Essential Facility Project Terms for School Leaders
Embarking on a facility project can be complex, especially for schools balancing mission-driven work with real estate and construction details. Familiarity with these terms empowers leaders to make informed decisions about what can be managed internally and when to engage outside experts for support. This glossary is organized by project phase to help you find what you need quickly.
Finance terms
| Term | Definition |
|---|---|
| Appraisal | An estimate of a property's value, critical for obtaining loans. Can complicate affordable debt access for nonprofits. |
| Capital Expenditure (CapEx) | Funds used to acquire, upgrade, or maintain physical assets that provide value for more than one year. |
| Capital Improvement | Enhancements that add long-term value to a facility, such as a new roof or HVAC system. |
| Debt Service Coverage Ratio (DSCR) | A measure of how well your school can cover annual debt payments with income. Formula: Net Operating Income / Debt Payments. Target: 1.15+ at full enrollment. |
| Depreciation | The loss in value of a facility due to physical wear and functional aging. |
| Draw Schedule | A plan detailing payment milestones for construction progress. Payments are released as work is completed and verified. |
| Escrow | A third party holds funds or documents until agreement terms are met, often used for construction payouts. |
| Hard Costs | Direct "brick and mortar" expenses such as lumber, drywall, labor, and materials. |
| Maximum Annual Debt Service (MADS) | The highest annual debt payment (principal + interest) over the life of a loan. Aim for less than 15% of total revenue. |
| Operational Expenditure (OpEx) | Day-to-day expenses for facility operations that affect the current year's budget: utilities, janitorial, routine repairs. |
| Operating Reserve | Funds set aside for unexpected operating or maintenance costs. |
| Soft Costs | Non-construction expenses like architectural drawings, legal fees, appraisals, and environmental reports. |
Pre-construction terms
| Term | Definition |
|---|---|
| ALTA Survey | A detailed boundary survey outlining property boundaries, easements, encroachments, rights-of-way, and other elements affecting ownership and use. |
| Environmental Remediation | Clean-up of contaminants before construction begins. Required when ESA identifies contamination. |
| Environmental Site Assessment (ESA) | An assessment of environmental risks. Phase I reviews records; Phase II involves soil, water, or air sampling to confirm and quantify risks. |
| Feasibility Study | Analysis to determine if a project meets organizational objectives, including site viability, cost estimates, and timeline. |
| Flood Zone | Determination of whether a property lies within a flood-prone area, affecting insurance and construction requirements. |
| Geotechnical Assessment (GeoTech) | Evaluation of soil stability and suitability for construction. |
| Owner's Representative | A hired expert who manages the construction process on behalf of the school, ensuring the school's interests are met. |
| Predevelopment | Initial phase activities including needs assessments, hiring a project team, and site feasibility analysis. |
| Site Search | A real estate-led process to find suitable properties based on organizational criteria (size, location, budget, zoning). |
| Space Plan | A plan based on school programming that outlines building specifications for full enrollment. |
| Title Search | A review of public records to confirm legal ownership and identify liens, encumbrances, or restrictions. |
| Triple Net Lease (NNN) | A lease where the tenant pays base rent plus three categories of operating expenses: property taxes, insurance, and Common Area Maintenance (CAM). Gross Rent = Base Rent + Operating Expenses. |
| Utilities Assessment | Evaluation of existing utility connections (water, electricity, sewer) to determine if they support the intended use. |
| Zoning Analysis | A review of local zoning regulations to determine whether the property's intended use as a school is permitted. |
Construction terms
| Term | Definition |
|---|---|
| Building Envelope | Components that separate the interior from the exterior: roof, windows, exterior walls, and foundation. |
| Certificate of Occupancy (CO) | A certificate confirming a building is fit for its intended use, issued after inspections. Required before students can occupy the space. |
| Change Order | Authorization for changes to the original construction scope, potentially impacting cost and timeline. |
| Clear Height | The distance from the floor to the lowest hanging ceiling member. Important for gyms, cafeterias, and multi-purpose rooms. |
| Design-Bid-Build | Sequential process: design, then bid, then construct. Pros: competitive pricing, full control over design. Cons: longer timeline, potential for change orders. |
| Design-Build | Single contract for design and construction. Pros: faster timeline, single point of responsibility. Cons: less control over design details, potential cost premium. |
| E-Occupancy (Education Occupancy) | IBC Group E classification for buildings used for K-12 educational purposes by six or more people for 4+ hours per day. Determines design and safety requirements. |
| Egress | An unobstructed path to exit a building. Schools require multiple egress routes per code. |
| Furnishings, Fixtures & Equipment (FF&E) | Non-permanent items like desks, chairs, and technology. Budget separately from construction costs. |
| Leasehold Improvements | Custom renovations to leased spaces, funded by either the tenant or landlord through a TI allowance. |
| MEP (Mechanical, Electrical, Plumbing) | The technical systems that make a building habitable. Major cost driver in school build-outs. |
| Occupant Load | The total number of persons that may occupy a building or portion thereof at any one time, determined by code. |
| Project/Construction Management (PMCM) | A construction manager who consults during design and manages the project through receipt of the Certificate of Occupancy. |
| Punch List | A document listing work still needed to complete a construction project. Reviewed before final payment and CO. |
Use SchoolStack Space to apply these concepts as you calculate space needs, research sites, and analyze leases.
Start Planning Your FacilityFrequently asked questions
What is E-Occupancy for a school building?
E-Occupancy (Education Occupancy) is the IBC Group E classification for buildings used for K-12 educational purposes by six or more people for four or more hours per day. It includes schools, preschools, and some daycares. This classification determines design requirements, safety measures, and exit configurations.
What is the difference between hard costs and soft costs in school construction?
Hard costs are direct construction expenses like lumber, drywall, labor, and materials. Soft costs are non-construction expenses like architectural drawings, legal fees, appraisals, surveys, and environmental reports. Together they make up the total project cost.
What is a Certificate of Occupancy and why does a school need one?
A Certificate of Occupancy (CO) is an official document confirming that a building is fit for its intended use, issued after inspections verify compliance with building codes. A school cannot legally occupy a building until the CO is issued. The entire construction timeline is managed toward securing this document.