Managing budgets for LTC building projects | I Advance Senior Care Skip to content Skip to navigation

Managing budgets for LTC building projects

July 9, 2012
by Frank R. Muraca, AIA, LEED AP, CSI
| Reprints
Let program definition and collaboration be your guide in executing a project
Frank R. Muraca, AIA, LEED AP, CSI

When starting a new building project it’s important to understand that the earliest decisions on scope definition can have a profound effect on the budget, schedule and outcome of projects. While ultimate responsibility for putting all the pieces together rests with the owner, no one can expect executive managers of senior environments or even the extended staff to be experienced, highly trained experts in every phase of construction planning and execution.

Identifying a project manager, or owner’s representative, to lead the project team is becoming a vital factor in accomplishing an integrated approach to the LTC building process.


A well-qualified project manager must understand senior environments, be skilled at best practices of design, have solid experience with the construction type being undertaken and communicate well with project participants. In this capacity, the owner’s representative should understand where the most common budgetary problems occur and be ready to offer recommendations as process solutions. An outsourced project manager also must be proficient in construction specifications and establishing overall project budgets for senior developments.

The project manager is the gatekeeper of the schedule, cost control and quality. When it comes to cost, good management of the development process doesn’t just save money; it makes sure that the owner’s dollars are spent well. Quality built environments and programs matching resident and community current and future trend needs should be the goal of any senior organization. 

An early conceptual cost estimate sets a baseline and outlines all the cost implications of the program. Assumptions are established for direct construction costs, general conditions, allowances, building components, escalation factors, contingencies, insurance and bonding requirements and all other indirect costs associated with the project. 

Any development process is multidisciplinary: Balancing strategy, operations, finance, marketing, regulations, design and construction puts the owner in the best possible position to make informed and timely decisions.


Most agree that the best collaboration occurs when all disciplines work directly together. The integrated approach provides clear and direct communication between each team member. Once the right team is in place, it is imperative that the owner ensures that a decision-making structure is in place—how and when the team will meet and how those decisions will be conveyed and relayed to appropriate team members. Without a clear decision-making process, the professionals will not be able to do their jobs well. You need a team that has the authority and expedient timeframe to make educated decisions as planning and building progresses. Early involvement of various team members is crucial in materializing a building project in a cost effective manner.   

In a well-constructed decision-making process, the project manager is the guide and resource for all questions and issues that arise. The project manager assembles key members of the development team to identify major issues; collaborate on solutions, highlighting cost and time differentials; ensure cooperation among all key members and ultimately offers the owner several options, each associated with clear forms, revisions and directions to the team. The project manager is not just a funnel collecting the information, but facilitates a collaborative think-tank solution with the owner’s goals in mind.  


Functional programming of the proposed use can greatly dictate success or pitfalls with any renovation and/or new building project. Consequently, how wisely an eldercare provider organization defines the project scope and how well the team plans ahead will have a significant effect on the success of any construction project.

Considerations for project scope definition include evaluating energy and resource savings along with the life-cycle costs of the building. While first costs need to be in line with the project costs, building maintenance is a key consideration for owners. The initial construction cost accounts for fewer than ten percent of the total cost of owning a building over its useful life span. Sustainable design factors should be evaluated from the onset of planning and construction specifications made to reinforce project objectives, looking toward not only proposed building completion usage but future usage as well. 


Building cost modeling should be run from the onset of design; in this manner, first costs for various systems can be tested.  Direct linkage of design and building through system reviews allows owners to make informed decisions on various systems. The models create a platform to assess lifecycle and energy costs. 


Prior to commencing design efforts, a building program along with the proposed unit count and mix of the development is established and tested with the marketplace. As an owner’s building program is defined, it is measured against how to accomplish construction on an existing campus or green field site.  The planned built environment for senior environments should first and foremost respond to the prospective residents’ needs. The desired continuum of care program is directly linked to the current and future elder care consumer expectations. Those wants are materialized in the buildings which house the residential and care programs.