Reducing Annual Operating Costs Through Good Design

Lucas Christian Academy

Capital projects on school campuses face a significant challenge in accomplishing as much as possible with limited resources, but construction dollars represent only a small fraction of the total expenditures over the life cycle of a new school building. While cost of construction is certainly an important consideration, long-term building owners and operators like schools and universities should also consider the true costs of a building over its entire life cycle. Beyond construction cost, life cycle costs also include operating expenses and energy use, maintenance and repairs, replacement of furnishings and equipment, and future renovations as needs change. Over a 30- to 50-year building life, operations often represent 65-85% of the full cost over a building’s life cycle.

Design decisions about the selection of major building systems, along with characteristics of the building envelope, interior environment and site development can make a direct impact on your yearly operating budget, and a modest investment in strategic priorities and long-term thinking during the initial definition of a project can result in substantial savings over the life of a building. As an example, a school building with a construction cost of $10 million might represent $50 million or more in costs over its life cycle. If a strategic design process can reduce operating costs by 15 percent, the resulting life cycle cost savings could be $7.5 million.

These strategic decisions fall into three major categories:

  1. Choices which may increase direct construction cost but result in lower operating costs, such as higher efficiency HVAC equipment, direct digital controls for HVAC, high performance glass, improved building insulation, exterior solar shading and improved durability of interior finish materials.
  2. Strategies with little or no construction or design cost impact, such as solar-optimized building orientation, integrated and holistic consideration of the interaction among building systems, iterative energy modeling to test the impact of design alternatives, and thoughtful programming to “right size” the building from the start.
  3. Design decisions which offer long term benefits to users but where return on investment is difficult to quantify. Research indicates that daylighting and views to the outside, enhanced room acoustics, localized temperature control and improved indoor air quality enhance student performance, reduce absenteeism for both students and staff, increase user satisfaction, comfort, productivity and well-being, and aid recruiting and retention.

Other than personnel, energy use is the most significant part of operating cost, so investing in energy efficiency is one of the most effective means of reducing life-cycle costs. This includes strategies for sustainability but does not necessarily mean pursuing building credentials under LEED, Green Globes or WELL. Heating and cooling use 50% of the energy consumed in schools while lighting an additional 15-30%, so efficiencies gained there are most impactful. MEP systems typically represent up to one third of the cost of construction in school buildings. However, since these systems are both high dollar value and mostly invisible, they are not appealing as donor opportunities and are often targets for what’s called value engineering but is in fact mostly cost cutting. Building owners and designers should consider the cost impact of higher efficiency HVAC systems in light of their projected energy use through a life cycle cost analysis. While a projected 20- or 25-year payback to upgrade HVAC system specifications from a baseline system to one with cutting edge technology might not make sense, a 5- or 10-year payback could be a worthwhile investment.

Longevity is another important factor in life cycle costs, particularly in the selection of finishes in school buildings. As examples, a resilient floor might be less expensive to install than terrazzo but requires regular maintenance and replacement every 10-15 years. Over a 40-year building life, a resilient floor might cost twice as much as terrazzo or polished concrete, which require virtually no maintenance. Rooftop-mounted HVAC equipment is initially more economical to install, but exposure to the elements will accelerate its deterioration and shorten its useful life when compared with indoor equipment of similar function.

Strategic thinking during project definition can often improve operating efficiency and operating cost with little or no burden on construction cost. We recommend an integrative design approach which considers building systems holistically. Where a typical “prove that the building satisfies energy code requirements” energy model offers only a snapshot of building performance, using an iterative energy modeling process enables the design team to test the impact of design alternatives across a variety of building systems on overall performance, optimizing return on investment. For example, improving the R-value of roof or wall insulation and adding high-performance windows can reduce the required capacity of the HVAC system, allowing a smaller electrical service and saving HVAC equipment weight and duct sizes, which may in turn yield reductions in building structure or skin cost as well as operational savings. Considered collectively, the net impact to the construction budget for this optimization may in fact be savings rather than additional cost.

Additional design considerations can also provide a useful return on investment which can be difficult to quantify. Design to maximize the use of daylighting not only reduces annual expenditure on artificial light, it offers performance benefits as well, since research shows a connection between the use of daylighting and improved student performance.  One study completed by the California Board of Energy Efficiency, involving 21,000 students, showed that test scores were 15% to 26% higher in classrooms with daylighting. Student performance also benefits from improving the acoustics in learning spaces. Adding absorption to control reverberation time and ensuring isolation from external noise sources improves speech intelligibility, enabling better communication and student focus, enhancing learning.  Strategies such as maximizing thermal comfort by allowing user control, providing natural light and views to the outside, and improving indoor air quality by eliminating volatile organic compounds (VOCs) improve the comfort, health, well-being and productivity of occupants, increasing user satisfaction and reducing absenteeism.

Balancing stewardship and impact to accomplish as much as possible with finite resources is a challenge, but schools should consider the true costs of a building over its entire life cycle. My colleague @Jacquelyn Block, and I presented on this topic at the 2019 Annual Meeting of the National Business Officers Association (NBOA) in San Diego, meeting with professionals from private P-12 schools from across the country. We are ready to help you with strategic thinking to create learning spaces which are inspiring today and efficient for the long term.

Dallas Academy