad “campus contextual” directives for the project and includes the Master Plan Policies and Principles which must be addressed including any variances from the Master Plan.

These guidelines typically address the following:

Efficient utilization of land and facilities,

Image/architectural character,

Open space/landscape

Circulation

2. Site Guidelines The Site Guidelines provide “project specific” directives for the site on which the project will occur. These guidelines typically address the following:

Orientation/focus

Setbacks/landscape treatment

Access/circulation (including serviceability and usability of the same)

Service requirements

3. Architectural Design Guidelines (Exterior and Interior) The Architectural Design Guidelines are also “project specific” and provide directives for the exterior and interior design of the building. These guidelines typically address the following:

Architectural style

Building facades

Building structural system

Building fenestration’s (exterior openings)

Roof system(s)

Detail and ornamentation

Interior elements

Building systems

Environmental issues

As the project moves to implementation, the design professional of record or the design- build team develops schematic plans for the project based upon the pre-design information and the design guidelines contained therein. A reconciliation report should be submitted at each phase of design comparing scope, schedule, and budget of pre-design

to schematic design, schematic design to design development, and design development to

construction documents. Schematic plans, including a variance/reconciliation report for the project at its current stage versus when last seen by the Regents, are reviewed and

approved by the Board of Regents in accordance with the Board of Regents Policies.

A major capital project should have a fully executed pre-design before it is included in

the UA Annual Capital Budget. If funding practices preclude this recommendation, the pre-design phase should be the first phase of a project in the multi-year capital budget.

A “major” pre-design, from our experience, usually costs less than 1% of the project

budget and is a recommended expenditure to ensure realistic budget requests to the legislature and executable projects.

III.CAMPUS STAFF ASSESSMENT

We had the opportunity to spend many hours with the leaders of the campus facilities services organizations along with other staff specifically from the design and construction service groups. It was very clear to us that the people we came in contact with were proud to be a part of the University of Alaska and very dedicated to what they do. These staffs want to do a good job to help their campus be successful. At the campus level the staffs appear to work in a very respectful and collegial manner. At the same time we were concerned with what appeared to be a level of competition and inconsistency between the campuses that may not be healthy. Although the current Facilities Council reportedly has been working to achieve greater consistency throughout the discussions with campus staff, it was apparent to the Team that similar elements of the capital project activity were conducted differently from campus to campus. This is not unusual among institutions that operate as independent colleges and universities. It is somewhat surprising to find these behaviors within a system governance structure where it is important to convey a message of consistency when operating under the direction of a Board of Regents. These inconsistencies seemed to range from the specific means to develop a project definition (predesign); to the selection of professional service contractors or job order contractors; to the degrees of latitude the Facilities Services organization have for project management; to the character of project management information systems, and presentations to the Board of Regents, etc. It became obvious to us that the campus staffs were loyal and dedicated to their campus needs, not necessarily the University of Alaska System or a consistent University of Alaska manner of doing business.

A. Facilities Council

The University of Maryland functions within a system governance structure. Within the University of Maryland System, the eleven campuses and three research centers work with the System Office staff in a loosely configured structure called the “Facilities Moguls”. The System leads this staff work under the supervision of the Vice Chancellor for Administration and Finance. The Facilities Moguls provide advice to the campus Vice President for Administration and Finance through the Vice Chancellor. The purpose of this group of facilities professionals is to serve as a review group for proposed new policies, procedures, and new design/construction processes; as a clearinghouse for best practices related to maintenance activity; as a training forum for new staff; as a place to meet with state agency staff and vent issues that arise between the System and the campuses. The group serves as a self-help mechanism that raises the level of competency throughout the System. In short, the group serves to establish a consistent standard of practice among the institutions so that institution and system officers, Regents, and State officials perceive that the project delivery program is effectively and consistently administered. Different institutions may use different procurement or construction methodologies for similar projects but when a given methodology is used, it is done so consistently across the System. The System Office manages the meetings and the agenda. All participants have an opportunity to request an agenda item for the infrequent meetings of the group.

