The Cost of Doing Nothing. you cannot escape the responsibility of tomorrow by evading it today. Abraham Lincoln
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1 The Cost of Doing Nothing you cannot escape the responsibility of tomorrow by evading it today Abraham Lincoln
2 Presenters Roger Woods, PE Matt Parker, PE Bill Smith, PE
3 Overview The Consequences of Inadequate Care of Facilities Case Study: The Basics: Worse Case Scenario: Common Scenario: Effects: Effects: Report Card: The State of North Carolina Maintenance vs. Time & Replacement vs. Time No Maintenance Delayed Replacement Operating Costs Collateral Damage The State of North Carolina
4 Case Study: State of North Carolina
5 Case Study: State of North Carolina Facility Assets * Nearly 12,000 buildings 119M SF and this number is growing * Information from NC Department of Administration State Property Office report dated March 2013
6 Case Study: State of North Carolina The 2000 Higher Education Bond added 6M SF of new facility construction * Asset quantities are increasing and buildings are getting older * Information from Higher Education Bond Oversight Committee, Bond Program, Final Report, dated September 2010.
7 Case Study: State of North Carolina History of repair & renovation funding: * Information from The Governor s Recommended State Budget presented by the Office of State Budget and Management dated March 21, 2013
8 Case Study: State of North Carolina History of repair & renovation funding: * * * Information from The Governor s Recommended State Budget presented by the Office of State Budget and Management dated March 21, 2013 ** Adjustment based on legislative funding of $150M over 2 years
9 Case Study: State of North Carolina Trends in funding for repair & renovation do not match trend of increasing quantity of State facility assets TIME
10 Case Study: State of North Carolina For example. UNC System: Consumers of roughly half of State budget Generally allocated half of State repair & renovation funding each year
11 Case Study: State of North Carolina For example. UNC System: Reports a backlog of repairs of $2.2 billion * Adding State facilities increases this $4.4 billion * Is it possible to catch-up? * Information from Budget Priorities of the Board of Governors, The University of North Carolina dated February 8, 2013
12 Case Study: State of North Carolina What about Jobs? Funding these repairs & renovations may create or sustain 125,400 construction-related jobs * * Based on AIA & AGC data of 28,500 jobs per $1 billion worth of construction. AGC has developed and substantiated this data based on scholarly research through university studies.
13 Case Study: State of North Carolina Who suffers from lack of repairs?
14 Case Study: State of North Carolina Who suffers from lack of repairs?
15 Case Study: State of North Carolina Who suffers from lack of repairs?
16 Case Study: State of North Carolina Who suffers from lack of repairs?
17 Case Study: State of North Carolina Who suffers from lack of repairs?
18 Consequences of Inadequate Care of Facilities The Basics: Maintenance vs. Time
19 Maintenance vs. Time Typical equipment failures as a function of time: 100 Optimal Condition Survival % Minimal acceptable Condition Time * Information from 2007 ASHRAE Handbook, HVAC Applications
20 Maintenance vs. Time Predicted equipment service life as a function of time: Optimal Condition Service life w/ maint. Condition Minimal acceptable Condition Time * Information from Predicting Outcomes from Investments in Maintenance and Repair for Federal Facilities, 2012, Board on Infrastructure and the Constructed Environment (BICE). Data Source: NRC 1993, 1998.
21 Maintenance vs. Time Maintenance & replacement cost as a function of time Design performance Condition Minimum performance Replacement Cost Maintenance Cost Time * Information from Effective Building Maintenance Protection of Capital Assets by Herbert W. Stanford III, PE
22 Maintenance vs. Time Maintenance & replacement cost as a function of time Design Service Life Design performance Condition Minimum performance Replacement Cost Maintenance Cost Time * Information from Effective Building Maintenance Protection of Capital Assets by Herbert W. Stanford III, PE
23 Maintenance vs. Time Maintenance & replacement cost as a function of time Design performance Design Service Life End of Performance Life (failure) Condition Minimum performance Replacement Cost Maintenance Cost Time * Information from Effective Building Maintenance Protection of Capital Assets by Herbert W. Stanford III, PE
24 Maintenance vs. Time Maintenance & replacement cost as a function of time Design performance Design Service Life End of Performance Life (failure) Condition Minimum performance Replacement Cost Maintenance Cost Time Optimal Time for Replacement * Information from Effective Building Maintenance Protection of Capital Assets by Herbert W. Stanford III, PE
25 Consequences of Inadequate Care of Facilities The Basics: Replacement vs. Time
26 Replacement vs. Time Normal life cycle cost as a function of time Major building systems generally require replacement at years * Information from Article Life Cycle Methods Will Remain after the Global Financial Crisis, 2009, The Barchan Foundation, Inc.
