6/8/2014
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Life Cycle Cost Analysis
The AMP Initiative
Walsh Construction Co./WA
Marc Streleski
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6/8/2014
Outline
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What is Life Cycle Cost Analysis?
The AMP Initiative
Relativity of Cost
Renovation Example
New Construction Example
Summary
Life Cycle Cost Analysis
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Purpose
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To estimate the overall costs of project alternatives and to select the design that
ensures the facility will provide the lowest overall cost of ownership consistent
with its quality and function.
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Deliverable ≈ most economical project
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Most Economical Project ≈ trade between increased capital costs and
lower operational costs.
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High Performance Building Envelopes
Energy and Resource Conservation
Increased Durability
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AMP Initiative
• Asset Management Preservation
– Method of determining your Most Economical Project
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Detailed & Integrated Analysis
Applicable Project Types
Focus on Performance
Delivery Methods
Relativity of Cost
$4.7M Renovation
Land & Related Cost
Construction Contract
Construction Contingency
Furnishings
Architect & Engineer
Surveys & Construction Testing
AMP Initiative
Permits & Impact Fees
LIHTC Fees
Construction Loan Fees & Expenses
Construction Loan Interest
Perm Loan Legal & Closing
Perm Financing Fees & Expenses
Insurance, Accouting & Lease Up
Developer Fee-Sponsor
Reserves
Syndication Costs
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Relativity of Cost
Total Costs over 50 years - Renovation
Development Costs
Utilities & Garbage
7%
18%
Grounds & Maintenance
Replacement Reserve
16%
Management Off-Site
Management On-Site
Other Operating
Services
Relativity of Cost
$11.6M New Construction
Land & Related Cost
Construction Contract
Construction Contingency
Furnishings
Architect & Engineer
Surveys & Construction Testing
AMP Initiative
Permits & Impact Fees
LIHTC Fees
Construction Loan Fees & Expenses
Construction Loan Interest
Perm Loan Legal & Closing
Perm Financing Fees & Expenses
Insurance, Accouting & Lease Up
Developer Fee-Sponsor
Reserves
Syndication Costs
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Relativity of Cost
Total Costs over 50 years – New Construction
21%
Total
Development
Costs
Utilities &
Garbage
Grounds &
Maintenance
28%
13%
Replacement
Reserve
Management OffSite
Renovation
Diminishing Returns?
Savings
100
Existing
X
85
15
0
Energy Star
Baseline Target
(CODE)
(Most Economical
Project)
Extreme
(Passive House)
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New Construction
Savings
100
85
Diminishing
Returns?
X
15
0
Energy Star
Baseline
(CODE)
Target
Extreme
(Most Economical
Project)
(Passive House)
Renovation Example
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Renovation Example
Renovation Example
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Renovation Example
•Estimate
•Integrate Utility Savings
Renovation Example
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Renovation Example
Baseline Annual Cost
vs. Target
Renovation Example
•Target is $1.2M more than the Baseline
•Target provides $100K savings annually
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Achieving the Target
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Revise Strategy
Increase Project Budget/Evaluate with Operating Budget Savings
Phase project(s)
Restructure to realize future savings
New Construction Example
Salishan – Tacoma, WA
HOPE VI - Redevelopment
SAL 1,2,3
• Walsh Construction
• Tacoma Housing
Authority
SAL 5
SAL 6
SAL 4
SAL 7
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New Construction Example
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Designed to perform 30% Better
High Performance Building Envelope First
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No Leaks
 Air Barrier
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Better Windows
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Insulation Above Code:
 R15 Foundation
 R23 Walls (Blown In)
 R25 Rim Joist
 R49 Attic
Better Systems Second
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Ductless Heat Pumps
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More efficient Appliances
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Efficient Fixtures
Field QA/QC
New Construction Example
SAL 7
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Actual Energy Savings 451,724 KwH
Actual Performance 35% better
Payback ≈ 12 years
Project Lifecycle 100+ years
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Summary
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Integration with Master Planning Process
Advanced tool in project planning/design
Flexibility
Does not replace Design Team
Process Yield = Most Economical Project!
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