Community Sporting and Recreation Facilities Fund

The Community Sporting and Recreation Facilities Fund (CSRFF) exemplifies the Western Australian Government's commitment to the development of sustainable infrastructure for sport and recreation across the State.

The purpose of the program is to provide Western Australian Government financial assistance to community groups and local government authorities to develop basic infrastructure for sport and recreation.

The program aims to increase participation in sport and recreation, with an emphasis on physical activity, through rational development of sustainable, good quality, well-designed and well-utilised facilities.

Through CSRFF, the State Government will invest annually in the development of high-quality physical environments in which people can enjoy sport and recreation.

There is $12 million available for allocation in the 2019/20 funding round.

Eligibility

  • local governments
  • not-for-profit sport, recreation or community organisations

Must be incorporated.

Guidelines

Refer to the guidelines for more information before applying.

CSRFF guidelines

Who can apply

Amount available

  • Annual and forward planning grants: Over $300,000
  • Small grants: $2500 to $300,000

Funding rounds

Round Open Draft review Close Project start/event dates Category
2020/21 annual and forward planning round 12:00 AM 3 Jun 2019 Not applicable 04:00 PM 30 Sep 2019 Grants given in this category can be claimed up to three financial years following the date of approval, depending on the requirements and approved details of the project.
  • Annual and forward planning grants
2020/21 February small grants round 12:00 AM 3 Feb 2020 Not applicable 04:00 PM 31 Mar 2020 Grants given in this category must be claimed in the financial year following the date of approval.
  • Small grants
2019/20 July small grants round 12:00 AM 1 Jul 2019 Not applicable 04:00 PM 30 Aug 2019 Grants given in this category must be claimed in the financial year following the date of approval.
  • Small grants

Timeframes

There are three rounds of CSRFF per year. Two small grant rounds, and one annual and forward planning round.

CSRFF timeframes

What we fund

CSRFF aims to increase physical activity and participation in sport and active recreation in Western Australia. CSRFF has several priorities to achieve this goal.

What CSRFF funds

How to apply

Information on eligibility and draft application forms.

How to apply for CSRFF >

Recently funded projects

List of recent successful CSRFF grants.

Recently funded projects

Case studies

Four case studies of successful CSRFF grants.

Case studies

Resources for planning and managing sporting facilities

There are publications available on the department’s website which will assist you in preparing your application.

Suggested publications are:

Life Cycle Cost Guidelines

Jul 8, 2019, 13:49 PM
Title : Life Cycle Cost Guidelines
Introduction : The information in this guide will assist facility managers to prepare a management plan for a sport and recreation facility. A management plan will ensure managers achieve efficient management practices for a successful facility.
Select a publication type : Guide

Contents

This guide

Most sport and recreation facilities in Western Australia are built or refurbished with funding from the department.

An important part of the funding process is to make sure the community can bear the true cost of running and maintaining a facility well into the future.

These Life Cycle Cost Guidelines provides facility owners, architects and engineers with the tools they need to develop life cycle cost reports that will be used by the department as it considers publicly owned or funded facilities.

The guidelines mean analysis and reporting can be standardised to ensure a timely and accurate technical review of your facility or project.

Concept and definitions

The Department of Sport and Recreation is committed to pursuing the most desirable project outcomes that reduce the cost to the sport and recreation industry and the broader community.

Developing a life cycle cost approach when considering your project’s parameters will provide you with a solid and informed base from which to make the most effective financial, economic and operationally sustainable decisions.

Principle issues

What is life cycle costing?

Life cycle costing is a key asset management tool that takes into account the whole of life implications of planning, acquiring, operating, maintaining and disposing of an asset.

The process is an evaluation method that considers all ownership and management costs. These include;

  • Concept and definition;
  • Design and development;
  • Manufacturing and installation;
  • Maintenance;
  • Support services; and
  • Retirement, remediation and disposal costs.

One way to express the total life cycle cost is in the form of a mathematical equation.

Total Life Cycle Cost (LCC) = Initial asset acquisition /capital cost (AC) LESS Tax depreciation entitlements (TD) PLUS Operating and maintenance costs (OC) PLUS Replacement / disposal / upgrade costs (RC) LESS Residual / salvage value (RV) = LCC

So a typical life cycle cost for new sport and recreation facilities could be represented in the following equation:
LCC = (AC – TD) + (OC + RC) –RV

You would have to factor in an additional component – deferred maintenance (DM) – for refurbishment or redevelopment projects.