27 Consequences of Inadequate Care of Facilities Worse Case Scenario: No Maintenance
28 No Maintenance What happens if maintenance is ignored? Design performance Condition Minimum performance Replacement Cost Maintenance Cost Time
29 No Maintenance What happens if maintenance is ignored? Condition Design performance Minimum performance Replacement Cost Maintenance Cost Time End of Performance Life (failure) Equipment life expectancy will be shortened if maintenance costs are reduced
30 No Maintenance The no-maintenance model: End of Performance Life (failure) Condition Design performance Minimum performance Replacement Cost Maintenance Cost Time Equipment life expectancy will be shortened if maintenance costs are reduced
31 No Maintenance Decrease in system life expectancy (replacement required sooner than normal) Optimal Condition Condition Service life w/o maint. Minimal acceptable Condition Service life w/ maint. Lack of maintenance can reduce age of equipment by 20-50% * Time Lost service life * Graph information from Predicting Outcomes from Investments in Maintenance and Repair for Federal Facilities, 2012, Board on Infrastructure and the Constructed Environment (BICE). Data Source: NRC 1993, 1998.
32 No Maintenance The scheduled replacement cycle:
33 No Maintenance The scheduled replacement cycle: Initial Install Replace #1 Replace #2
34 No Maintenance The no-maintenance replacement cycle: (replacement required sooner than normal) Initial Install Replace #1 Replace #2 Replace #3 Lack of maintenance can add an entire replacement cycle to the life cycle delivery
35 No Maintenance Zero investment in maintaining facility systems does not mean zero costs: Ignored repair = work-around Work-around = poor system performance Poor system performance = increase in operating costs Unexpected failure = emergency replacement
36 No Maintenance Emergency replacement = premium replacement cost, facility downtime, consequential damages, Geaslin s Inverse Square Rule: The total cost of emergency repair will be the square of the cost of the part alone if replaced on schedule. * Information from Paying for Deferred Maintenance, Jana J. Madsen, Buildings Magazine, June 2006.
37 Consequences of Inadequate Care of Facilities Common Scenario: Delayed Replacement
38 Delayed Replacement Maintenance & replacement cost as a function of time Design performance Condition Minimum performance Replacement Cost Maintenance Cost Time
39 Delayed Replacement Maintenance & replacement cost as a function of time Design performance Condition Minimum performance Replacement Cost Maintenance Cost Planned Maintenance Time
40 Delayed Replacement Maintenance & replacement cost as a function of time Design performance Condition Minimum performance Replacement Cost Maintenance Cost Planned Maintenance Time Maintenance Beyond Design Service Life The cost of delayed replacement can be more than double the expenses of planned maintenance
41 Delayed Replacement Time is (not) on your side QUALITY INITIAL DESIGN TIME
42 Delayed Replacement Time is (not) on your side QUALITY INITIAL DESIGN TIME
43 Delayed Replacement Time is (not) on your side QUALITY INITIAL DESIGN Increasing costs for utilities, repairs & renovations TIME
44 Delayed Replacement Living on the edge Significant component failure (compressors, motors, ) Frequent system downtimes Significant leaks Excessive noise Control malfunctions and the list goes on.
45 Consequences of Inadequate Care of Facilities Effects: Increase in Operating Costs
46 Increase in Operating Cost Energy and efficiency cost premium as a function of time: Design performance Condition Minimum performance Replacement Cost Maintenance Cost Time
47 Increase in Operating Cost Energy and efficiency cost premium as a function of time: Design performance Condition Minimum performance Replacement Cost Maintenance Cost Time Energy Premium
48 Increase in Operating Cost Energy and efficiency cost premium just how much? Here s a thought: Code Minimum
49 Increase in Operating Cost Energy and efficiency cost premium just how much? Here s a thought: 20% Energy Savings SB 668 LEED Code Minimum
50 Increase in Operating Cost Energy and efficiency cost premium just how much? Here s a thought: 20% Energy Premium Delayed maintenance No maintenance 20% Energy Savings SB 668 LEED Code Minimum
51 Increase in Operating Cost Energy and efficiency cost premium just how much? Here s a thought: 20% Energy Premium Delayed maintenance No maintenance 40% Code Minimum 20% Energy Savings SB 668 LEED
52 Increase in Operating Cost Energy and efficiency cost premium as a function of time: Poor maintenance = decrease in system operation efficiency Decrease in operation efficiency = increase in energy consumption
53 Increase in Operating Cost Table stakes: what are building utility costs? For example Average Energy Cost for State Facilities in North Carolina: $ 2.21 per SF * * Information from NC State Energy Office report for fiscal year 2011/2012.
