8.3.1 Capital Projects
Formerly Known As Policy Number: 83
This Guide Memo describes Stanford University policy on initiating academic facilities and infrastructure projects under the authority of Land, Buildings,and Real Estate (LBRE), including specific information on the allocation, siting and management of modular buildings, trailers and storage containers on campus. This Guide Memo also addresses University funding of capital projects, including the application of the Stanford Infrastructure Program (SIP) assessment and the General Use Permit (GUP) Entitlement Fee to fund mitigation costs arising from the approval of the December 2000 Community Plan and the General Use Permit.
This policy applies to all University capital projects.
1. Facilities Project Initiation
a. Form 1 Required for Capital Projects
All requests for academic facilities and infrastructure projects on the Stanford University campus, where Stanford occupies or leases buildings off the campus are required to be submitted electronically on a Form 1 prior to the project's start.
The Form 1 is required, but not limited, to the following types of academic projects, regardless of size, cost or funding source. A detailed list of project types requiring a Form 1 is available on the Land, Buildings and Real Estate website.
- New construction, including construction or placement of temporary buildings intended for personnel occupancy
- Building demolitions
- Interior building changes
- Projects that affect building exteriors
- Surge and relocation projects associated with a capital project
- Landscape projects and reconfigurations
- Land use projects
- Projects requiring a jurisdictional permit and plan check. Projects requiring only over-the-counter permits may not require a Form 1
- Projects undertaken and/or funded by Capital Utilities Program (CUP), (GUP) Entitlement Fee Program, Capital Facilities Fund (CFF), Facilities Reserve, and debt
The Form 1 applicability list is not exhaustive but is intended to capture a wide range of activities that are closely monitored by Stanford. In cases where ambiguity exists, with respect to Form 1 applicability and/or capitalization rules, it is the responsibility of the project initiator to seek clarification.
The following types of projects are exempted from the Form 1 process:
- Properties and land designated for income production by the Board of Trustees
- Non-capital and/or Board of Trustee approved capital projects managed by Stanford Health Care and SLAC National Accelerator Laboratory unless University funding or facilities are involved
- Commercial and residential ground leases
- Faculty staff housing rental purchases
- Maintenance projects that do not include a capitalized component, and do not qualify under any of the criteria mentioned above
The Form 1 request process enables Land, Buildings, and Real Estate to:
- Determine whether Board of Trustees approval is applicable
- Evaluate program scope, justification and priority
- Assess and confirm the funding resources that are available (through the Controller's Office)
- Ensure that campus planning, code, architectural and aesthetic considerations are reviewed
- Ensure that Stanford's Project Delivery Process is followed (see Project Delivery Process for detailed information on the process)
- Request a PTA (Project/Task/Award) setup in Oracle allowing contracts and expenditures to commence
The Form 1 process is initiated by authorized local facilities representatives before a project begins, is then approved within the School/Department, and is finally submitted electronically on the Land, Buildings, and Real Estate website. Detailed approval guidelines, at various project cost levels, are outlined in detail on the Form 1 website.
2. Modular Buildings and Trailers
a. New Modulars and Trailers
For reasons of cost effectiveness, sustainability and campus aesthetics, modulars and trailers are generally discouraged as a Stanford University building type. However, there are times when modulars are appropriate for temporary use on campus.
Proposals to install new modulars and trailers need to be submitted using Capital Planning's Space Request Form and approved by the Provost. This form is required prior to initiating the Form 1 process, regardless of modular or trailer size, proposed length of use, purpose, cost, location, or source of funding. The cost and installation of new modulars and trailers generally are the responsibility of the local area.
Siting of all modulars and trailers must be approved by the Stanford University Architect/Planning Office.
Detailed policies on modular buildings and trailers can be found on the Capital Planning website.
3. Storage Containers
Storage containers are freestanding metal boxes used for a variety of stored materials. They are centrally located in the storage container yard and adjacent area on Stock Farm Road. Locating containers in other areas of the campus must be approved in advance by the Stanford University Architect/Planning Office.
Proposals for the installation of new containers and moving existing storage containers need to be submitted on Capital Planning's Space Request Form for approval by the Provost. This form is required prior to initiating the Form 1 process, regardless of container size, cost, proposed length of use or source of funding. The cost and installation of new containers is the responsibility of the local area. Units wishing to relinquish or move containers also must inform Capital Planning in advance. The cost and removal of containers is the responsibility of the local area.
Siting of all storage containers must be approved by the Stanford University Architect/Planning Office.
Detailed policies on storage containers can be found on the Capital Planning website.
4. Stanford Infrastructure Program (SIP) Assessment
The Stanford Infrastructure Program (SIP) consists of campus planning and transportation projects and programs for the improvement and general support of the University's academic community, hospitals, and its physical plant. Program funding is generated by an internal fee levied on monthly expenditures of all academic and hospital capital projects, as described below. The program facilitates the construction of bicycle and pedestrian paths, lighting, outdoor art, campus transit, roads and parking lot infrastructure, connective elements, and other site improvements that directly supports the academic missions of teaching and research and the overall vitality of the institution. This infrastructure will be developed as necessary to improve public safety and service, and to promote conservation in land use and resources.
A 4.6% SIP assessment is applied on all expenditures (excluding fees for SIP, GUP Entitlement, Below Market Rate Housing (BMR), and the Palo Alto Unified School District (PAUSD)) for capital projects (including new buildings, renovations, deferred maintenance and the CUP), regardless of amount, funding or management.
