Savvy Spending
Oct 1, 2009 12:00 PM, By Mike Kennedy (mkennedy@asumag.com)
Incorporating life-cycle costing into facility decisions enables schools and universities to have buildings that operate efficiently for the long term.
To keep up with a growing suburban community east of Indianapolis, Mt. Vernon High School in Fortville, Ind., is in the midst of a $44 million overhaul. Renovations to the 210,000-square-foot campus and construction of about 180,000 square feet of new space are expected to meet the school's space needs for years to come.
And to meet the school's energy needs well into the future, workers have drilled several hundred holes 200 to 300 feet into the ground to install a geothermal heat-pump system.
If administrators in the Mt. Vernon district were concerned only with the costs of installing a system to heat and cool the campus, it's unlikely that they would have chosen a geothermal system. “The upfront costs are more than for a traditional system,” says assistant superintendent Mike Horton.
But by looking beyond initial construction and analyzing how much the school district would have to pay to operate and maintain the system in the years ahead — and how much the system would reduce the facility's carbon footprint — Mt. Vernon leaders concluded that a geothermal system was the most cost-effective.
“The ongoing cost to run the system is going to be less,” says Horton. “With our general funds shrinking, it's important to find ways to save money.”
Mt. Vernon is one of many school districts and higher-education institutions that have embraced life-cycle costing strategies as they make their facility plans.
“The understanding of the process is growing,” says Richard Thomas, a vice president at SHP Leading Design, an architecture firm based in Cincinnati. “Because of rising energy costs and a greater awareness of the environmental movement, more people are willing to look at the long term.”
The long view
The concept underpinning life-cycle costing strategies should be familiar to every consumer that makes a spending decision. Two products may promise similar benefits, but the price of one is noticeably less. Can you choose wisely? If the price at the cash register were the only factor, buyers would opt for the lower price every time. But many people consider other characteristics: which product performs better, which one lasts longer, which one has more appealing aesthetics. Consumers don't always have access to that data, so they may have to make decisions based on other factors — marketing, word of mouth, and trial and error.
In education, life-cycle costing is a method of gathering reliable information to provide administrators with a basis for choosing the most cost-effective option in designing, building and outfitting a facility. Rather than rely on hunches, vague estimates or promises, life-cycle costing can help schools and universities arrive at objective answers to questions about the total cost of owning a facility over its entire life. That includes how long a building will last and how much it will cost to operate and maintain it to make sure it does last. It also may include the costs of disposing of the facility and the materials and equipment within it once they have worn out.
Old idea
The concept of life-cycle costing is not new. The expression “penny wise, pound foolish” has been around for centuries to admonish those who opt for short-term solutions that don't provide savings in the long run. Yet, much of modern society, especially in the post-World War II United States, has adopted a throw-away culture that emphasizes discarding and replacing items.
“Americans have tended to focus on more short-term investments,” says Thomas.
That short-term thinking is reflected in many of the school facilities built in the baby-boom era. Thousands of hurriedly planned, built-on-the-cheap schools provided badly needed classroom space for the post-war generation. Those buildings served their purpose of accommodating the baby-boom population bubble, but by the 1990s, facilities were deteriorating more quickly than those built decades earlier.
As more educators, administrators and political leaders came to the realization in the 1990s that they had to do something about the hundreds of billions of dollars in deferred-maintenance needs in U.S. school facilities, a new wave of school construction and renovation began with a different perspective. Instead of short-term providers of space that taxpayers reluctantly paid for out of an obligation, schools were seen as integral components of a community and worthy of significant long-term investment.
Schools and universities that look at their facilities as assets that will be valuable and vital for years to come are more likely to see the worth of life-cycle costing strategies.
Green considerations
In the last several years, the growing demand that education institutions incorporate sustainable design and construction concepts in school facility plans has created a greater emphasis on using life-cycle costing. The use of long-lasting materials and equipment enables schools and universities to avoid the unnecessary consumption of energy and resources to replace those items.
Systems designed that generate sufficient heating and cooling but use less energy and emit fewer pollutants can provide schools with operational savings and environmental benefits. Buildings that use less water save schools money and conserve limited resources.
Life-cycle costing can be applied to countless items in a school facility. As the process evolves, designers and administrators are gathering more data about how various elements in a project can affect costs over the life of the project. Sifting through all that information and determining how all the factors interrelate to affect building performance can be overwhelming, so many planners have turned to building information management (BIM) technology to create models and test how decisions influence how building systems operate, says Aaron Phillips, director of technology and BIM services at SHP Leading Design.
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