13. Facilities: Acquisition, Disposal, Improvement and Use

13.1. Acquisition, Disposal, Improvement

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13.1.4. Physical Facilities Improvements

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Effective Date: 8-3-64

Revision Date:



The broad term of Physical Facilities Improvements is separated into four categories for purposes of planning, financing and accomplishment. 

         1. Capital Construction

         2. Remodeling Maintenance

         3. Special Maintenance

         4. Routine Maintenance

Specific policies and procedures apply to each of these categories 



Self-Liquidating Projects 

Self-liquidating structures are defined as those constructed with funds raised through the use a debt instrument and which are expected to generate revenues to amortize the loan. Those structures or projects constructed with funds derived from gifts, grants or with institutional sources also are considered to be self- liquidating projects. Self-liquidating projects mayor may not be self-supporting. 

Self-Supporting Facilities 

In accounting for operations, self-supporting describes a function or activity where revenue and fees are expected to cover all direct and indirect costs without additional transfer of general fund money. 



Capital construction consists of those projects which provide totally new facilities on the campus, which materially alter the use of a facility, or construct a major addition to a facility; cost of a Capital construction project shall exceed $75,000; they are financed by capital provided by the state or federal government, or from bond proceeds; and they require professional and technical services in the planning stages and inspection during the course of construction. 

All new self-liquidating projects to be constructed with borrows funds, gifts, grants or institutional sources, and any expenditure in a self-liquidating project which will increase or create a capital value and change the present use and method of financing, are considered to be capital construction.  Projects in this category must be reviewed by the Joint Capital Outlay Subcommittee.

The Executive Capital Outlay Project Committee shall review and recommend to the president the priority of projects, the plans and the method of financing for his or her review and recommendation to the Board of Regents.

Construction contracts are awarded by the Board of Regents after any necessary approvals by the state of Michigan.

A schedule of anticipated payments will be prepared and become a part of each construction contract. Each request for payment from a contractor is to be reviewed and approved by the architect/engineer, the Physical Plant administrator, and the vice-president for business and finance prior to payment.  

Equipment which is affixed to the construction is purchased and in-stalled by the contractor and is capitalized as "Buildings".  

Movable equipment is procured in accordance with, purchasing policies and procedures, and is capitalized as "Equipment". Payment of invoices is made in conformance with accounting procedures. 



Special maintenance consists of those projects intended to restore a facility to its former state without changing the purpose or program for which it was designated. 

Funds to support special maintenance, which are estimated to cost between $25,000 and $75,000, shall be appropriated in the capital outlay bill in a lump sum. A list of such projects will be submitted annually to the Michigan director of the Bureau of Management and Budget with the regular capital outlay request. Projects in this category costing less than $25,000 are financed from the appropriate operations budget. 

Remodeling consists of those projects costing between $25,000 and $75,000 which alter the structure by increasing its value or changing its use. 

Funds for remodeling projects are appropriated in the capital outlay bill either in lump sum or line item. 

Programs for special maintenance and remodeling projects are developed cooperatively with the Physical Plant professional staff and the using department(s}. Plans are prepared by the professional staff and approved by the Executive Capital Outlay Project Planning Committee; inspection of construction performance is supervised by the Physical Plant staff. 

Bids for special maintenance and remodeling projects will be ob- tained from the Physical Plant and from independent contractors in conformance with purchasing policies and procedures. Bids are reviewed by the Purchasing Committee and a recommendation of the successful bidder made to the vice-president for business and finance. Approval of the successful bidder will be made by the vice-president for business and finance. 

Invoices from the contractor are approved by the Physical Plant administrator prior to payment with final approval by the vice- president for business and finance. 

A special maintenance and remodeling or additions project, costing in excess of $25,000, consists of the sum total of all contracts or separate work orders issued for labor, material, furnishings and equipment related to a certain designated project to complete the total project. 

Exceptions to the above are made for emergency situations. An emergency is defined as a situation where the delay of needed repairs or construction for the amount of time necessary to accomplish the bidding and awarding process might cause danger to life or property or conflict with normal operations of the University, as determined by the vice-president for business and finance. 

Costs of both special maintenance and of remodeling projects, whether the work is accomplished by the Physical Plant Department or by an independent contractor, are capitalized as an addition to the original cost of the facility. 



Routine maintenance is the service performed by the Physical Plant staff to preserve a part or all of a facility from failure or decline or to return a facility to its original value without changing the purpose or program for which it was designed. 

Cost of routine maintenance is a part of the operating budget for the facility. 

Plans, when necessary, are drawn by the Physical Plant professional staff after consultation with the user department(s), and as approved by the Physical Plant administrator.

The need, priority, plans and cost estimates for routine maintenance projects which will cost less than $5,000 are approved by the Physical Plant administrator and submitted to the Executive Capital Outlay Project Planning Committee for its information. Those projects which exceed a cost of $5,000 are reviewed and approved by the EXCOPP Committee. 

Maintenance projects costing $25,000 or more are classified as special maintenance projects. 

Materials and equipment are procured in accordance with purchasing policies and procedures, and invoices are paid through normal accounting procedures. 

A routine maintenance project is defined as a planned project making use of one or more maintenance departments, and with a total project cost of less than $25,000. 


Authority for Creation and Revision

Minutes of the Board of Regents, August 3, 1964; para. .102M; .103M; .104M; .105M; .106M; .107M; .108M; .109M; .110M; .111M; .112M; .113M.