The University of Minnesota is a little different in this aspect. Staff of the Design and Construction Services (DCS) department who are part of the Minneapolis/St. Paul campus Facilities Management organization have, through the Vice President of University Services, overall system responsibility for the planning, design, and implementation of all major capital improvement projects. The DCS staff works in conjunction with coordinate campus facilities and program staffs to deliver capital improvement projects.

Recommendation The President of the University of Alaska System should direct the Vice President for Finance to formalize and re-empower the “Facilities Council” to serve as a forum to gather the facilities leadership from the three campuses to focus on making project delivery and facilities services more coherent activities throughout the System. The System Office would be responsible for facilitating the Council, involving the Facilities Services department leader from each MAU. The Facilities Council charge should be to develop the University of Alaska’s methodology for doing facilities management, including planning, design, and construction business in a consistent manner. The Council should establish common terms, forms, processes, procedures, and practices that they are committed to and will ensure that their staffs follow. The areas that we suggest they address include:

1. Establish Project Definitions, Criteria, Funding Sources, Etc. Definitions, criteria, funding sources, etc. must be established for (minor) campus and (major) capital projects.

2. Establish Project Agreement Process For both (minor) campus projects and (major) capital projects the academic or service program to be delivered along with strategies for funding and implementation of the project.

3. Establish Pre-design Process What information is required? What constitutes a “good” pre-design? Create two levels of planning – (minor) campus projects and (major) capital projects. A pre- design process is included in this report, but we feel that it should be used as a starting point, not a final formula for how things must be done. The University of Alaska staff needs to establish their own pre-design process to ensure buy-in. There is nothing worse than giving a staff something to work with that they may not believe in.

4. Establish Consistent Space Planning Standards There are several industry groups and state governments with space standards that can be used, again as a starting point. The space planning standard must be established in consultation with academic and service staff leadership to ensure buy-in from the end user.

5.

Establish Consistent Selection Processes & Procedures for Design Professionals, Design-Builders, General contractors, etc.

6. Establish Design and Construction Standards Begin by reviewing what is currently in place. Ask local industry experts along with campus maintenance and operations staff to create the University of Alaska expectations. A process to assess variances from standards must be established and included as a part of the design and construction standards document.

7. Establish the University of Alaska Project Delivery Process The project delivery process must encompass the project from the point of conception through occupancy. This must include roles and responsibilities, accountabilities, expectations, and the internal consultation/review/approval process.

8. Define project delivery methods available for major projects:

Design-bid-build

Design-build

Construction management

Etcetera

9. Establish “Job Order Contracting” Establish how “job order contracting” is going to be done on the (minor) campus projects to achieve greater throughput. This is an important concept since approximately 80%-90% of the projects in total number equates to 10%-20% of the capital dollars. Being able to push the smaller projects through as quickly, efficiently, and effectively as possible is important to ensure staff does not get bogged down with them and can concentrate on the major projects where risk is greater.

10. Assess Staff Knowledge, Skills, and Abilities/Identify Training Needs/Opportunities The training records that were provided to us did not seem to indicate extensive on- going professional development of the design and construction services staff. We feel that on-going professional development is critical to the success of this staff.

11. Investigate Project Management/Reporting Software Software should aid in the entire project delivery process, project tracking and reporting.

12. Establish expectations as to how the Board of Regents material is to be prepared, and presentations to be given.

13. Establish New Business Practices Manual Bring everything together in a new business practices manual for University of Alaska Design and Construction Services, effective for all work on all campuses.

14. Establish Non-Project Facility Matters Determine non-project facility matters to be addressed by the Facility Council, such as, maintenance planning and scheduling software, staff training, etc.

It is important that the System Office and the campus facilities leaders work on the Facilities Council issues together. This will require a significant commitment from all for this to be successful. It is our opinion that in a System governance structure, the Facilities Council will strengthen the credibility of work done by the professional in-house staff.

