Planned Replacement or Major Renovation - Effective Building Maintenance: Protection of Capital Assets - page 61

assume that construction cost inflation will be 30-50% higher than the
general inflation rate.
There are numerous spreadsheets and software packages available
to help handle the computational aspects of life cycle cost analysis. One of
the simplest methods is provided by the spreadsheet analysis tool called
“LCCA-1.0” used by the State of North Carolina. The advantage to this
tool is that it does not utilize “discount factors” that have the effect of re-
ducing the importance of future operating and maintenance costs relative
to the initial construction cost. This tool is available to any user at http://
www.nc-sco.com/Guidelines/lcca/TOC_LCCA.htm.
CONSEQUENCES OF
DEFERRING REPLACEMENT/RENOVATION
Deferred maintenance, postponing required maintenance (preven-
tative or replacement/renovation) of building components is the result
of deferring funding for maintenance. Theterm“deferredmaintenance”is
reallyamisnomer—thecorrecttermis“deferredmaintenancefunding.”
Categories of maintenance may be considered to be deferred if not
done when they should have been or when they were scheduled to have
been done based RDSLs.
A ccumulateddeferredmaintenance results from two basic failures:
1. Under-funding of preventative maintenance so that minor repair
work evolves into more serious maintenance problems, often with
expensive “collateral damage.”
2. Failure to fund replacement or renovation of building components
that have reached the end of their service life. This is, by far, the
greater contribution to deferred maintenance.
While the root cause of deferred maintenance is systemic inadequate
maintenance funding, the problem is compounded by choices made dur-
ing austere financial times when even minimum routine maintenance is de-
ferred in order to meet “more pressing” fiscal requirements. What is true is
that management, too often, makes the decision that the value and risks
of funding maintenance at its required level is not as important as the
value and risks associated with some alternative use for available funds!