Lifecycle Costing

School facilities are investments. State government and local communities spend billions of dollars per year on new facilities for current and future generations of students. Unfortunately, the institutional separation of operational and construction budgets can create schools that are economically, environmentally, and educationally poor investments.

Life-cycle costing is a means to calculate and compare different designs to identify which is the best investment. Districts can use it to assess the total cost of ownership for a facility over time. All of the building expenses that can be calculated are included in the analysis, including initial costs (design and construction), operating costs (energy, water, other utilities, and personnel), and maintenance, repair and replacement costs. The values are adjusted for the time-value of money to represent the true value of the investment. Predicted costs for alternative design approaches can then be compared until the approach which provides the lowest overall cost of ownership consistent with the quality level desired for the facility is selected.

The true cost of a school is much more than the price to design and build it. The long term costs of operating and maintaining the facility must also be included. Only by evaluating all three of these parameters can a community understand how much a new school really "costs."

And only by looking at all three parameters simultaneously can the impacts of specific design approaches, especially those which result in better long term performance, be evaluated. High performance classroom glazing, for example, may cost more upfront but may result in energy savings that pay for the glazing in a few years and then continue to save money for the school for years to come. Life cycle cost analysis is the key to making these kinds of comparisons and to creating new schools with the lowest long term costs of ownership.

Note, however, that life-cycle costing will only address some of the benefits of High Performance Design. Many benefits, such as improved health and test scores, are valuable, but difficult to quantify monetarily.