PROJ6002: Waratah Residential Care Facility Project Planning Case

This case study details the project planning and budgeting process for the Waratah Residential Care Facility (WRCF), which aims to expand its services by constructing a new residential facility. The case begins with WRCF identifying the need for strategic initiatives, leading to a plan for a new 150-unit apartment-like facility. The project involves various teams, including Business Development, Construction, Legal, and Marketing, each responsible for specific aspects such as construction, legal compliance, and marketing strategies. The case outlines the project plans presented by the COO, Chief Legal Counsel, and VP of Marketing, including tasks, timelines, predecessors, and budget allocations. Key challenges include managing construction delays due to the pandemic and ensuring compliance with legal and licensing requirements. The project's success hinges on effective coordination, detailed planning, and adherence to the proposed budget and timeline, with a target opening date of May 2023.

PROJ6002 PROJECT PLANNING AND BUDGETING 1
Case Study: Waratah Residential Care Facility
Project Background
Waratah Residential Care Facility (WRCF), an urban residential care facility began to see a
significant demand in the aged care business. The facility is now focusing on increasing
occupancies and care services. In order to get a handle on the future of the organization, the
Board, and the CEO, Mark Cameron called for a major strategic planning effort to take place.
In December 2021, WRCF held a planning retreat to identify future opportunities. The
outcome was that the facility needed to focus its efforts around two major strategic initiatives.
The first, a short-run initiative, was to be more cost-effective in the delivery of care. The second,
a long-run strategy, was to develop new buildings and services that would capitalize on the
existing, highly competent care staff and WRCF’s excellent reputation in the region.
In January 2022, Mark had his Business Development team prepare a rough estimate of the
potential return on investment of a residential care facility. He asked the team to identify different
options for facility construction and the associated costs. The team also did a complete
competitive analysis and examined the options for services to be offered based on WRCF’s
potential population base and catchment area. The Business Development team visited several
facilities across the country. The team also interviewed companies that could oversee the design,
building, and operation of the facility for WRCF. The development team produced a preliminary
business plan based on the recommended structure for the facility, estimated capital expenditure
needs, estimated income from operation of the facility, as well as projected revenues to other
programs resulting from the facility’s population.
The business case was presented at the February 2022 meeting of the Board of Trustees. Mark
Cameron and his team introduced the Board to the concept of opening a new facility. The chosen
facility design was a freestanding apartment-like facility with 150 units. The population would be
approximately 150 to 300 residents, with most being single occupants rather than couples. The
Board was assured that the facility would meet the strategic initiative of a growing business. The
business plan projected an immediate increase in the number of residents. Depending on the
exact size of the apartments and their equipment, Mark estimated that the entire project would
cost $9,275,000 including designated contingencies with $8,500,000 for the facility construction,
$500,000 for the operations, $150,000 for Legal and Licensing and $125,000 for Marketing. That
estimate included the cost of land and furnishings. When up and running, it was estimated that
the net income would range between $10,000 and $15,000 per unit per year. The team estimated
the net cash flow for the entire project to be around $2,250,000 per year if the facility was fully
occupied.
Mark requested the Board to approve the concept and allow his team to prepare a pro forma
plan to the Board for approval. The plan would include a recommended design for the new
apartments as well as all costs of land, construction, furnishings, and staffing. Income estimates
would be included and would be conservatively biased. A timetable would also be included. The
Board conducted several executive sessions, and by the middle of February voted to approve the
concept. They approved the architectural-construction-management firm recommended by the
team, and they requested Mark to proceed with developing a complete project plan. The Board
appointed two Board members to sit on Mark’s planning group. The Board also stated that they
would like a plan that would allow the facility to open by May 2023, as research has shown that
many people find the month the easiest time to find an alternative to independent living
arrangements. The CEO and executive team were now confident that they were ready to launch
the project to plan, build, and open a new residential facility.
A few days later, Mark decided that it was time to set up the team that would take responsibility
for what he called the WRCF project. Mark named the Project Steering Committee and held the
first meeting. He presented his vision for the facility. He told the group that he personally would