LCC = (AC – TD) + (DM)+ (OC + RC) –RV

A key question is “which costs are included within the life cycle equation?”

Put simply, the costs to be included within the LCC equation are those that are directly attributed to the ownership, management and operation of an asset.

An example would be air conditioning where you have installation, operation and replacement expenses. Costs such as annual staff salaries, service provision, training associated with corporate functions would not be included.

The effects of deferred maintenance

Local governments own or manage the majority of sporting and recreational facilities in Western Australia, so management is often exposed to a highly competitive and localised budgetary process.

With few exceptions, facility management within local government has not been exposed to the rigour of consolidated asset management planning processes and the associated financial systems.

Maintenance competes for funding with other programs and is often deferred when other projects receive a higher priority. The cost is the increased risk of components failing and potentially increased safety hazards, poor service to the public, higher costs in the future and inefficient operations.

In many cases the deferral of routine scheduled maintenance will mean your asset will deteriorate faster, making it harder for you to meet the deferred maintenance costs.

In terms of the life cycle cost process, deferred maintenance is understood to be the cost of maintenance not committed to maintaining the assets original or desired level of service.

In this context, deferred maintenance is not considered capital renewal.

Overall, the need to identify deferred maintenance will help you to establish the funding responsibilities of all parties in the project proposal.

The process of identifying and quantifying the true cost of deferred maintenance is detailed in Section 2.3 of this document.

When should a life cycle cost be applied?

From DSR’s viewpoint there may be times when it requires a facility project to include a LCCA in the project criterion.

The LCCA may be required when applying for grant funding through either the State Sporting Facilities Plan (SSFP) or the Community Sporting and Recreation Facilities Fund (CSRFF).

As such, these definitions apply:

Facility
a building having 500 square meters or more of usable fl oor space that is heated or cooled by a mechanical/electrical system or any building, system or physical operation which consumes more than 1500 Megajoules (MJ) per square meter per year.”
Project
any works undertaken to design, construct, modify or alter existing or new facilities or plant where the proponent is seeking a grant component for a project total cost in excess of $300 000.
Renovation
a project where additions or alterations exceed 25 per cent of the value or size of a facility, particularly if it will affect an energy system.
Energy system
includes, but is not limited to, equipment or measures used to heat or cool the facility, heat water, or generate electricity.

It is up to the public agency or sporting organisation to comply with these requirements.

Timing of a life cycle cost analysis

The timing of a LCCA is crucial to the long–term success of a facility. In contemporary project management the concept and design stages are the greatest opportunities to influence a successful facility structure and operation. The further a project develops, the further opportunities diminish.

For a LCCA to successfully guide decisions about building design or asset replacement it must be completed before systems are selected and approved and construction tenders are awarded.

  • Future facilities proposals submitted seeking CSRFF support of more than $100 000 are likely to be required to submit a LCCA to support the application.
  • All State Sporting Facilities Plan projects will also need to submit a LCCA.

The image depicted at figure 1.0 demonstrates the optimum time to positively reduce life cycle and project costs associated with any project is at the feasibility study stage. This opportunity greatly diminishes as we move along the life cycle axis. It can be seen from this schematic that effort focused at the feasibility and planning stages can greatly improve the “over the life” performance of an asset.

Figure 1.0 demonstrates the optimum time to positively reduce life cycle and project costs associated with any project is at the feasibility study stage.

Requirements in funding applications

The aim of this guide is to reinforce the concept of whole of life costs for the practitioner to deliver better project decisions. LCC is a valuable and powerful tool that can be used to gain support for the preferred project option.

Many people across the sport and recreation industry have considered the lowest construction cost as being the best alternative. The LCC approach encourages proponents to focus decisions on a developed life cycle cost regime to reduce energy consumption, maintenance requirements and ongoing operational costs.

The adoption of a life cycle cost approach will be necessary when applying for public funds to assist in your project, renovation or construction. An analysis should conform to the requirements set down in this guide before a contract is let for an improvement or construction of a public facility. Should an analysis not be possible, a written submission should be lodged with DSR outlining the circumstances.

The minimum measures to be analysed in a life cycle cost analysis will include;

  1. the equipment used to heat or cool the facility;
  2. equipment used to heat and/or treat water;
  3. on–site electric/gas/other generating equipment;
  4. the building fabric;
  5. the equipment used to maintain the surface/s; and
  6. any major plant or equipment.