For Stanford Health Care and Welch Road academic tenants in the City of Palo Alto, the SIP assessment is 2.3% on all expenditures (excluding fees for SIP, GUP Entitlement, Below Market Rate Housing (BMR), Palo Alto Union School District (PAUSD), computer hardware and software, medical equipment and furniture, and off-campus capital projects) for capital projects (including new buildings, renovations, deferred maintenance and CUP), regardless of amount, funding or management. The SIP percentage is lower for the aforementioned entities as they are required to provide and fund parking for their properties in the City of Palo Alto (i.e. SIP funds are unavailable in the City of Palo Alto).
No assessments will be taken on SIP-funded or GUP Entitlement Fee funded projects, or software application programs.
b. Project Eligibility
Any academic or auxiliary program may identify a need for a potential SIP project and seek SIP funding by submitting a project request to either the University Architect/Planning & Design office (SIP-C) or the Stanford Transportation office (SIP-T) as appropriate. Each request must represent a project that will provide benefits to more than a single campus user, group, or building and each will be evaluated against the following general criteria:
- Improves the overall quality of the campus environment
- Satisfies a particular academic or auxiliary program need
- Reduces total capital and operating budget expenses
- Fulfills a safety and/or security need
- Relates to and supports campus planning objectives
- Provides a renewal of a deteriorating infrastructure asset(s)
- Responds to governmental agency requirements
c. More information
Detailed guidelines regarding SIP can be found in the Document Library on the LBRE website.
5. General Use Permit (GUP) Entitlement Fee
The GUP Entitlement Fee provides funding for the mitigation of projects and programs (Conditions of Approval) required by Santa Clara County as a result of the December 2000 Community Plan and GUP approval. The projects and programs required include infrastructure and environmental resource studies, a comprehensive water conservation program, transportation demand management, habitat conservation, and consultant monitoring of mitigation compliance. Additionally, GUP Entitlement Fees fund the cost of roadway expansions, new parking, and expanded childcare facilities.
A GUP Entitlement Fee is assessed on increases in School/Department gross square footage on the Stanford campus regardless of total project value. Housing units are required as a component of the GUP and are thus excluded from the GUP Entitlement Fee.
The entitlement fee structure is based upon the present net value of projected mitigation costs, as described above. The fee will be set on a rolling three-year basis consistent with the Capital Plan and may be revised periodically. The forecasted rates for current and future GUP Entitlement Fees can be accessed on the Capital Projects Fees table.
b. Space Audit
Although increases in School/Department square footage typically result from the construction of a new building, a variety of other factors may impact the square footage calculation to derive net incremental program growth. Any project that results in additional square footage will be subject to a space audit to determine the total amount of growth. The audit will consider a combination of space movements, including, but not limited to, space demolitions, vacated and reassigned space, and inherited space.
All space changes are subject to the approval of the Provost.
6. Funding Policy
All capital projects, regardless of total project budget, must have funding in hand or an approved backstopping plan prior to commencing construction. All capital project funding requests are initiated via the Form 1 process. Funding is transferred to an account established by the Controller’s Office. Form 1s may be approved by the Vice President of LBRE, or the Associate Vice President, Land and Buildings Academic Projects and Operations (up to a total project cost of $10 million). If the project was not approved in the Capital Plan and/or GUP square feet, central funding or centrally funded debt are requested, and were not previously allocated, the Form 1 must be routed to the Provost for approval.
a. Capital Projects under $25 million
- Capital projects that have a total capital project cost up to $15 million must obtain Concept and Construction Approval from the Vice President of LBRE.
- Capital projects that have a total capital project up to $25 million must obtain Concept and Construction Approval from the Provost.
- Capital projects presented to the Provost or the Vice President LBRE must have a final Funding Plan prior to the request for Concept Approval, and a final Funding Agreement prior to the request for Construction Approval.
The detailed Capital Project Approval Process and Related Funding Documentation Policy for capital projects less than $25 million can be found in the Document Library on the LBRE website.
b. Capital Projects over $25 million
If any of the following criteria are met, the project must go to the Board of Trustees for approval:
- Construction, renovation or building improvements projects for academic use, on or within University-owned land, that have a financial commitment greater than $25 million;
- are for the creation of new development on a previously undeveloped site;
- or will result in the change in use of an existing site must obtain several levels of approval from the Committee on Land and Buildings of the Board of Trustees.
As documented in the Project Delivery Process, a percentage of the total project budget is transferred to the account by the Controller’s Office at each Board-required approval. Approval levels include Concept, Project, and Construction for building renovations; and Concept/Site, Design, and Construction for renovations, and Concept and Site, Design, and Construction for new buildings. All projects presented to the Committee on Land and Buildings must have an executed Funding Plan prior to the request for Concept Approval, and an executed Funding Agreement no later than the request for Construction Approval.
Infrastructure programs with program funding identified (e.g., the CUP, SIP, GUP Entitlement Fee program) generally do not need separate funding plans and agreements; however, individual projects exceeding $25 million may require approval from the Board of Trustees.
The Funding Plan outlines the benchmarked project budget, the planned funding sources, and the estimated amounts from each funding source; addresses the budget responsibility for finance charges during construction, as well as debt servicing or gift backstopping provisions after construction completion; addresses restrictions on the use of tax-exempt debt; documents O&M impacts and unit responsible, and stipulates if a project is subject to a GUP Entitlement Fee. Funding Plans are subject to revision if the project experiences significant changes in project scope or budget during the design phase.
The Funding Agreement supersedes the Funding Plan when the project returns to the Committee on Land and Buildings of the Board of Trustees for Construction Approval documenting final components listed in the previous paragraph.
The detailed Capital Project Funding Plans and Agreements Policy can be found in the Document Library on the LBRE website.
7. Sources of More Information
- Land and Buildings' website at http://lbre.stanford.edu/
- Land and Buildings' Online Form 1 System
- Capital Planning website, includes Project Delivery Process and Space Request Form
- Administrative Guide Memo 5.2.1: Financing of Purchases