New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Life Cycle Costing

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Life Cycle Costing

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

What is Life Cycle Costing? “An economic assessment of a building or building component that considers all the significant costs of ownership over its economic life…expressed in terms of equivalent dollars.” Dr. Stephen Kirk

Life Cycle Costing Expert life cycle costing consultants IMI’s third party expert is Dr. Stephen Kirk Co-author of Life Cycle Costing for Facilities, Published by R.S. Means

Embodied Energy:

The amount of energy invested in a building, from the light over the draftsman's table, through construction including all the energy invested in the materials, all the lighting, heating, cooling, maintenance necessary for building operation, including, ultimately the energy invested in demolition at the end of its useful life.

James Marston Fitch

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

How does one get access to Life Cycle costing information? Hire an expert consultant to do a custom study for you, Try to determine on your own own, Go to the IMI web site (www.imiweb.org) and request to have one run to your specifications.

Life Cycle Costing Instrument The Life Cycle Cost instrument that IMI uses gives an owner, design professional or CM the opportunity to compare the lifecycle costs off a group off wall or ffloor systems while there is still time to make informed decisions as to the best value for their specific application.

What is the advantage of having Life Cycle Costing information? Making an informed decision is all about having the right information at the right time.

Life Cycle Costing

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

How did IMI develop an instrument to determine Life Cycle Costs?

IMI hired a third party expert to d develop l the th system t using i data d t that th t is i readily available and recognized by the design and construction industry.

QUIZ #1 Is Life Cycle costing the same for everyone?

Not always Different building types Different values

Green: The Right Thing to Do

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Green Thinking

New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

takes the long-term view and looks at the larger impacts on the environment and society. recognizes that total life cycle costing ti iis an essential ti l partt off such holistic thinking realizes that a building’s initial capital cost amounts to only a fraction of the total cost of running and maintaining it.

How Can Consideration of Life Cycle Cost add value? Poorly considered

Cost of operation Life Cycle Costing exceeds building value

Embodied Energy ($)

Carefully considered y Costing g Life Cycle

Added value

Resources committed: Mining, Manufacturing, Energy, Labor

Demolition

Construction

Lifespan of Building Recycle components / Disposal

Factors to consider: Initial cost Daily or typical maintenance costs Energy costs Regular but periodic maintenance Major renovation / restorations Inflation Building lifespan

Life Cycle Costing

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

What is the lifespan of a building? Lifespan of Building 100

200

300

Demolition

Construction

0

DETERIORA ATION

Intervention Maintenance

Restoration, Continuing

Point at which initial rehabilitation or preservation takes place

Frequently spaced interventions for maintenance Amount of deterioration

Rate of deterioration

TIME

DETERIORA ATION

Intervention – Single Event Point at which single rehabilitation or restoration event takes place

Continuing rate of deterioration

Rate of deterioration Amount of deterioration TIME

Life Cycle Costing

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009 What is the lifespan of a building? Lifespan of Building 200

300

Demolition

100

Construction

0

Bay City Train Depot

QUIZ #2 Name at least 3 key factors to consider when preparing a LCCA?

Initial cost Daily or typical maintenance costs Inflation

Executive Order 13327: Federal Environmental, Energy, and Transportation Management Into effect Jan. 2008 Aimed at I Improving i energy efficiency ffi i Reducing greenhouse gasses Considers sustainable environmental practices Acquisitions of goods and services

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Executive Order 13327: LCCA - recommended method for accomplishing these goals

National Institute of Standards and Technology (NIST) Handbook 135 “Life Cycle Costing Manual for the Energy Management Program” Standard life-cycle costing method Developed in 1987 Revised in 1996

NIST Handbook 135 Serves as the definitive guide for developing LCCA studies. Provides defined discount rates for LCC NIST annual supplements provide current rates.

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QUIZ #3 What is the “Life Cycle Costing Manual for the Energy Management Program”?

New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

NIST Handbook # 135

ASTM Standards Help in the development of LCCA studies. E917 – 05 Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems E1057 – 05 Practice for Measuring Internal Rate of Return in Buildings & Building Systems

Life Cycle costing studies help to control costs Considers long-term material choice implications Improves ability to make better design choices EXAMPLE: Flooring options: carpet vs. terrazzo. Most cost effective option for a busy high school public area? Most cost effective for leased office space?

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Carpet / Terrazzo

$ / SF 20 10

7

14

Years

21

35

28

Current Decisions = Long-term Implications Only practical opportunity to minimize your long-term maintenance costs lie in the choices made during design. Poor choices impact Budget Building performance for the lifespan of the structure.

QUIZ #4 How does Life Cycle fit into sustainable projects?

Life cycle is becoming more important to LEED projects. Innovation and Design points i t awarded d d for f Cradle to Cradle product certification. ASTM continuing to look at life cycle.

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Wall or floor - consideration factors Initial Cost Maintenance Costs Energy Costs Non-monetary Considerations

Cost Analysis Report Initial Costs are like construction estimates. Cost adjustment factors per CSI division for each location. No Present Worth (PW) analysis because all these costs occur at the beginning.