Life cycle cost principles

There are four primary principles to consider when assessing life cycle costs.

  • Recognise that a facility development project begins at the concept and preplanning stage and is complete when the asset is sold or the site returned to its original condition.
  • Examine the full cost of each project component across the life of a project rather than choose the cheapest option. This may mean a higher initial outlay but lead to reduced ongoing operational, maintenance and disposal costs and a net lower total ownership cost.
  • LCCG considers all of the economic and financial costs associated with constructing, procuring and operating a facility at a level for which it was originally planned.
  • Developing a life cycle cost analysis is an intrinsic part of your overall asset management strategy.

Design and Development

Analysis procedure

The life cycle cost analysis procedure considers the option of selecting from a set of alternatives, the building design or plant with the lowest whole of life cycle cost.

The design and development aspect of the project analysis procedure recognises that many of the facilities that will provide future sporting and recreational services already exist.

Consideration of funding applications for sport or recreation facilities will fall into two categories:

  1. New sporting or recreation facilities (Greenfields).
  2. Refurbished or redeveloped sporting or recreation facilities (Brownfields).

New sporting or recreation facilities

A Greenfields project for new facilities provides the facility owner the greatest opportunity to minimise the total cost for construction, operation and maintenance through total asset management strategies.

This can be achieved through the adoption of an integrated facility asset management program early in the development stage of a new facility (see figure 1.0). The issue of deferred maintenance typically does not encumber Greenfields projects and consequently the project manager can adopt maintenance and budgetary projections with a greater level of confidence.

The format for LCCA reports shall be similar to the format of these guidelines that have been adapted from Australian Standard for Life Cycle Costing. Information is to be clearly presented and understandable to all parties in the process (facility, financial and technical).

LCCA reports are to be stand–alone documents containing all support documentation and be capable of independent review.

The analysis process for either a new or refurbished facility must factor all of the costs associated with the concept planning, design, documentation, tendering, construction/modification, operation, maintenance and eventual decommissioning of the facility. The Greenfields application will clearly identify rights and responsibilities of all parties involved in the project and detail all estimated cost exposures over the life of the project.

Refurbished or redeveloped sporting or recreation facilities

Brownfields projects are those where submissions are made for existing facilities to be upgraded or refurbished or a new facility developed on a site currently being used for other purposes,

Facilities funding processes (both capital and operating) for existing local government facilities are typically exposed to the pressures of annual budget bids in a very competitive financial environment. Exposing existing facilities to this style of budgetary process may lead to inadequate maintenance funding that ultimately results in their premature deterioration.

The dangers of a competitive budgetary process might include a lowering of priorities being placed on routine and scheduled maintenance for existing facilities, and as a result – a “deferred maintenance” debt.

When calculating the deferred maintenance exposure, a facility manager needs to undertake a facility condition assessment (refer to the Asset Management Guide for a sample template).

This process begins with a multi–disciplined team conducting a thorough inspection of the facility. If all systems of the facility are being included in the facility plan, the team should include an architectural representative and structural, mechanical and electrical engineers. Where this is not practical due to budgetary constraints, qualified staff within your organisation should conduct the process.

If the scope of the plan is being limited, then a representative of only those disciplines to be included is required. In all cases, the inspection team can be the owner’s personnel, external consultants or a combination of the two. The scope of the plan can also be expanded to include room fixtures, fittings and equipment where knowledgeable personnel are available. Other specialists such as gas testing specialists or roofing inspectors may also be added to the team as appropriate. In all cases, the inspectors must be experienced and knowledgeable practitioners in their field.

In most cases, the inspection is entirely visual and therefore the inspectors are called upon to make value judgements by extrapolation from their observations. Where necessary, more invasive and preferably non– destructive methods may be employed to gain better insight into the condition of the facility.

For ease of inspection, each discipline (i.e. architectural, mechanical) is divided into a number of individual components. The mechanical systems for example can be divided into eight basic components that are;

M01
Site Services
M02
Plumbing
M03
Heating
M04
Ventilation
M05
Cooling
M06
Fire Protection
M07
Gases
M08
Miscellaneous
Each of these components is then further divided into sub–components. Plumbing for example could have the following components;
M02 Plumbing
M0213 Storm Drainage
M0214 Plumbing Fixtures
M0215 Special Systems

The data gathered with respect to the deferred maintenance deficiencies will include building component and sub–component which includes a sequential reference number and a deficiency rating, location and description.

