Capital Project Management

CapitalProjectManagementLast spring, North Dakota Governor Jack Dalrymple signed a bill into law that allocated $110 million in state financing for the newly-created Western Area Water Supply Authority (WAWSA).  The Authority oversees the Western Area Water Supply Project, which will deliver treated drinking water from the Missouri River to multiple communities, rural water users, and industry in northwest North Dakota.  In addition to providing high-quality drinking water, the near-term excess water capacity will be sold for industrial use in the Bakken formation.  The project is being funded by the State Water Commission, State General Fund, and the Bank of North Dakota.

With the creation of WAWSA came the need for a robust Capital Project Management (CPM) program.  As part of the project, AE2S Nexus has been engaged to provide CPM services for the Authority.

On a monthly basis, the Authority’s Board of Directors, and those providing financing for the project, are provided up-to-date details of the project’s status.

Information that is provided includes:

  • Original project cost estimates
  • Current cost estimates as project scope/timing change
  • Current construction, engineering, and general and administrative costs
  • Actual capital costs incurred to date
  • “Best Estimate” of total capital costs for individual project components
  • Comprehensive total “Best Estimate” of the entire project cost at completion
  • Committed capital to date

The benefit of CPM for municipalities, political subdivisions, and other governmental entities is that tracking capital costs for a major project is not a routine event.  It can be very complicated and labor intensive to continuously compile comprehensive financial information from engineers, contractors, legal counsel, and other vendors.  In addition, accounting procedures and controls may not be in place to monitor the project and appropriately allocate project expenses for later capitalization. The process of pulling together all of the information is very time consuming, and for organizations that are already short-staffed or light on resources, CPM can be a daunting task.   The value of CPM for a city or political subdivision can be seen in the following:

  • Significant time savings for finance, engineering, and administrative staff
  • Information sharing with entities for both bank financing and bonding
  • Tax benefits from accurately capitalizing costs
  • Project stakeholders have access to timely and relevant project information
  • Improved decision making based on constantly updated project structure

If your organization is anticipating an upcoming significant capital project, AE2S Nexus can assist you by providing the necessary detailed tracking and reporting of actual and expected costs. CPM tells you where and when your money is being spent, which allows you to make informed decisions throughout the course of major projects.