Capital-strapped organizations might be tempted to cut costs when constructing or renovating a building, but as the person overseeing operations once construction is done, the facility manager can help guide smart development decisions by bringing total cost of ownership analyses, or lifecycle costing, to the table, a veteran school facilities chief says.
More than 90% of the cost of a building is incurred after construction is completed, so organizations that focus on keeping construction costs down are risking higher costs later on — a point that the facility manager is best positioned to make, says David Van Hook, director of maintenance and construction at the Bartow County School District in Georgia.
“Only the facility manager is in a position to sell lifecycle costing to management,” Van Hook said last week at the APPA annual conference. APPA is a national association for education facility managers.
Many school districts are cost-sensitive because of their reliance on bond issues and other types of public financing for capital projects, but going with lower-cost options for HVAC and other critical systems to keep construction costs down can end up escalating costs after only a few years of operations, said Van Hook, who’s held facility leadership roles at higher education and K-12 schools over the last 20 years.
For one project he worked on, the school district selected rooftop packaged HVAC units for a 102,000-square foot building at a cost of $504,000, far lower than the $1.9 million chiller-boiler system that he recommended. But over the estimated 50-year life of the building, the cost difference between the two is dramatic: an estimated $21.3 million for the chiller-boiler versus $79.3 million for the rooftop packaged units.
Among other things, the lifespan of the rooftop packaged units is lower, so they’ll likely be replaced four times over 50 years compared to one to two times for the chiller-boiler. They’ll also require more maintenance and have higher average annual energy costs per square foot — $15 versus $3.50 — which over the 50 years comes to a difference of over $1 million.
The facade, flooring, sewer and restrooms are among other building features that can lead to dramatically higher costs down the road depending on the decisions made, he said.
Using brick for the facade, for example, tends to be more expensive than siding upfront, but it’s durable and needs little maintenance over the life of the building, he said. Many schools install their own septic systems, but connecting to the local sewer system, even if it means running an extensive pipe system, is less expensive over the long-term because maintenance costs can be dramatically lower.
For restrooms, commercial fixtures are more durable than those intended for residential use, but they cost more.
Preparing total cost-of-ownership analyses for major components of a construction project is time consuming and labor intensive, Van Hook said. For an HVAC unit, for example, it requires inputting estimates for the purchase cost, annual labor hours for maintenance at the average hourly labor rate, annual maintenance costs, the number of years of expected life, the number of times it’s expected to need replacing and the average annual energy cost per square foot multiplied by the number of years of the building’s expected life.
But bringing those numbers to the table can give organization leaders the kind of detail they need to make, and then justify, hard cost decisions.
“It’s kind of a slog to get this done,” he said. “But anything worth doing is worth the time to do it.”
Plus, it gets easier over time. “Once you do it a few times, you can do it quicker,” he said.
