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Operations Manual The University of Iowa

PART V. ADMINISTRATIVE, FINANCIAL, AND FACILITIES POLICIES

CHAPTER 34: POLICY AND GUIDELINES FOR CAPITAL IMPROVEMENT PROJECTS

(President 11/15/66; amended 9/93; 11/07; 2/08; 5/12)

34.1 Definitions
34.2 Approval Process
34.3 Roles in Planning and Oversight
34.4 Steps in Planning and Constructing Improvement Projects
34.5 Total-Cost-of-Ownership Decision Framework
34.6 Capitalization and Reconciliation

34.1 DEFINITION.
A capital improvement project provides for the construction, repair, or improvement of buildings or grounds. This includes new construction, additions, renovations, renewals, repairs, site development, utility services, extensions and plant improvements, parking facilities, roads, fixed equipment installation and similar projects. Capitalization begins with a minimum project budget of $100,000 ($50,000 for UIHC).
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34.2 APPROVAL PROCESS.
Capital improvements are developed in accordance with policies and procedures set by the Board of Regents, State of Iowa, and are accomplished by University administration in consultation with existing committees and facility users. The approval process for capital improvement projects is dependent on the project's budgeted costs:

34.3 ROLES IN PLANNING AND OVERSIGHT.
The responsibility for accomplishing capital improvement s for projects has been delegated by the Board of Regents to the University administration.

34.4 STEPS IN PLANNING AND CONSTRUCTING IMPROVEMENT PROJECTS.
Capital projects require initiation through Facilities Management or University of Iowa Hospitals and Clinics Capital Management. For non-hospital projects, an on-line requisition system is required to be utilized and is available at www.facilities.uiowa.edu/pdc/request-project.html. After initiation, the process is managed by Facilities Management or UIHC Capital Management to assure conformance to Board of Regents and state requirements and to provide design and construction quality assurance.

The following is a description of the major steps in planning and constructing improvement projects as required by the Board of Regents policy (www.regents.iowa.gov/Policies/Chapter%209/Chapter%209.pdf).

34.5 TOTAL-COST-OF-OWNERSHIP DECISION FRAMEWORK.

The University of Iowa employs a broad project decision-making framework based on the total-cost-of-ownership. The total-cost-of-ownership is a composite of financial obligations consisting of the costs for the initial capital design and construction; operations and maintenance; utilities and energy; renewal; and decommissioning or demolition. To take future costs into consideration and aid decision making during the design and construction phases, the University has established the following design standards, policies, and procedures.

34.6 CAPITALIZATION AND RECONCILIATION.
Building, infrastructure and land improvement projects with estimated budgeted cost of $100,000 or greater ($50,000 for UIHC) are considered to be capital projects for accounting and asset valuation purposes. Projects with budgeted cost of less than $100,000 ($50,000 for UIHC) are expensed as the cost is incurred. Projects are ready to be capitalized when they are deemed to be substantially complete by Facilities Management. Substantial completion indicates that the building is ready for occupancy. The Capital Assets Management department will capitalize construction projects three times per year based on information provided by the Business Office Capital Project Accountant, Facilities Management and UIHC.


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Page last updated June 2014 by Office of the Senior Vice President for Finance and Operations