Capital plan update from Branden Kelly

The university’s five-year capital planning process is underway and moving towards final approval at the April meeting of the Yale Corporation.

The capital planning process begins in December when we start developing a Q2 forecast for current-year capital spending and funding. In February, we develop an initial five-year capital spending and funding plan. Once an initial draft of the capital plan is created, the plan is reviewed through a series of meetings of the Budget Strategy Group and Budget Advisory Group during February and March. The Budget Advisory Group is comprised of five tenured faculty members in addition to Scott Strobel, provost; Jack Callahan, senior vice president for Operations; Steve Murphy, vice president for Finance; and other senior administrators. The groups review the scope and timing of individual projects and provide feedback, which is incorporated into successive drafts of the capital plan leading to the proposal to the Corporation.

The capital plan is comprised of a spending plan for Central Major Projects (projects on central campus with a total cost of $4 million or greater), along with separate plans for the School of Medicine and West Campus. In addition, there are several capital project “buckets” for areas such as programmatic renovations, capital maintenance renovations, systems and equipment (including ITS capital spending), utilities and acquisitions. The spending of the capital plan is funded by a combination of capital gifts, internal debt, department funding, Capital Allocation, carbon charge funding, and department funding.

Following the approval of the capital plan at the April corporation meeting, the Budget Office team works to integrate the funding decisions made as part of the planning process into the university’s long-range plan and operating budget processes. Updates to the university’s External Interest, Interest and Amortization, and Capital Allocation forecasts are made over the summer by Chris Murphy and me, with support from the LRP team, based on the results of the capital plan. In August, we have a follow-up meeting with the Facilities team to revise our forecast assumptions for any changes made since the capital plan approval. The capital inputs are a major driver of the university’s long-range plan and operating budget.

Many projects in the current capital plan focus on the university’s science initiative. Significant science related projects which will take place in the coming years include the Physical Sciences and Engineering Building, a renovation/addition to Osborn Memorial Lab, and several projects planned to support the School of Engineering & Applied Science on Lower Hillhouse. The university will also begin work on a new Dramatic Arts Building and several large projects for the School of Medicine in the coming years. In addition to the upcoming projects, the university is finishing up work on a new Economics Building at 87 Trumbull Street along with renovation work on Kline Tower, 100 College Street, and Peabody Museum (the museum is scheduled to reopen in early 2024).

The capital plan process is a great example of cross-functional teamwork and collaboration at Yale. As part of the process, I work closely with Karen Gagnon in Facilities and Steve Munzner in the Controller’s Office. Karen and her team provide all of the capital spending forecasts, by project, for all of the Central Major, Medicine and West Campus projects. I work with Steve during the planning process to review capital funding of all major projects in the plan. In addition to my work with Facilities and the Controller’s Office, the capital planning process requires input from many other colleagues across campus in areas such as Development, the Provost Office and business offices within the planning units. The entire process is a true team effort and I appreciate the contributions of all those involved.