A deficiency repair cost will be added later. The deficiency rating system is flexible and can be adjusted to meet specific project needs. Typically, a process would use a rating system from one to five based upon the relative level of disrepair and the effects on the overall facility, with one being poor to catastrophic and five being in a good state of repair. A numeric rating of one would be for aspects that contravene code, health, and regulation or Act violations – thus requiring immediate attention.

The costs apportioned for remedial repair (including regional adjustments) are to be provided by a quality surveyor or qualified contractor and have the capacity to be reviewed in accordance with a recognised industry building estimates publication such as Rawlinsons Australian Construction Handbook.

The purpose of undertaking this procedure is to identify the true cost exposure for the various funding bodies and also gather valuable baseline data for the formulation of a fully integrated asset management plan.

In each case the analyst has to consider design alternatives for the domestic/commercial hot water system, lighting system, combinations of building envelope–HVAC (heating, ventilation, and air–conditioning) systems, pool design, pool heating, court surfaces etc.

When applicable, the analyst is to consider design alternatives for on–site electricity generation. Each analysis is to be based on a 20–year study period. In order to be considered as an effective investment, an energy application project should have a simple payback period of five years or less.

The analysis methodology must consider the relationship between energy–using systems. When the amount of energy consumed by one system impacts the energy consumed by another, this interaction must be carefully considered in the analysis. The accepted methodology is for the analysis to first evaluate independent systems, followed by those systems that interact. A particularly useful reference for life cycle costing procedures is the Australian Standard for Life–Cycle Costing

Time value of money

A key concept of the life cycle analysis equation is that of the time value of money.

The challenge in determining the best whole of life financial option is to achieve a position where the various options under consideration can be fairly evaluated. When considering various proposals, you will be faced with comparing capital and operating costs that are expended at different times. In evaluating the financial impacts of the various alternatives all costs for each option under consideration are expressed in “today’s dollar value”.

This provides the basis to accurately judge the costs and benefits associated with various alternatives.

The definition given: “A concept that acknowledges that money changes value over a period of time; that a sum of money today is worth more that the same sum of money at a future date, because of the fact that the money received now can be invested to earn interest” considers the value of money invested in future cash flows.

In order to better understand the issue, examples have been provided at page 25. Each option considers the replacement of an air conditioner and factors the purchase cost and the life cycle annual maintenance and running costs. The present values chart at page 36 shows the future value of a dollar at a nominated discount rate.

The example cites a discount rate of 12% for air conditioners of varying qualities. Option one considers an air conditioner of lesser quality that requires replacement at more frequent intervals and has a higher annual running and maintenance cost. Conversely, option two considers a more expensive unit requiring a lesser level of annual maintenance and running costs. Due to reliability, over the period considered (30 years) option two requires replacement once at year 15.

The result demonstrates that the total present value of installing, operating and maintaining an air conditioner of the size considered is significant over a thirty–year period. Option 1 demonstrates that the lesser value investment system costs at present day values a total life cycle cost of $468 013. Option 2, whilst being a high initial cost demonstrates a life cycle cost of $413 689. These examples shows that option 2 delivers a better whole of life cost benefit of $54 324.

The aim of these examples demonstrates the time value of money and how investments may be fairly compared using an appropriate discount factor at today’s dollar value.

Design and Development

Analysis procedure

The life cycle cost analysis procedure considers the option of selecting from a set of alternatives, the building design or plant with the lowest whole of life cycle cost.

The design and development aspect of the project analysis procedure recognises that many of the facilities that will provide future sporting and recreational services already exist.

Consideration of funding applications for sport or recreation facilities will fall into two categories:

  1. New sporting or recreation facilities (Greenfields).
  2. Refurbished or redeveloped sporting or recreation facilities (Brownfields).

New sporting or recreation facilities

A Greenfields project for new facilities provides the facility owner the greatest opportunity to minimise the total cost for construction, operation and maintenance through total asset management strategies.

This can be achieved through the adoption of an integrated facility asset management program early in the development stage of a new facility (see figure 1.0). The issue of deferred maintenance typically does not encumber Greenfields projects and consequently the project manager can adopt maintenance and budgetary projections with a greater level of confidence.