PROJ6002 PROJECT PLANNING AND BUDGETING 2
be managing this project. He led a discussion of all the major steps that must be included in the
project plan, and asked each team member to identify the areas for which they would accept
responsibility. The facility’s Construction Project Manager took responsibility for the
construction of the new apartments, and the COO volunteered to oversee the building design, as
well as define the needs for care services, housekeeping, staffing, and policy and procedure
development. The CFO agreed to develop the budgets for each area of the project as well as the
operating budget for the facility. The CFO also agreed to create the payroll and accounting
systems necessary to operate the facility. The IS director accepted responsibility to define and set
up all the telecommunications and information system needs of the facility. The VP of Business
Development agreed to create a preliminary marketing plan, and a communication package for
the community and staff. In addition, she discussed organizing a major ground-breaking event.
Mark told the team that he would develop the management structure for the new facility and
work with in-house counsel to identify all governmental regulations as well as all industry
standards related to the facility’s practices. Mark gave the team two months to come back with
their detailed action plans for their areas of responsibility.
Project Planning
The next steering team meeting will be held March 1, 2022. Mark needs his team members to
work well together at determining the steps and the associated costs of the program. The CFO
will present the program budget first, and then project team members will present their draft
project plans. The project plan to be presented by COO will include the followings:
ID Task Name Duration Predecessors Budget
1 Operational Implementation Plan -
1.1 Develop Management/Organization structure 30 days - -
1.2 Recruit & hire Executive Director 1.4 wks 1.1 3%
1.3 Interior design issues decided (furnishings, etc.) 20 days 1.2
8%
1.4 Determine what was provided with lease and
what was furnished in some units
2 wks 1.3
1.5 Determine budget for interior 10 days 1.3,1.4
1.6 Carpet and wall finish determined 2 wks 1.5
1.7 Furniture and room layout 2 wks 1.5
1.8 Facility and equipment need defined 4 wks 1.7
1.9 Staffing determined 2 wks 1.2 2%
1.10 Identify office space for staff 4 wks 1.7
1.11 Director appointed 4 wks 1.9 -
1.12 Services planning 45 days 1.2
4%1.13 Service programs selected 8 wks 1.12
1.14 Service staffing needs determined 4 wks 1.9,1.12
1.15 Additional equipment needs 4 wks 1.13FS (3wks
before)
13%
1.16 Telecommunications services 45 days 1.8 17%
1.17 Investigate phone service options 45 days 1.8 -
1.18 Certification/Accreditation requirements 42 days 1.11 -
1.19 Approve requirements & timing of applicants 0 days 1.18 -
1.20 Develop operational quality monitoring systems 30 days 1.8 12%
1.21 Develop financial systems (billing, etc.) 6 wks 1.8 4%
1.22 Workforce planning 60 days 1.2
3%1.23 Workforce management recommendations 6 wks 1.22
1.24 Project plan for recruitment developed 2 wks 1.23
1.25 Policies and procedures developed 45 days 1.2
2%1.26 Obtain ‘samples’ of residential care policies&
procedures from other institutions
4 wks 1.25
1.27 Investigate facility laws proposed in other
states/federal
10 wks 1.26
1.28 Technology & information systems identified 15 days 1.2 7%

PROJ6002 PROJECT PLANNING AND BUDGETING 3
1.29 Develop plan for technology access for residents
(TV, Cable, PC ’s)
3 wks 1.28
1.30 Purchase and install software applications for
residents
12 wks 1.29 25%
The Chief Legal Counsel for the facility will present his project plan. Mark has asked him to join
the team when it becomes apparent that there are significant compliance and legal issues
associated with this project.
ID Task Name Duration Predecessors Budget
2 Legal and Licensing Requirements
2.1 Research licensing requirements for residential
care facility
38 days - 7%
2.2 Uniform accessibility standard compliance 2 wks 2.1 5%
2.3 Investigate law firm and outline services 4 wks 2.1 7%
2.4 Prepare project plan for license 2 wks 2.3 12%
2.5 File license-by opening date 0 days 2.4 -
2.6 Curb-cut approval from county (facility access) 53 days 2.1 15%
2.7 Investigate corporate structure for the residential
care facility
115 days 2.3 -
2.8 Determine Board of Trustee membership 3 wks 2.7 -
2.9 Appoint Board of Trustees 4 wks 2.8 -
2.10 Prepare draft Code of Regulation 4 wks 2.9 3%
2.11 Prepare document and filing of governance
structure
12 wks 2.10
15%
2.12 Draft service agreement with for services
provided
4 wks 2.11
2.13 Lease issued 110 days 2.12 20%
2.14 Research Long Term Care insurance requirements 12 wks 8%
2.15 Facility “rules” defined (i.e., smoking, firearms,
pets, financial planning)
4 wks 2.14 -
2.16 Determine changes for residents in occupancy
conditions
6 wks 2.14 -
2.17 Lease template prepared 6 wks 2.14, 2.15,
2.16
-
2.18 Review all marketing materials for compliance 10 days 3.11 8%
The Vice President of Marketing will present her project plan. She and her staff will be
responsible for every step in the plan. She has to work with her staff to determine who does what.
The Marketing VP will be given five months for the marketing plan implementation to be able to
meet the occupancy requirements at start-up. As the team is highly collaborative and well-
experienced, the Marketing VP is confident that, if required, her team could reduce the project
implementation by 25% of the forecasted schedule and save variable costs.
ID Task Name Duration Predecessors Budget
3 Marketing
3.1 Community mailing about construction project 30 days - 5%
3.2 Marketing tasks preparation 16 days 3.1SS (15 days
after)
20%
3.3 Facility volunteers meeting 1 day 3.2
10%3.4 Community groups meeting 4 days 3.2
3.5 Facility staff (all shifts) meeting 3 days 3.2
3.6 Presentation prepared for Speaker’s Bureau 2 days 3.2 3%
3.7 Provide updates to community 0 days 3.4 -
3.8 Inquiry log established 10 days 3.2 -
3.9 Ground breaking ceremony 1 days 3.2 10%
3.10 PR firm contracted 4 wks 3.2 -
3.11 Marketing plan developed 8 wks 3.10 7%
3.12 Determine name and signage for facility 0 days 3.11 -

