Whether your facility is twenty-plus years old or construction is nearing completion, there is a fundamental need for planning the required reserve funds for the next twenty or thirty years.  Our clients often pursue this question after ten to twenty years of operation.  A good study will address all capital replacements that cost more than a threshold limit (often $1,000) and have a lifetime of more than one year. Often, painting is not included, but painting can extend the lifetime of a building system, so many people include it as a capital expense.

The engineer that performs the study will typically visit the site one or two times prior to submitting a draft budget report for review by the executive, CFO, and facility manager.  We prefer to sleep on-site if a guest room is available.  Ideally, the engineer’s time on-site is maximized.

A visit (or survey) begins with an interview with the primary people involved with the study at the facility. The interview covers basic facility information, chronic problems on the site, and wish-list items that can be included in the budget as improvements (not capital expenses). The interview should be followed by a walk-through of the major buildings. The service should include software that can be used to update the budget information and run reports. Time must be set aside in the first visit to introduce the users to the software and install it on at least one computer. Look for software-based services that you will be able to update, rather than static, hard copy reports.

The engineer will spend the next two or three days walking the entire facility, taking photos, recording information, interviewing individuals such as maintenance, food services, marketing and sales, fitness, activities, and transportation directors. The engineer may need to review drawings and specifications on-site unless the owners have sent the drawings to the engineer’s office.

Be sure to describe all of the physical problems in the facility to your engineer, even if you think the engineer will not be able to address them. This is their job. The worse the problem, the more the engineer will have to work. If they need a specialist, they should contact one. But you should insist that all of your problems be addressed in the budget and narrative report.

A good engineer will demonstrate some of the important resources that are available on the Internet. Some of our favorites are:

http://www.dsireusa.org/ – A clearing house of all available energy-related rebates, loans, and incentives available in the US. This is kept current by the University of North Carolina. All of my clients use it.

http://www.bigtray.com/ – This is a good resource for commercial kitchen equipment. Many of our clients have been at the mercy of their local restaurant equipment vendors for too long. They have found Bigtray to be a wonderful resource for availability and pricing. At a minimum, the pricing will help keep your local vendor honest.

http://www.usgbc.org – This includes a list of available resources for LEED certification under the Existing Buildings: O&M program.  LEED certification has advantages in reduced operating expenses and marketing. Even if certification is not being considered at this time, the operations savings techniques that are documented in these resources are worth pursuing.

Usually the engineer will send out the first draft copy of a twenty- or thirty-year budget within a week or two, for review and discussion with the executives at the facility. The report should show, in a matrix format, each cost that has been scheduled over the duration of the report. This will look like a spreadsheet. Costs should be totaled for each year of the study and for the cycle of costs for the individual item. For instance, carpet in a dining room may be scheduled for replacement every seven years during a 20-year study. Yearly costs should be totaled vertically, while item costs should be totaled horizontally.

A good engineer will provide rough budget estimates for repairs, replacements, and improvements that you may want to consider in future years, plus provide recommendations for materials or techniques that can be used to fix a problem. If your drains are failing below grade, the engineer might recommend a cured-in-place piping repair as an alternative to conventional pipe replacement. The engineer may ask a waterproofing specialist or a roofing contractor to visit your facility to prepare a proposal that will be added to the budget.

After the executives have reviewed and approved the budget reports, the engineer typically prepares the final narrative report, with exhibits and photos. A follow-up visit with additional software training and demonstration to the board of directors is a huge plus, if it can be included in the services. Some of the executives that we have worked with have asked us to meet with planning committees or architects. Some architects will focus too much on a new addition to the building, and not enough on renovation work that is needed in an existing wing. A coordination meeting can be useful for documenting the extent of renovation that is needed as part of a major capital project.

All studies should be done in accordance with ASTM E 2018-01 Standard Guide to Property Condition Assessment. This is the official baseline for reporting.

Your engineer should have twenty or more years of experience. These studies should not be a training ground for young, non-professional assessors. We recommend that you get references for the service provider, and if possible, get the resume of the engineer.

A good engineer has a well-rounded and current list of training that they have been pursuing. Maybe they are LEED certified. They should have training in roofing systems, waterproofing, HVAC equipment, electrical systems, life safety code issues, masonry, paving, and other building systems. Shop around, nationally. The good ones will travel.

zumBrunnen, Inc.

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