Capital Development
A capital development project must include many components to ensure that it is practical, feasible, and helps to address a community health center and community needs. Before embarking on a capital project, it is important to ask:
What is the purpose of the project?
How will it better serve the patients and community we serve?
How will it improve our ability to serve our patients and community?
Strategic Planning
A strategic plan is a general plan that demonstrates an organization's direction, and frames decisions on allocating its resources to pursue this direction, including its capital and people. Strategic plans typically have a 3 to 5 year planning horizon and focus on assessing an organization's strengths, weaknesses, opportunities and threats, both internally and externally. A health center capital project must align with the overall strategic plan for the organization and enhance a health center's ability to reach its strategic goals. TACHC can provide references to consultants that can help facilitate Strategic Planning for health centers.
Financial Analysis and Planning
To undergo a major capital project that will expend significant debt and equity resources, a health center must demonstrate that it has undergone detailed financial analysis and planning for the project. To secure debt and equity resources, health centers should develop business plans for planned capital projects. Within the business plan, the health center should discuss its history and operations; describe the analysis of its market; thoroughly explain the planned capital project, including projected costs, projected sources of funds to complete the project, the project budget, the development team and its qualifications, and the project timeframe; and provide a description of current financial operations and projections of financial performance after project completion. TACHC can provide assistance with developing or reviewing financial information and trend data that can be utilized for the health center's financial analysis, and TACHC can review business planning documents to help improve the quality of the product. TACHC can also provide references to organizations that can assist with business planning services.
Funding
Health centers ultimately have two options for funding needed to complete capital projects: debt and equity resources. Health centers have an array of financing options available to them as a community business that can demonstrate significant economic impact. Loans from the Corporation for the Development of Community Health Centers, traditional commercial bank loans, loans from other types of commercial lenders like Community Development Financial Institutions, government loan programs such as the U.S. Department of Agriculture Community Facilities program, creative tax credit financing such as New Markets Tax Credits and Historical Tax Credits, and tax-exempt and taxable bond financing packages are all ways for health centers to secure debt resources. The Bureau of Primary Health Care, many individuals, philanthropic foundations, corporate giving programs, community foundations, and others are available to request equity support in the form of capital development grants. These are just a few of the options that are available for health centers to secure funding for capital projects, and TACHC can refer health centers to lenders that have a history of working with health centers and can also assist in identifying grant resources for capital projects.
Project Planning
Project planning specific to the actual construction includes site selection and the selection of the team that will manage the project, design the new facility or renovations, and complete the construction or renovation.
A member of the health center staff or a consultant should be assigned as the point person for the new capital project, the project manager. This person will have the main responsibility for monitoring progress on the capital project and representing the center's interests when meeting with representatives from the company or companies responsible for the design and construction of the project. Many centers can benefit from hiring a consultant to act as project manager when existing staff are unavailable or unable to perform this key duty.
There are two typical strategies for selection of the organization or organizations that will be responsible for the design of the new facility or renovations and for the construction. Traditionally, health centers have selected architectural firms for the design of new facilities, and with the assistance of the architectural firm, separately selected the general contracting construction firm to build the facility or complete the renovations. Recently, health centers have had the option to employ the services of design-build firms, organizations that have the staff to both develop building designs and complete the construction. Both options have their advantages and disadvantages, so the center must diligently consider all aspects of the different strategies to determine the correct option for its own project.
TACHC can provide referrals to consultants for project management services, and to architectural, construction, and design-build firms that can help health centers with their new facility or renovation projects.