It is the opinion of the Team that “project peer review” as it is currently done is not an appropriate use of this Council. That activity, if desired, is more appropriately conducted through external review panels. That said, there is considerable value for the system and each campus to learn from each other as to how they are approaching and managing projects, preparing material for a presentation to the Board of Regents, etc. Project Review is discussed later in this report.

B. Organizational Structure

The campuses facilities design and construction staffs have done an admirable job with what they have been provided in resources over the last decade or more. Their experience and expertise generally matches the capital improvement work that has been completed in that time. We question whether they have been sufficiently exposed to the type and complexity of projects the President is considering in the future. Experience cannot only be measured by the number of projects or budget dollar value alone; complexity and project type are also important measures that have to be taken into account when predicting future success.

If the future capital budget that we reviewed is accurate, then again, the 80/20 or 90/10 theory should continue to hold true. By that we mean that the current staff will be able to handle 80%-90% of the number of projects, However, the 10%-20% of the capital resources that account for 80% to 90% of the capital budget will be at risk. This can be improved by having the Facility Council address the issues identified above. It will make the staff more efficient and effective. But, the couple of large, complex projects will probably be difficult for the current staff to plan, control, and oversee without more resources and experienced staff. This does not mean current staff cannot handle or learn to handle these projects as such; they simply need more resources to free them from existing assignments and assistance getting through a few.

Recommendation With existing workloads, the staffing vacancies that exist with the design and construction groups of the facilities organizations represent serious deficiencies. The Team recommends that the university conduct an assessment of these vacancies within the context of campus facilities organizational structures and university staffing policies. The issues that need to be resolved include:

Are the campus facilities groups organized in the most effective and efficient manner based upon their current and future projected workloads?

Are the campus facilities groups staffed with the personnel that have the desired expertise, skills, abilities, and credentials to serve their campuses and the System effectively?

How can the campus facilities groups more effectively share the expertise that is on this staff?

This assessment should establish staff workload and productivity expectations along with identifying the experience, skills, abilities, and professional credentials needed for a successful project delivery group.

The structure where each campus serves as a “service center” for several of the geographically remote sites nearest to them seems to work well. The staffing workload assessment must ensure that this concept is supported appropriately.

This assessment must be done cooperatively between the System Office and the campus staffs. The outcome may not be to staff each campus individually with the myriad of skill sets needed, but to have staff from some campuses assist other campuses or to add staff to the System Office to serve all campuses. The skill set most obviously missing throughout the system is that of planning and architecture, which is why there is a predisposition towards a University Architect/Planner who would be part of the System Office.

The Human Resources function of the University of Alaska must also be included in this assessment process to ensure job descriptions and requirements are appropriate. For example, we were told that as a requirement to be a project manager one must be a registered engineer. While having registered engineers on staff is clearly desirable, this requirement seems to be excessive for a project manager. A construction management background is many times more important for a person in the project manager position. Further, if the requirement is inconsistently applied an inequity across campuses will exist. Additionally, Human Resources must evaluate the compensation available to appropriate staff in these positions. It was pointed out to us several times that recruiting staff has been difficult because University of Alaska salaries are not competitive with the rest of the Alaska market. This issue also requires investigation as a potential staff retention issue.

Finally, if the capital program is going to be expanded both financially and with increased complexity, appropriate resources must be identified and committed to it to ensure its success. With regard to the large, complex projects that the institution will be pursuing in the near future, we recommend that the existing staff be supplemented with people experienced in the planning, design management, construction administration, start up, and operation of the sophisticated high tech facilities that are being considered. This should be used as an opportunity to train and develop your existing staff. This needs to be started by completing a project agreement and “major” pre-design document for the UAF and UAA science projects, and then working through the entire project delivery process for these two major projects. Additionally, due to the complexity of these two projects, the Team believes that a formal commissioning agent should be retained for the UAF and UAA Science Projects. A commissioning agent can provide a peer review of the electrical and mechanical systems design, control start-up and acceptance testing, assist with operational staff training, etc.

C.

