Capital Improvements Process and Oversight
Definition
A capital improvement is defined as durable upgrade, adaptation or enhancement of a property that increases its value. These types of improvements can be a direct result of either the failure of an existing system (replacement), which would be an unplanned capital expenditure (capex) project or an upgrade to the property (value added) which would be considered a planned improvement.
Summary
This procedure ensures streamlined communication and execution of these projects. While Spacious Skies Campgrounds does, in some cases, involve a Project Manager (PM) to oversee exceptionally large projects it is the responsibility of the GM (General Manager) and RM (Regional Manager) to ensure that communication is flowing properly, and projects are completed on-time and at or under budget regardless of PM involvement. Therefore, concise, and timely communication throughout the process is critical.
At no time should any capex projects, including special projects, be ongoing at a property without the GM and RM having direct involvement and the DOO (Director of Operations) and DOF (Director of Finance) being aware.
Communication
It is important that all capex requests and approvals be documented. Therefore, all communication, including, but not exclusively, requests and approvals, must be in the form of email. At no time should Teams Messages, Text Messages, Verbal, or other communication be utilized for decision making purposes.
Planned Capex & Special Projects Communication
The company plans capital improvement initiatives both at the time that a property is purchased and on an ongoing/annual basis.
Capex projects will be mapped out by the GM, RM, DOO, DOF and CEO utilizing the 5-year capex tracker. These schedules may change depending on the property's needs and the development of any issues or emergencies that may arise at the property requiring a capital investment. For planned capital improvements the communication flow is as follows:
Communicating Initial Capex Plans Upon Acquisition
CEO, COO, President and DOF > communicate project, budget, and SoW (Scope of Work) to DOO
DOO > RM (and the Project Manager (PM) if applicable)
RM > GM
Communicating Annual/5-year Capex Plans
GM + RM – Develop Plans annually and adjust when necessary
RM > DOO – Reviews plans with the RM
DOO > COO, CEO, DOF, President for review and approval
NOTE: Once a 5-year capex plan has been approved, no adjustments may be made without the involvement/approval of the RM and DOO.
Unplanned Capex Communication
When an unexpected issue arises that requires us to spend more than $1,000, the GM is to follow the communication flow outlined below.
GM > RM
RM > DOO
DOO > COO, CEO, DOF and President
Developing the Scope of Work (SOW)
The General Manager should work with their Regional Manager and vendors to develop a clearly defined scope of work for the project
Scope of work should include the following
Specifics about the work to be performed
Proposed start date
Proposed completion date
Any applicable requirements i.e., permit etc.
Bidding Process
We require that all capex projects be sent out for bid. All requests should be initiated by the General Manager. The following is the process that should be followed when gathering and submitting estimates for work.
Identify and contact vendors to bid on the project
Schedule on-site meetings with the vendor to assess and then discuss the scope of work
Provide the vendor with a due date for all bids
Bid Selection
The General Manager will review all bids received and determine the following
Ensure there is a clear scope of work in all bids.
Prepare a recommendation for whom should be awarded the work based upon:
Pricing
Start and Completion Dates
Vendor Reputation
Final Approval Process
Once bids have been received and review process is complete the General Manager will submit all bids to their Regional Manager for review and approval using the following process:
All bids are attached to an email
Subject Line: Approval Request - Property Short Name - Project Name
Example: Approval Request - SSSO - Entrance Landscaping Project
Body of Email:
Project Name
Budgeted $$
Estimate #1 - Vendor Name - Cost - ETA Start - ETA Completion
Estimate #2 - Vendor Name - Cost - ETA Start - ETA Completion
Estimate #3 - Vendor Name - Cost - ETA Start - ETA Completion
In House (if in consideration) Cost - ETA Start - ETA Completion
Explain any large variances in estimates (this must be vetted by all parties involved prior to sending up)
Recommendation for whom we should move forward with and why.
Provide information on historical estimates we may have gotten or anything else we need to know.
Attach all quotes to the email.
**Ensure that all estimates contain the same SoW
Regional Manager will review bids and provide approval/recommendations
Request is then forwarded to the DOO with a copy to the Director of Finance.
The DOO will review bids and provide approval if within their threshold.
If the estimate is above DOO’s approval limit, the request will be forwarded to the CEO for final approval.
Vendor Notification and Construction Agreements (if applicable)
Once final approval has been received the following will occur:
Vendor is notified of decision
GM gathers COI and W9 and moves forward with new vendor setup.
GM is responsible to:
Work with HQ to prepare approved construction agreements (when applicable)
Deliver agreements to the vendor, following up to ensure that agreements are returned in a timely manner
Sending fully executed agreement to the vendor
Ensure that invoices for payment are processed and payments are delivered to the vendor in a timely manner
Communicating Change Orders
It is the project managers (GM or PM) responsibility to communicate (via email) any proposed changes to scope or pricing of project through the appropriate channels for approval.
Payment Schedules
All requests for payments must be sent to ap@spaciousskiescampgrounds.com. These requests must include the following:
Invoice clearly indicating the amount due
Deposits and project payments: Will be paid in accordance with the quote or construction agreement
Final Payment will not be delivered until the following have occurred:
Work is completed
Work has been inspected and signed off on by the GM
A Lien Waiver has been provided to us by the contractor
Note: Most contractors will not provide a LW without final payment. Therefore, checks for final payment should be requested sent from A/P to the property for the GM to have on hand.
GM’s will submit requests for Lien Waivers to the COO (Chief Operations Officer) with a copy to their RM.
Communicating Updates
Throughout the course of the project, the expectation is that the GM will provide weekly updates on the project status to their RM’s who will, in turn, provide weekly updates to the DOO, DOF, CEO and President.
Tracking Progress
Live capex projects should be tracked using Microsoft Hub Planner
Project is added to the Property Planner under the capex category
Task should be assigned to everyone involved including the GM and RM
Provide a Start Date – initially this will be the ETA for the project's start and may change.
Provide a completion date – this will be the ETA for project completion and may change
Updated notes must be added as action occurs
Documentation, including estimates, contracts and email approvals must be uploaded and stored within the system.
BEST PRACTICE: ALL CHANGES AND UPDATES MUST BE DOCUMENTED IN REAL TIME