| PRESENTED BY: | Beth Bilson, Chair, Planning Committee |
| DATE OF MEETING: | June 16. 2005 |
| SUBJECT: | Approval of Council's Role in Capital Planning |
| DECISION REQUESTED: | That Council approve the advisory role of Council in the consideration of major capital projects as outlined in the Major Project Planning Process attached. |
SUMMARY OF PROPOSAL:
In January of 2004, a joint subcommittee of the Planning and Budget Committees of Council was formed to consider the role of Council with respect to Capital Planning. In accordance with the University Act whereby Council is given the authority to "review the physical and budgetary plans for the university and make recommendations respecting those matters to the president or the board;" 1995, c.U-6.1, s.61(1)(n).
The attached Subcommittee Report on Construction Planning outlines the advisory role of Council in this regard.
RATIONALE:
The main objective of the process is to ensure there is appropriate academic consultation early on in the consideration of capital projects. The Major Project Planning Process provides a process that is transparent, responsive, and provides for timely consideration of major capital projects. Major capital projects are defined as those projects estimated to cost $500,000 or more.
IMPACT AND RELATIONSHIPS:
The process envisioned is a dynamic process. Council should always be apprised of projects being considered and appraised, with specific points of intersection for Council's consideration at stages one and three of the proposed process. Throughout, the process is envisaged as one whereby there is a mutual exchange of information amongst the parties involved in assessing major capital projects.
COMMITTEE COMMENTS AND RECOMMENDATION:
The role of Council with respect to major capital projects is to receive information and provide advice. It is important to clarify that Council is being asked only to approve within the Major Project Planning Process (Appendix 2) the role of and manner in which Council provides advice on major capital projects. The Major Project Planning Process has been approved by PCIP and minor changes may occur in the document and associated templates over time without requiring the approval of Council.
Final approval of major capital projects lies within the authority of the Board of Governors as outlined in the Board Governance Model.
FURTHER ACTION REQUIRED FOLLOWING BOARD/COMMITTEE DECISION:
The Director, Integrated Facilities Planning will provide semi-annual reports to the Budget and Planning Committees of all major capital projects under consideration.
ATTACHMENTS:
Report of the Subcommittee on Construction Planning (with appendices)
Members:
Lou Qualtiere, Chair
Glen Beck
Joan Sawatzky
Ramji Khandelwal
Eric Howe
Barrie Dubray
Bryan Bilokreli
Sandra Calver, Secretary
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Planning Committee of Council |
JOINT SUBCOMMITTEE ON CONSTRUCTION PLANNING:
SUBMISSION TO THE PLANNING AND BUDGET COMMITTEES ON COUNCIL'S ROLE IN CAPITAL PLANNING
With the adoption of a university-wide planning process and the reorganization of Council's committees, the Capital Planning Committee was dissolved in 2003 by Council, and its mandate given to the Budget and Planning Committees. To ensure that major projects are closely linked to academic and strategic priorities, the Integrated Plan proposed a new governance model to coordinate the involvement of Facilities Management Division, the Integrated Planning Office, PCIP, and Council. Accordingly, a joint subcommittee of the Planning and Budget Committees-the Joint Subcommittee on Construction Planning-was formed in January 2004, to consider the manner in which Council should review and provide advice on the academic implications of major capital projects.
Background
The University of Saskatchewan Integrated Plan 2003-07 affirms that "Council input into the institutional process for establishing priorities for major capital projects is essential." Although the University Act states the Board of Governors ".. is responsible for overseeing and directing all matters respecting the management, administration and control of the university's property, revenues and financial affairs, …" 1995, c.U-6.1, s.48, within the Act, Council is given the authority to "review the physical and budgetary plans for the university and make recommendations respecting those matters to the president or the board;" 1995, c.U-6.1, s.61(1)(n).
This document articulates Council's interest in capital planning and sets out instrumentation and process to give expression to that interest. It builds upon a previous document approved by Council in 2001: "Major Capital Development Building Priorities - Methodology and Process" (Appendix Four).
That report concluded that the institution required "… a considered, responsive, and transparent process, consistent with institutional priorities and values, yet cognizant of the wider context for decision-making" (p. 10). The Sub-Committee accepts the general principles enunciated in that Report, and has interpreted its mandate as one of how to give expression to those principles in the planning process. An important part of that mandate is to identify the role of Council in the decision-making process. This document is an attempt to describe the essential elements by which Council will be involved to ensure capital projects are consistent with academic endeavours.
The 2001 Report stresses the importance of judging capital projects in accordance with the institution's academic priorities. In fact, it states, "the single recurring theme among the CPC's [Capital Planning Committee's] of the 1990's was the absence of an academic plan or academic priorities that would serve as a major input into the establishment of priorities" (p.3). The 2001 Report envisaged Planning Committee as filling that role. However, since that time the institution has undergone a major Integrated Planning exercise, which has generated an infrastructure of documents that identified strategic goals and directions of the institution. The task now confronting Council and its committees is to evaluate projects in the context of their interpretation of the strategic directions documents. These interpretations themselves are the subject of constructive dialogue and debate, and impact upon planning considerations, such as the rationale for the project, consequences of not undertaking the project, the planning parameters that will impact the size and scope of the project, and the overall fit with the integrated and strategic directions of the University. The essential principle, in the Sub-Committee's view, is that the process must be transparent so as to provide for, indeed invite, that dialogue. This principle informs the design of the process being put forward.
In calling for transparency and openness in respect of all projects, the Sub-committee referred to the 2001 Report and its statement of the key principles underlying capital planning.