How it’s done: Produce a sketch for each system and indicate what portion of the wall or floor is included. Cost an approximate 10’ X 10’ area then divide back to get an average square foot cost.

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Initial Cost R.S. Means was used as the data source. Break down systems to components and price. Costs include material, labor, equipment, overhead and profit.

Cost Analysis Report Replacement Cost deals with major maintenance or replacement costs Present Worth (PW) represents purchasing power Present Worth addresses: Periodic spending and costs Purchasing power changes in dollar over time

Maintenance Cost Whitestone - data source. Data - field gathered. Costs - by building type. Long-term & daily cost were considered.

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Energy cost: ASHRAE Performed by energy analysis consultant. Uses heating/cooling industry software Calculations p performed for specific p wall types. yp

Energy cost escalators calculated separately from general inflation factors.

Non - Monetary Rating Fitting the client is not all about money. Different clients have different needs/ priorities.

Example of non - monetary environmental sustainability desire Client placing high priority on LEED platinum

Weights and Scores Weights define clients desires and criteria: Image and Aesthetics Color Rendition Environmental Sustainability Obsolescence Avoidance Operational Effectiveness Durability Future Extendibility

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Understanding Weights Total of 100 points of combined weights Higher values lead to lower values on others. Image and Aesthetics Color Rendition Environmental Sustainability Obsolescence Avoidance Operational Effectiveness Durability Future Extendibility

20 5 25 10 10 30 0 Total 100

Scoring Establishes system’s ability to meet criteria. Scores are based on a value of 1 through 10 1 is low and 10 is high.

Examine E i each h wallll or flfloor Determine how well it meets the same criteria used for weighting. For example, how durable is the wall or is it aesthetically pleasing?

School Case Study Exterior Wall Choices Metal stud with gypsum interior and brick exterior CMU cavity it wallll with ith painted i t d iinterior t i and brick exterior Integrally colored burnished block cavity wall with brick exterior

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

School Case Study Let’s also limit ourselves to the three factors listed below. We will apply the following weights to these three factors: Image g or Appearance: pp Environmental Sustainability: Durability

30 30 40

Appearance Gyp & Stud

1 2 3 4 5 6

7 8 9 10

Painted Block

1 2 3 4 5 6

7 8 9 10

Burnished Block

1 2 3 4 5 6

7 8 9 10

Gyp & Stud

Painted Block

Colored Burnished Block

Environmental Sustainability Gyp & Stud

1 2 3 4 5 6

7 8 9 10

Painted Block

1 2 3 4 5 6

7 8 9 10

Burnished Block

1 2 3 4 5 6

7 8 9 10

Gyp & Stud

Painted Block

Colored Burnished Block

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Durability Gyp & Stud

1 2 3 4 5 6

7 8 9 10

Painted Block

1 2 3 4 5 6

7 8 9 10

Burnished Block

1 2 3 4 5 6

7 8 9 10

Gyp & Stud

Painted Block

Colored Burnished Block

Comparing Wall Systems Benefit Score Defines how well each wall meets the clients desires Multiply M lti l Weight for a given factor by Score for that factor and then the Benefit (total) for the wall.

Weight X Score = Benefit Appearance

Environment

W

W

S

B

S

B

Durability W

S

B

GYP & 30 X 6 = 180 Stud

30 X 4 = 120 40 X 4 = 160

Paint CMU

30 X 7 = 210

30 X 7 = 210 40 X 7 = 280

Burn Blk

30 X10 = 300

30 X10 = 300 40 X10 = 400

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Benefit totals for each wall type Appearance Environment Durability Benefit Score

GYP & Stud

180

120

160

460

Paint CMU

210

210

280

700

Burn Blk

300

300

400

1000

Cost Benefit Ratio Benefit to Cost Ratio =

Benefit Total Life-Cycle Cost

Benefit to cost ratio compares Ability of selected systems meet clients desires Cost of selected systems

The higher the value the better the fit.

Cost Benefit Ratio “best bang for the buck” score

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Adjusted Cost Data by Cities Cost data for each wall type is adjusted by city. The following numbers are for Philadelphia. By looking up some lifecycle costs in our system we can provide the following data: Gyp & stud $39.57 Painted CMU $40.34 Burnish Block $47.42

Benefit to cost ratio and rank Benefit

Cost

Benefit /

Rank

Cost

GYP & Stud

460

$39.57

11.6

3

Paint CMU

700

$40.34

17.3

2

Burn Blk

1000

$47.42

21.1

1

QUIZ #5 What are the key points for comparing p g systems per LCCA?

Establish criteria for comparison Establish Weights, Scores and Benefits Scores, for criteria Understand and apply local costs

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

Getting the most out of your report: Choose most realistic wall/ floor systems for your application. REMEMBER: Exterior wall systems, interior walls & floors are separate reports Request more than one report if necessary

Request your report from IMI

WWW.IMIWEB.ORG OR: Call your local IMI office at 1 - 800 – IMI - 0988

For Answers to Your Masonry Questions

Contact IMI

1–800 800– –IMIIMI-0988

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

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New York State School Boards Association 2009 Annual Convention, NYC October 15-18, 2009

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