54 Increase in Operating Cost Table stakes: what are building utility costs? For example 2011/2012 Fiscal Year Energy Cost for State Facilities in North Carolina: $ 330 M * * Information from NC State Energy Office report for fiscal year 2011/2012.
55 Increase in Operating Cost Table stakes: what are building utility costs? Over 3 years 1 BILLION DOLLARS
56 Increase in Operating Cost Table stakes: what are building utility costs? Break it down Average Office / Classroom Building EQUIP EQUIP LIGHT LIGHT HVAC HVAC * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University.
57 Increase in Operating Cost Factors Affecting Energy Performance HVAC EQUIPMENT Failing Boiler Problem Energy Difference * 93% efficient boiler acting like a 80% boiler +4.0% * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University.
58 Increase in Operating Cost Factors Affecting Energy Performance HVAC EQUIPMENT Failing Chiller Problems Energy Difference * Fouled tubes +2.2% Poor refrigerant charge +3.7% Fouled tubes create 10% (or more) loss in chiller efficiency ** Poor refrigerant change (over or under 10%) creates 17% loss in chiller efficiency ** * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University. ** Information provided by Brady Trane.
59 Increase in Operating Cost Factors Affecting Energy Performance HVAC EQUIPMENT Dirty Cooling Tower Problems Energy Difference * Fouled cooling tower (4 degree rise in condenser water temp) +1.3% For every 1 degree rise in condenser water temperature, chiller efficiency is lowered approximately 1-2% ** * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University. ** Information provided by Chillers Energy Saving Fact Sheet, North Carolina Energy Office, dated 05/2010.
60 Increase in Operating Cost Factors Affecting Energy Performance HVAC EQUIPMENT Pump Speed Malfunction Problem Energy Difference * Variable flow pumping runs full speed +10.6% * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University.
61 Increase in Operating Cost Factors Affecting Energy Performance HVAC EQUIPMENT Fan Speed Malfunction Problem Energy Difference * Variable speed fan runs constant volume +8.4% * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University.
62 Increase in Operating Cost Factors Affecting Energy Performance HVAC EQUIPMENT Dirty Filters Problem Energy Difference * Dirty filters in AHU s (add 1 static pressure) +4.1% * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University.
63 Increase in Operating Cost Factors Affecting Energy Performance SUMMARY Energy Difference * Failing Boiler 4.0 % Failing Chiller 5.9 % Dirty Cooling Tower 1.3 % Pump Speed Malfunction 10.6 % Fan Speed Malfunction 8.4 % Dirty Filters 4.1 % TOTAL 34.3 % * Information gathered from an energy model evaluation of SAS Hall, a recently constructed classroom/office building at NC State University.
64 Consequences of Inadequate Care of Facilities Effects: Collateral Damage
65 Collateral Damage Who (or what) else is affected by a failing facility? Lost hours / productivity Lost revenue Incidental facility damage (leaks, mold ) Lost research / data / inventory Overworked maintenance staff Undesirable work environment and the list goes on
66 Report Card: State of North Carolina
67 Report Card: State of North Carolina QUESTION: What are the recommended annual maintenance cost needs of a facility: ANSWER: 2 4 % of facility replacement cost * * Information generalized from various sources including: Whitestone Facility Maintenance and Repair Cost Reference, 2012, Whitestone Research; Predicting Outcomes from Investments in Maintenance and Repair for Federal Facilities, 2012, Board on Infrastructure and the Constructed Environment (BICE). Data Source: NRC 1993, 1998; Budget Priorities of the Board of Governors, The University of North Carolina dated February 8, 2013.
68 Report Card: State of North Carolina QUESTION: What are the recommended annual maintenance cost needs of a facility: ANSWER: 2 4 % of facility replacement cost * QUESTION: Based on proposed State budget for repair & renovation funding, how is NC funding these needs: ANSWER: 0.3% of facility replacement cost ** * Information generalized from various sources including: Whitestone Facility Maintenance and Repair Cost Reference, 2012, Whitestone Research; Predicting Outcomes from Investments in Maintenance and Repair for Federal Facilities, 2012, Board on Infrastructure and the Constructed Environment (BICE). Data Source: NRC 1993, 1998; Budget Priorities of the Board of Governors, The University of North Carolina dated February 8, ** Information calculated based on $62.5M repair & renovation funding (average proposed for each of next 2 years) divided by current replacement value of State facilities (119M GSF x $180 per GSF replacement cost).
69 The Cost of Doing Nothing you cannot escape the responsibility of tomorrow by evading it today Abraham Lincoln
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