The Council-approved 2001 Report articulated four drivers of capital projects, that is, sources of initiative for such projects.
The first area was designated as 'institutional' but might also be considered as the 'academy,' as it centres upon academic programs, enrolment issues, faculty complement issues, academic quality issues, and so forth. Clearly, in respect of projects falling into this category, there can be no understating of the importance of Council's collegial judgments. In the process the Sub-Committee envisages all such projects would elicit the full and considered participation of Council and its committees.
The second category of projects was those arising from 'external opportunities.' This category included Federal and Provincial initiatives and financial opportunities originating in the private sector. To the extent that these opportunities are a sub-set of the types of projects identified in category one, Council's extensive participation is essential. It is recognized that there may be a delicate phase when such projects are first being explored, but there is no doubt about the importance of Council involvement.
The third category was 'Life, Safety and Physical Stewardship', which includes health, safety and environmental concerns. The 2001 Report identified this area as "having precedence and being of the highest priority" (p. 6). Since that time, of course, the institution has engaged in a thorough process of risk assessment and risk management. A central feature of this is that a risk free world is seldom, if ever, attainable. Clearly, the evaluation of costs and benefits of risk management involves considerable expertise and analyses. Council's role in respect of such projects is perhaps in the form of an honest broker, providing an opportunity for information exchange.
The fourth category of project was entitled 'functionality'. In this case projects targeted at space deficiencies and adaptations of existing facilities were identified. Again to the extent that such projects overlap with the first category, Council would have a significant interest.
Another concern articulated by the 2001 Report was that the effects of a capital project on the operating budget be fully identified and assessed. Indeed, the Report used the word "imperative" when discussing this issue. The Sub-Committee thoroughly endorses this principle, and the instrumentation for decision-making includes explicit requirements in this respect. Clearly Council's committees must remain vigilant in their participation in the process to ensure that these design principles are fulfilled.
Process
The 2001 Council Report urged that "All projects should thus be submitted to the same scrutiny and tests." The Sub-Committee agrees with this general principle. However, it would be imprudent to put projects of trivial magnitude through the same arduous process required of large-scale capital projects. The Board of Governors has determined that a threshold of $500,000 be used, with capital projects exceeding $500,000 requiring Board approval, and as stipulated in the University Act (c.U-6.1, s.92(b) further requiring the approval of the Lieutenant Governor in Council (Appendix Five). The process advanced here (Appendix One and Two) uses the same threshold, with the definition of major capital projects expanded to include construction and renovation of buildings, major computer software systems, major equipment purchases, infrastructure projects, and all major acquisitions that have a value greater than $500,000. The proposed process is designed to provide input from Council at the first and subsequent stages of review, and to ensure that full and transparent consultations occur beyond the level of preoccupation with small-scale funding allocations.
In designing the process the Sub-Committee was mindful of the elements which the 2001 Report identified as critical, including:
The process envisaged by the Sub-Committee involves dynamic prioritization. That is, at various stages through the process "go/no go" decisions are made, based upon the evidence available at that stage. At any given time, there will be a set of "contestable priorities", that is, projects that the University has an interest in advancing.
At stage one, or the "project request" stage, a planning brief which outlines the project concept and a brief description of capital and operating funding implications brings the project into awareness. The question at this preliminary stage is whether or not the project should proceed to stage two to be more fully developed. At stage three, the application of resources from stage two results in a proposal that is subjected to more rigorous decision-making and more extensive decision criteria.
At each stage, an assessment is made as to the viability of the project. This process evolves right up to, and after, the call for tenders. As any number of factors can impact upon the process, including external opportunities of an opportunistic nature, the temptation to characterize the process as one where Council might construct and maintain a list of immutable priorities should be resisted. Priorities shift with circumstances. However, Council should always be apprised of projects being considered and appraised during this planning stage, with specific points of intersection for Council's consideration at stages one and three of the proposed process.
Throughout, the process is envisaged as one whereby there is a mutual exchange of information amongst the parties involved in assessing projects. In addition, the process provides for a semi-annual report on the status of all major capital projects under consideration from the Director, Integrated Facilities Planning to the Budget and Planning Committees, and thereby to Council.
Given the wide definition of "capital projects" the Sub-Committee contemplated the issue of 'scrutiny and tests'. The Sub-Committee decided that informational requirements and implicit criteria differed between potential projects.
Capital planning was seen as falling into three broad domains-(1) Capital Construction and Renovations; (2) Information and Communications Technology (ICT); and (3) Equipment. Accordingly, the Sub-Committee agreed that three variants of decision instrumentation would be necessary to serve the broad definition within the three categories, as outlined in the attached "Major Project Request" templates (Appendix Three). The templates address the differing information needs and criteria for assessment for each of the three categories. In constructing the templates, consideration was given to the need firstly, for the forms to draw out all of the information necessary for consideration of the project, and secondly, through the nature of the information requested, to point to the implicit criteria by which projects will be evaluated.
Summary
The Sub-Committee recognizes that no process and no instrumentation can fully substitute for diligence in decision-making. However, by providing a framework the various constituencies can be alerted to the range of information and the range of issues that must be considered. In addition, the framework can service the desire for inclusiveness and transparency. The Sub-Committee believes that the process outlined herein goes a considerable distance to achieving those goals.
Appendices Attached
1. Graphic Representation of Major Project Planning Process
2. Major Project Planning Process Brief
3. Instrumentation -- Templates: A. Capital Construction and Renovations; B. ICT Projects; C Equipment
4. Major Capital Development Building Priorities - Methodology and Process (2001)
5. Board of Governors: Summary of Board FYI, Board I and Board II Approvals
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