Skip to Content

Login   Subscribe   Site Index   Contact Us   Google Translate™

NYS Comptroller


The Academy for New York State's Local Officials

Capital Planning and Budgeting: A Tutorial for Local Government Officials

Module 3 - From Plans to Projects

Cost Considerations

The governing board should adopt resolutions authorizing the maximum estimated cost of every capital project at project inception.

Critical to the success of a project is fully understanding what it really costs to complete a building project and planning for any unexpected expenditures beyond the cost of construction. The key to meeting budget goals is to establish a realistic, comprehensive budget that anticipates all costs associated with the project.

Building project costs fall into six basic categories:

  • Land and building acquisition
  • Construction activities
  • Professional services
  • Furniture, fixtures and equipment
  • Cost of ownership
  • Contingencies

As the saying goes, "contingencies happen," so it is important to provide for them. The industry standard is to budget an additional 4 to 5 percent of the estimated construction cost for new construction projects and an additional 10 to 11 percent for renovations.

The governing board is also responsible for overseeing the competitive bidding process.

  Next: Competitive Bidding