Society for College and University Planning
Two NACUBO Conference Sessions Reviewed Risks and Returns of Capital Projects
In this brief, "bonus coverage" two NACUBO sessions on capital planning are reviewed:
Enhance Operations and Save Money: Creating Successful Partnerships With the Private Sector: Slippery Rock University used a pubnlic-private partnership to replace a dormitory with residential suites. Lessons learned:
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Carefully define objectives at the outset.
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Consider transferring the risk of building and operations to a third party; this can lead to significant value.
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Work with your private-sector partner to identify best-in-class developers who will compete for a new project, yielding the most innovative design options possible.
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Realize that the level of experience of the team and the personalities of the contractors chosen by the developer can influence project outcomes.
Managing Working Capital Risk:
[T]o dismiss 2008 to 2010 as an aberration of market performance would be a due-diligence mistake. Risks are real and are here to stay, they noted, and failing to recognize the warning flags can take an unfortunate toll on the day-to-day financing of institution operations.Trainor and Wetzel walked attendees through a tiered approach to managing working and long-term capital, offering tips for understanding the relationship between risk and returns, cost and rewards, and liquidity within the context of cash cycles, marketplace options, concentration risks, and organizational objectives.
Labels: Capital Planning, resource and budget planning, NACUBO, Conference, 2010