SECTION 6 - Asset Management

LONG-TERM OPERATING COSTS

Long-term operating costs can manifest themselves in facilities in a variety of ways.  The most visible and notorious is simple deferred maintenance, where systems, equipment and materials are not taken care of and they age or fail prematurely.  The normal excuse is that the organization does not have the resources, in either labor or dollars, to perform the expected levels of upkeep.  Other costs are less visible and more parasitic such as energy and operating costs.

Another frequently overlooked long-term cost is staffing, not for maintenance but due to inefficiencies that are created by virtue of poor design.

Simple, cost-effective designs, can, if properly developed and implemented, deliver good results relative to long term operating costs.  Conversely, complex, expensive designs, done under the auspices of life cycle costing, high quality materials, and optimum efficiency can have bad results.  Thus, neither approach by itself is the solution, but rather either can be optimized through careful consideration of their effects on long-term costs.

Life cycle costing is a good strategy to utilize when comparing a high efficiency system at high first cost versus a low efficiency system at low first cost, and is addressed elsewhere.  However, what about a high efficiency system that is too complex for the facility to manage and may not last as long or won't perform optimally without the careful attention necessary to keep it in top condition?

What about an average efficiency system with simple controls that is hard to maintain because of its location?  Is that solving the problem?

Material quality can have a big impact and may not always be a cost issue, although often it is.  The choice of a cheap paint when a more expensive type would last twice as long may be a poor value decision because the labor to install is virtually the same, the first time.  The bathroom fixtures in the student area may not be a strong focus for reducing quality but the teacher's toilet rooms may be, due to less expected abuse, and may last as long as the rest.

These issues point out the breakdowns in the system, as we know it today and highlight the importance of design excellence relative to asset management.

Some key points to keep in mind relative to long term operating costs

• Operating cost far outweighs first cost on a facility.
• Energy is not getting any more plentiful or cheaper.
• The cost of staff to maintain and operate facilities is outpacing inflation.
• The availability of staff to maintain and operate facilities is decreasing.
• The occupants of the facility are impacted by the building system.
• Excellent design adds long-term value.
• Material quality should match use.

There are numerous articles available via the internet and in public domain that discuss the virtues of the right choices; in some cases, the right compromises will result in better long term operating costs.

- Lowell Shields