The format for LCCA reports shall be similar to the format of these guidelines that have been adapted from Australian Standard for Life Cycle Costing. Information is to be clearly presented and understandable to all parties in the process (facility, financial and technical).

LCCA reports are to be stand–alone documents containing all support documentation and be capable of independent review.

The analysis process for either a new or refurbished facility must factor all of the costs associated with the concept planning, design, documentation, tendering, construction/modification, operation, maintenance and eventual decommissioning of the facility. The Greenfields application will clearly identify rights and responsibilities of all parties involved in the project and detail all estimated cost exposures over the life of the project.

Refurbished or redeveloped sporting or recreation facilities

Brownfields projects are those where submissions are made for existing facilities to be upgraded or refurbished or a new facility developed on a site currently being used for other purposes,

Facilities funding processes (both capital and operating) for existing local government facilities are typically exposed to the pressures of annual budget bids in a very competitive financial environment. Exposing existing facilities to this style of budgetary process may lead to inadequate maintenance funding that ultimately results in their premature deterioration.

The dangers of a competitive budgetary process might include a lowering of priorities being placed on routine and scheduled maintenance for existing facilities, and as a result – a “deferred maintenance” debt.

When calculating the deferred maintenance exposure, a facility manager needs to undertake a facility condition assessment (refer to the Asset Management Guide for a sample template).

This process begins with a multi–disciplined team conducting a thorough inspection of the facility. If all systems of the facility are being included in the facility plan, the team should include an architectural representative and structural, mechanical and electrical engineers. Where this is not practical due to budgetary constraints, qualified staff within your organisation should conduct the process.

If the scope of the plan is being limited, then a representative of only those disciplines to be included is required. In all cases, the inspection team can be the owner’s personnel, external consultants or a combination of the two. The scope of the plan can also be expanded to include room fixtures, fittings and equipment where knowledgeable personnel are available. Other specialists such as gas testing specialists or roofing inspectors may also be added to the team as appropriate. In all cases, the inspectors must be experienced and knowledgeable practitioners in their field.

In most cases, the inspection is entirely visual and therefore the inspectors are called upon to make value judgements by extrapolation from their observations. Where necessary, more invasive and preferably non– destructive methods may be employed to gain better insight into the condition of the facility.

For ease of inspection, each discipline (i.e. architectural, mechanical) is divided into a number of individual components. The mechanical systems for example can be divided into eight basic components that are;

M01
Site Services
M02
Plumbing
M03
Heating
M04
Ventilation
M05
Cooling
M06
Fire Protection
M07
Gases
M08
Miscellaneous
Each of these components is then further divided into sub–components. Plumbing for example could have the following components;
M02 Plumbing
M0213 Storm Drainage
M0214 Plumbing Fixtures
M0215 Special Systems

The data gathered with respect to the deferred maintenance deficiencies will include building component and sub–component which includes a sequential reference number and a deficiency rating, location and description.

A deficiency repair cost will be added later. The deficiency rating system is flexible and can be adjusted to meet specific project needs. Typically, a process would use a rating system from one to five based upon the relative level of disrepair and the effects on the overall facility, with one being poor to catastrophic and five being in a good state of repair. A numeric rating of one would be for aspects that contravene code, health, and regulation or Act violations – thus requiring immediate attention.

The costs apportioned for remedial repair (including regional adjustments) are to be provided by a quality surveyor or qualified contractor and have the capacity to be reviewed in accordance with a recognised industry building estimates publication such as Rawlinsons Australian Construction Handbook.

The purpose of undertaking this procedure is to identify the true cost exposure for the various funding bodies and also gather valuable baseline data for the formulation of a fully integrated asset management plan.

In each case the analyst has to consider design alternatives for the domestic/commercial hot water system, lighting system, combinations of building envelope–HVAC (heating, ventilation, and air–conditioning) systems, pool design, pool heating, court surfaces etc.

When applicable, the analyst is to consider design alternatives for on–site electricity generation. Each analysis is to be based on a 20–year study period. In order to be considered as an effective investment, an energy application project should have a simple payback period of five years or less.

The analysis methodology must consider the relationship between energy–using systems. When the amount of energy consumed by one system impacts the energy consumed by another, this interaction must be carefully considered in the analysis. The accepted methodology is for the analysis to first evaluate independent systems, followed by those systems that interact. A particularly useful reference for life cycle costing procedures is the Australian Standard for Life–Cycle Costing

Time value of money

A key concept of the life cycle analysis equation is that of the time value of money.

