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Seliger’s Quick Guide to Developing Facility Grant Proposals and Budgets

Developing proposals and budgets for facility grants is fairly easy, even though, as we’ve written before, getting a facility grant is often really hard (but not impossible).

Facility proposals and budgets are usually simple to develop because they contain the same elements. Once the basic needs argument is established–for example, a HRSA Health Infrastructure Investment Program (HIIP) grant will enable the Waconia Community Health Center to expand, increasing the number of patients served–the proposal action steps are:

  • The applicant must demonstrate site control in the form of a title, lease or lease-option. If leased, the term of the lease should be longer than the useful life of the capital improvements. Federal proposals often specify this length of time.
  • Hire an architect or contractor (e.g., design/build).
  • Due to concerns over climate change and sustainability, select an architect, who will design to meet LEED “green building” standards.
  • The architect then goes to the local jurisdiction’s planning department and/or building department counters to understand the land use and zoning constraints on the site, along with required hearings/permits and the anticipated timing.
  • The architect prepares a conceptual site plan for agency review and eventually a second trip the planning/building counters for a reality check.
  • Pre-building permit hearings are scheduled and held, as needed. In some jurisdictions, this may be where cranky, angry local NIMBYs complain.
  • The architect prepares detailed working drawings, based on the conceptual plan (as revised) and applies for a building permit.
  • The building permit is obtained.
  • Construction bids are requested (unless the design/build approach is used).
  • Construction is undertaken. It’s likely that the contractor will request change orders during construction, which will have to be resolved. Periodic city inspections will occur during construction, which may generate additional change orders.
  • Specified equipment is ordered and installed near the end of construction.
  • When construction is nominally complete, a walk-through will be conducted with the contractor and a punch list of remaining items will be developed and addressed.
  • The final city inspection will take place, leading to the issuance of a Certificate of Occupancy.
  • You’re done. Let the services and champagne flow!

In the laundry list above, the most critical, and often overlooked, step is checking with the jurisdiction to make sure you can build what you want to build, as well as the sometimes exhausting interim steps between a good idea and an actual building permit. It’s also essential that these steps be clearly explained in your proposal, with realistic timeframes.

About ten years ago we wrote a HUD Section 202 proposal for senior housing on behalf of a large faith-based organization in a big Midwestern city. Their architect prepared a conceptual plan but failed to fully grasp the steps that would be needed to obtain a building permit. The issue involved consolidating a number of small parcels owned by our client. We wrote the proposal based on the information provided by the architect.

HUD deemed the proposal “fundable” and reserved Section 202 financing of about $3 million for the project. When the HUD regional office back-checked the permitting process described in the proposal, however, it turned out that the project couldn’t be built. Our client lost the grant but perhaps learned a valuable lesson about grant writing for facilities: there’s not much point seeking grants for an infeasible project, no matter how great the need.

To draft your facility proposal, explain the preceding set of bullets in narrative form and following the pattern in the RFP. You should also include the key milestones in a timeline, as we’ve written before. Leave out references to champagne.

Here are the key line items in a facility budget:

  • Plan check and other fees for public hearings, permits, etc. Your architect will be able to figure this out for you.
  • Architectural/engineering (A/E) costs, which are usually about 7% of the estimated total project cost but may vary in your region.
  • General conditions, which includes staging, materials/equipment storage and miscellaneous other costs that facilitate construction activities.
  • Demolition costs and/or site grading / preparation costs.
  • Construction costs, which will probably be about 70% of the total project costs. One way to calculate estimated construction costs is to multiply the total square feet by local construction costs/square foot. This can be tricky: the cost to build a Community Health Center or UPK classrooms is going to be much higher than general office space because of life/safety code requirements.
  • Fixed and moveable equipment.
  • Legal fees.
  • A prudent contingency, which is usually about 10% of the total project costs but higher for renovation projects.