PROJ6002 PROJECT PLANNING AND BUDGETING 4
3.13 Hire Marketing Director 4 wks 3.11 -
3.14 Marketing plan approval 0 days 3.11,3.13 -
3.15 Implementation of marketing plan-5months
before the facility ready
20 wks 3.14, 4.5SS 45%
As Mark explains that the next job of the group is to complete a final full version of all project
plans and firm up the schedule of the Program, it requires him to revisit all project plans and
ensure that all long-duration activities must be broken down with details of sub-activities as well
as more milestones.
The Construction Project Manager states his concerns as it will his turn to present his broad
project plan for construction of the facility. Due to the current pandemic, there have been
shortages of construction supplies and workforces. These factors may require the construction
project to develop appropriate time and cost contingencies. It is forecasted that, in the worst-case
scenario, the construction may face 30% delay and that can impact on the operational costs of the
project.
ID Task Name Duration Predecessors Budget
4 Construction & Furnishing
4.1 Phase 1 - Foundation & excavation (basement/1st
floor slab)
95 days 2.6, 2.9 20%
4.2 Phase 2 - Structure (steel/framing) 113 days 4.1FS (28
days after)
28%
4.3 Phase 3 - Enclosure (masonry/windows/roof) 134 days 4.2 12%
4.4 Phase 4 - Interiors (drywall/ceiling/flooring/case
goods)
234 days 4.2SS (1 wk
after)
40%
4.5 First 50 apartments readiness to prepare for
occupancy
10 days 4.4FS (1 wk
after)
-
4.6 First 50 apartments ready for residents 8 wks 4.5 -
4.7 Remaining 100 units readiness to prepare for
occupancy
10 days 4.4 -
4.8 Construction complete 0 days 4.7 -
4.9 Building ready for residents 8 wks 4.8 -
Each budget allocation consists of 25% labour cost, 70% materials and equipment and 5% project
administration. The followings are human resources to additionally assist in managing the sub-
projects where budgets are allocated (minimum 4 resources per sub-project except Construction
& Furnishing which requires 6 resources to supervise the assigned tasks). These additional
human resource costs are transferrable between the sub-projects and factored in the budget for
project administration.
Resource Name Resource Type Title Hour Rate ($)
Bob Johnson Engineering Head Engineer 37.20
Sheila Hoskins Engineering Operations Engineer 33.20
Randy Thomas Engineering Structural Engineer 35.70
Stu Egan Management Asset Manager 34.40
Susan Hall Industrial Maintenance Supervisor 20.28
Marty Berg Quality Quality Engineer 25.95
John Green Quality Junior Quality Engineer 20.59
Sally Pittman Accounting & Finance Cost Controller 17.50
Lanny Reid Marketing & Sales Marketing Lead 16.25
Kristin Adams Contracts & Procurement Contract Manager 24.33
Carol Abele Legal Services Business Lawyer 36.35
* You have been delegated by Mark Cameron to complete the project scope statement and related
documents including the required plans (Scope, Quality, Schedule and Cost management Plans)
of the sub-projects. You must include appropriate analysis on the changes to the sub-project
schedules and their impact on the project cost baselines.