The challenge in determining the best whole of life financial option is to achieve a position where the various options under consideration can be fairly evaluated. When considering various proposals, you will be faced with comparing capital and operating costs that are expended at different times. In evaluating the financial impacts of the various alternatives all costs for each option under consideration are expressed in “today’s dollar value”.

This provides the basis to accurately judge the costs and benefits associated with various alternatives.

The definition given: “A concept that acknowledges that money changes value over a period of time; that a sum of money today is worth more that the same sum of money at a future date, because of the fact that the money received now can be invested to earn interest” considers the value of money invested in future cash flows.

In order to better understand the issue, examples have been provided at page 25. Each option considers the replacement of an air conditioner and factors the purchase cost and the life cycle annual maintenance and running costs. The present values chart at page 36 shows the future value of a dollar at a nominated discount rate.

The example cites a discount rate of 12% for air conditioners of varying qualities. Option one considers an air conditioner of lesser quality that requires replacement at more frequent intervals and has a higher annual running and maintenance cost. Conversely, option two considers a more expensive unit requiring a lesser level of annual maintenance and running costs. Due to reliability, over the period considered (30 years) option two requires replacement once at year 15.

The result demonstrates that the total present value of installing, operating and maintaining an air conditioner of the size considered is significant over a thirty–year period. Option 1 demonstrates that the lesser value investment system costs at present day values a total life cycle cost of $468 013. Option 2, whilst being a high initial cost demonstrates a life cycle cost of $413 689. These examples shows that option 2 delivers a better whole of life cost benefit of $54 324.

The aim of these examples demonstrates the time value of money and how investments may be fairly compared using an appropriate discount factor at today’s dollar value.

Standard format for life cycle cost reports

The order of sections and appendices are:

  1. Certification
  2. Executive Summary
  3. Project Scope
  4. Life–Cycle Cost Model Description
  5. Life–Cycle Cost Analysis
    1. Building Fabric
    2. Domestic / Commercial Hot Water
    3. Lighting
    4. Building Envelope and HVAC System
    5. On–Site Electric Generation
    6. Water Sourcing / Treatment
    7. Flooring / Surface
    8. Recommended Systems
  6. Appendix

Section 1: Certification

The first form required is the Certificate of Responsibility. The report must be certified by the Project Principal and notarised by either a registered Architect or a licensed Professional Engineer in Australia.

DSR has adopted the codified version of ASHRAE Standard 90.1–2001 as its energy code for recreational buildings, so this is the base case for each alternative studied. The analyst is to answer the question at the bottom of the form to verify that all design options in the report comply with the energy code.

Table 1.0 Certificate of responsibility

You can find a download link for a sample certificate of responsibility form in the resources sidebar located at the top of this part of the guidelines.

Section 2: Executive summary

The Executive Summary is to include a brief synopsis of the purpose of the report, a summary of important findings of the report, a description of important assumptions and special design considerations used in the analysis and system selection recommendations based on lowest life cycle cost.

The Executive Summary must also provide an annual energy budget for the facility based on the assumptions outlined in table 3.3. The LCCA Summary Form must be provided in the Executive Summary (refer to the next page).

The LCCA Summary Form tabulates the findings of each system alternative evaluated in the report. The LCCA Summary Form also provides the derivation for the annual energy budget for the base case and for the facility alternatives yielding the lowest life cycle cost. The derivation of the annual energy budget should not double count energy consumption data, such as lighting energy that is often also included in HVAC energy consumption calculations.

Specifically with regard to asset renewal, refurbishment or reconstruction projects the Executive Summary must identify the deferred maintenance backlog calculations to establish the baseline funding position.

Table 2.0 life cycle cost analysis summary

You can find a download link for the sample life cycle cost analysis summary table in the resources sidebar located at the top of this part of the guidelines.

Section 3: Project Scope

This section defines the scope of the project (refer to the following page). The project identification form is divided into four topic areas including a project summary, organisation contact information, design professional contact information and special design considerations. Information that is provided is to be as complete and accurate as possible.

The Project Summary section includes general information about the facility such as the location as well as specific building design information. Many of the items are self– explanatory and some only require a yes or no answer, however, an explanation for a few of the items is provided below.