Project Review

Recently UA has experimented with a “peer review” process for schematic design documents for major projects. The purpose of this peer review, as we understand it, is to assure the President and the Board of Regents that the design meets certain criteria for performance and quality to permit Board of Regent approval for the project to proceed to the next step.

These review sessions may expose the MAUs to the thoughts of the other campuses, reveal how each campus is approaching a project, and provide an opportunity for others to validate the presenting MAUs perception of appropriate content and adequacy, but the term “peer review” is being misused in this context.

Our discussions with MAU facilities staff indicate several problems with this process:

The criteria for evaluation are not established and the purpose for the review is not well understood.

The skill and knowledge of the review teams assembled from MAU staff is inadequate and the breadth of professional background of those involved is incomplete, and

MAU staff find the effort a serious tax on already stressed schedules and are unable to give the effort the time it needs and deserves to be meaningful.

Members of the Team use peer review regularly. In our experience, however, “peer review” refers to a review of the architectural design team’s work by their peers – other, respected architects, space planners, engineers, etc. who can challenge the design team to a high quality solution using leading edge techniques and technologies.

If the purpose of peer review is for the administration to be able to assure the Board of Regents that the design is professional and appropriate we suggest the review should ascertain that the Schematic Design:

Fulfills the programmatic expectations of the project as defined in the project agreement

Is consistent with the agreed to pre-design document information

Is functionally well conceived

Is technologically appropriate

Is affordable to build, operate, and maintain

Is aesthetically appropriate for the campus and university

From our experience these are the issues regents are most concerned about when asked to approve a capital project.

Recommendation UA needs to establish (via the Facilities Council) criteria and methodologies to have peer reviews completed on appropriate projects.

IV. SYSTEM OFFICE AND BOARD OF REGENTS OVERSIGHT OF THE CAPITAL PROGRAM

The Statewide Office presents capital program issues to the Board of Regents for review and approval. Currently the Board of Regents reviews, in one way or another, all projects costing over $750,000 with full board approval of projects over $2,500,000 at two points in the development of the project. Project approval is granted before a consultant is hired to begin any work on the physical project itself (some exceptions may be permitted) and schematic design approval is granted before a project is allowed to complete design, bidding, and construction.

This report contains a number of recommendations, which if implemented, will make UA management of its capital program more dependable. The Team suggests that the Board of Regents could make the time it devotes to the capital program more effective and useful with a few minor changes to its procedures.

(Major) Capital Projects (over $5,000,000):

To strengthen the concept of a Six-Year UA Capital Plan the review team recommends one additional Board of Regents review and approval step:

A. Project Agreement (which is the first step of the pre-design process) containing program/service information required by Board of Regents Policy (BOR P05.12.05) be presented to the Board of Regents before the project is entered on the University of Alaska’s Six-year Capital Plan.

B. A Pre-design Study should be required on all Major Capital Projects and will become the first step in a three year phased funding request for the project. If the project has changed in a significant way from that described in the Project Agreement, re-approval by the BOR should precede a budget request for a Pre- design Study. The Board of Regents will approve the completed Pre-design Study, including Design Guidelines in the form of a Project Approval.

C. Schematic Design Approval will address the issues outlined above. Several of the review items listed in P05.12.04C are unreasonably technical for a regent to devote time to understanding. The administration should make sure that the project has been subject to careful professional scrutiny and found to be realistic and appropriate and give such assurances to the Board of Regents.

(Mid-Range) Capital Projects ($1,000,000 to $5,000,000) Depending on the nature, complexity and potential for risk, these mid sized projects could be treated like a Major Capital Project as described above, or as a Campus Project as described following.

(Minor) Campus Projects (Under $1,000,000) Applying the 90/10 rule mentioned earlier and recognizing improved project planning and implementation process in the system, BOR efforts to review and approve small, lower risk projects should be kept to a minimum. We suggest that the Board of Regents consider delegating all review and approval authority for projects under $1,000,000 to the President or his designee.

V.