Building Type
describe the use of the building (such as aquatic, hall, courts etc.).
Slab–on–ground
does the building consist of slab–on–ground construction?
Levels below ground
does the building have a basement or a partially exposed basement?
Mechanical cooling
is the building mechanically cooled?
Renewable resources used
are solar collectors (photovoltaic or solar thermal), wind turbines, etc. intended for the project?
On–site electric generation
is electric generation intended for the project, including engine generators, wind turbines, etc.?
Estimated annual occupancy hours
what is the intended annual occupancy hours of the primary tenant? If there is no primary tenant, estimate total tenant occupancy hours.

The final section provides space to describe special design considerations requested by the proponent organisation (Local Government Authority/Sporting Organisations). Design constraints that affect system alternatives selection must be documented here as well as in the report. This section should also include a statement of the analysis objective, operating and support scenarios, assumptions, constraints and alternative courses of action considered.

Table 3: Project Identification

You can find a download link for the sample project identification table in the resources sidebar located at the top of this part of the guidelines.

Section 4: Assumptions Form

The Assumptions Form Table 4.0 provides a central location for documenting assumptions made in the analysis.

Information that forms the basis for inclusion on the assumptions form considers the expected recurrent (operating) cost for the LCC and briefly identifies how the building design has been managed to reduce these costs or enhance service provision. Assumptions regarding initial energy rates used in the analysis are also to be provided. The energy rates should be entered for both summer and winter as applicable. On–site electricity generation should also include information about utility buy back rates.

The next area provides a location to document other assumptions made in the analysis. Examples of other assumptions include the quantity of domestic hot water used annually, maintenance costs, residual value or salvage costs.

The final area on the Assumptions Form provides a location to document references used. These references include, but are not limited to, those used to perform calculations and those used to estimate construction costs. Additional pages may be added as necessary to list all of the assumptions and references.

You can find a download link for a sample assumptions form in the right sidebar located at the top of this part of the guidelines.

Section 5: Life Cycle Cost Analysis Model

The analysis of each option must consider all of the phases associated with the development and delivery of the project and include costs associated with:

  1. Concept and Definition Stage includes market, research, project management, concept and design analysis product specification analysis.
  2. Design and Development Stage includes costs for project management, system and design engineering, design documentation, prototype fabrication, testing and evaluation, productivity engineering and planning, vendor selection, demonstration and validation, quality management and design and development.
  3. Manufacturing and Installation includes costs associated with non–recurring manufacturing or installation costs, engineering and operational analysis, construction or purchase, production tooling and test equipment and operational totals
  4. Maintenance includes costs associated with training, spare parts and consumables, equipment and facilities, contract services, IT support, routine maintenance, major programmed maintenance and breakdown maintenance
  5. Support Services includes corporate management, administrative overheads, insurances, general support services, system shutdowns, disassembly and removal, recycling or safe disposal, site remediation and product residual value
  6. Residual Value or Salvage is the value of the asset at the completion of the life cycle. The residual value is considered the net position of the income generated by the sale of the asset, less the cost of site remediation. The residual value can either be the agreed value (asset left ‘in–situ’) or the realised value of the asset (‘removal of asset’). Salvage is considered the realised value of the unimproved asset.

Life cycle cost analysis (LCCA) model

An example of the Life Cycle Cost Analysis model is appended at pages 26 to 35. The LCCA has been formed on the basis of the following conventions and concepts.

The base convention is that the model provided by DSR does not incorporate any direct capital costs. The costs entered into the model that affect the financial result should only be operating costs and be directly related to the costs of the management and maintenance of the facility or asset.

Each of the component cost option sheets has been developed to reflect the project’s life cycle phases, including concept and definition, design and development, manufacturing and installation, maintenance, support services and gross revenues. Each of these areas has been further identified into costs areas identified by either capital costs or operating costs.

Concept Definitions
Operating Costs:
The day–to–day expenses incurred in the running of an organisation such as sales and administration, maintenance and training. These costs are also variable and do not add to the book value of an asset.
Capital Costs:
Typically those costs applying to the physical (substantial) assets of the organisation. Traditionally this was the accommodation and machinery necessary to produce the enterprise’s products or services. Capital Costs are the purchase or major enhancement of fixed assets, for example computer equipment (building and plant) and are often also referred to as ‘one–off’ costs.
Time Value of Money:
A concept that acknowledges that money changes value over a period of time; that a sum of money today is worth more that the same sum of money at a future date, because of the fact that the money received now can be invested to earn interest.
Life Cycle Cost:
Encompasses all costs associated with the product’s life cycle. These include all costs involved in acquisition (research and development, design, production and construction and phase–in), operation, support and disposal of the product.