OTHER OBSERVATIONS

A. Campus Aesthetics

The Team observed an attitude toward design quality that caused some concern. As previously noted neither UAF nor UAA have an architect currently on their facilities staff. Further, neither campus has any procedures in place to review design work of A/E consultants to ensure top quality design consistent with an established aesthetic for the campus, giving the impression that architects are trusted by facilities staff to produce the right design for the project with little guidance or professional design oversight/review. As a result, building designs are the product of a series of architectural firms each with their own sense of style and aesthetics. Although sometimes the building designs are good within themselves, they fail to contribute to a sense of campus design continuity and unity

It is well recognized in higher education that the appearance of a campus is a major factor in student decisions to attend a particular institution. There appeared to the review team to be a lack of recognition of this important recruiting tool in the UA system.

There are several approaches to ensuring high quality, coordinated campus design employed by universities:

An external architectural design advisory committee of guest nationally or regionally recognized architects, landscape architects and planners. (The University of Washington uses this technique.)

An internal design advisory committee of staff and specialist from the university community. (The University of Maryland uses this method.)

An internal design advisory committee consisting of facilities staff who are design professionals (The University of Minnesota uses this method.) (The University of Alaska employed this method in the 1980s during a period when the statewide Office of Facilities Planning and Construction had several architects and planners in MAU branch offices).

A Campus Architect/Planner who is a senior staff member.

A contracted campus architectural advisor.

Recommendation The Vice President for Finance should charge the reconstituted Facilities Council to bring forward options and a recommendation as to how UA will ensure greater attention to design quality at the major campuses.

B. Alternative Contracting Methods

All three MAUs take a fairly conservative and traditional approach to public works procurement. This is commonly viewed by the MAUs as resulting in a reluctance of the System Office to support processes not understood by non-construction staff. At the System level this perception results from the MAUs’ failure to invest time in developing industry support for such changes. Each claims that it lacks the staff flexibility to take on any more efforts. The Team believes such efforts will reap substantial improvement in university practices and success. Nationally, considerable change has occurred in public approaches to contracting for design and construction during the last decade. The traditional design/bid/build method is considered by most to be inefficient, inflexible, adversarial and contentious. Approaches used by review team members’ schools to streamline projects and reduce risk are:

Design/Build

General Contractor/Construction Manager (agency)

Construction Manager at risk

Job Order Contracting (UAA is successfully using this technique for small campus projects)

Contractor Prequalification

The Team members could elaborate on the nature and details of these approaches if requested. Most of them are safer, some are faster and all are less likely to end up in litigation than the traditional low-bid method. The review team believes these techniques are all available to the university under Alaska law. Most are used extensively by your neighbors to the south – Washington and Oregon. While legally allowed, there may be significant political liabilities if industry resistance is not managed by the UA. Under the current University of Alaska structure we see little flexibility in staff time or the inclination to address this need.

Recommendation The Facilities Council and specifically the designated UA System official with appropriate facilities experience need to take leadership in working with the AGC, the AIA and other industry stakeholders to prepare the way for the university to take advantage of the benefits of these alternatives to low-bid/high-risk contracting. Concurrently, top facilities officials at each campus should join in a coordinated information/communication effort.

C. Funding Capital Program and Project Management

The Team was unable to conduct a detailed examination of the manner in which capital planning, master planning, and capital budget development activities and project management are funded. There is some evidence, however, that the funding methods and amounts deserve closer examination. We heard from various sources the following:

There are inadequate funds to pay competitive salaries for current and new professional staff.

The amount charged to capital projects for internal management and overhead burden is high and is viewed critically by project beneficiaries. The antidotal information we were given seems to support the idea that current charges against projects are higher than might be seen elsewhere.

Activities which could be charged to operating budgets or general university funding are charged to projects. In other institutions master planning, capital planning, capital budget development activities are not normally charged as part of a project surcharge.

Approaches to funding capital program management differ between the MAUs

Recommendation The UA should conduct or commission a study of capital program management funding practices. The study should develop uniform practices, determine which charges against projects should be based on direct expenses and which on pre established fees, ensure that current charges are appropriate, and identify which program and project management activities could be streamlined to reduce or reallocate management costs.