The model has been developed on a multi sheet MS Excel spreadsheet format. Data provided and developed for the options under consideration are entered under the individual “Component Cost Option” sheets. The consolidated LCCA model is a protected work sheet that serves to reflect the consolidation of each of the component costs option sheets.

Before we consider the model, we must understand the concept of Net Present Value (NPV).

Consider the following.

“When you wish to know the value of a used car, you would look at prices in the second–hand car market. Similarly, when you wish to know the value of a future cash flow, you would look at prices quoted in the capital markets, where claims to future cash flows are traded. (Just remember that those high profile Investment Bankers are just second–hand cash flow dealers. If you can buy cash flows for your shareholders at a cheaper price than they would have to pay in the capital market, you have increased the value of their investment”.

The example provided is that of a typical recreation centre under consideration by a Local Government Authoruty. The example is based upon the premise that total funding for the centre will be provided by the local government from reserves.

The LCCA demonstrates that the cost of a facility commences at the preplanning stage with the concept and defi nition. The period between the concept stage and the commencement of operations of the facility is nominally three years.

The LCCA example provided considers three options.

Option one; provides the base case with initial capital construction costs of $1 985 000 and a 25% refurbishment of the facility at year 10.

Option two; provides a 10 percent increase in initial capital costs ($2 183 000) with a 25% refurbishment at year 15. The increase in initial capital costs assumes the use of higher quality components (e.g. air conditioning) and therefore a reduced requirement for refurbishment until a later period.

Option three; considers a 10% reduction in initial capital cost ($1 786 500) with an expanded refurbishment program. Option three assumes a commitment to lesser quality components and therefore delivers a requirement to refurbish at year seven and again at year 17.

Net revenues are entered into each component costs option, providing an annual fi gure of cost centre income less the annual operating costs for that cost centre. For the example, under consideration the “cost centre” is the recreation centre. The costs do not include either the facility management costs or the corporate overheads as they are a direct facility consequential cost and are recorded separately in the model.

Each refurbishment delivers additional net revenue income of $30 000 per annum as this anticipates improved services.

It will be noted that the model features a series of input cells that are colour coded green. This denotes that these costs (typically capital) are not included within the model analysis.

Input data is considered for each of the life cycle phases and entered at each option input sheet. For this example, the annual costs included in the input data are kept consistent across the life of the asset. Careful consideration needs to given to the classification of the cost being entered into the model. It is considered fundamental that the cost must be identified as either capital or operating prior to entry into the model. As this model is based on the NPV result and does not consider the direct capital costs (rather the amortised interest and depreciation costs) it is vital that the operating costs relate directly to the management of the building without providing any betterment to the value of the asset. Should the cost apportioned result in an improvement to the facility asset or structure, this cost would be considered capital.

The model has provided for the inclusion of interest charges that is based upon the position that equivalent opportunity costs for the funds employed for the project must be recorded. As the NPV does not consider the initial capital costs, annual interest equivalents must be included. This is irrespective of the origin of the capital employed for the project, whether from reserves, borrowings or investor subscriptions. Similarly, depreciation charges are apportioned for the replacement costs associated for both the building fabric and the consolidated internal asset component that make up the building fabric. It should be noted that at each refurbishment event for each option, the interest and depreciation costs are increased to reflect the additional investment. An accurate reflection of the depreciation of any building under consideration may be sourced in the Rawlinsons Australian Construction Handbook.

The model demonstrates the cash flows associated with the development, management and refurbishment of the facility.

The cost projections automatically feed into the consolidated LCC model initially to the consolidated option values section of the page. At this stage, these figures remain uninflated. These figures are then exposed to the inflation component of the model, which in essence are the operating cost, less net revenues multiplied by the inflation rate at the value of the period in which the costs are considered. This process occurs for all of the costs and revenues for each option over the asset life period being considered. These figures are then exposed to the effects of the nominated discount rate, which may be changed on the consolidated LCC model. This model also provides for NPV calculations that consider project sensitivities. Considerations of these sensitivities or risks are undertaken by the application of higher and lower discount rates.

The following observations are made of the example provided.

As the NPV provides information about the net increase in worth provided by the project (exclusive of the capital costs), the cash flows under support services for each option includes interest and depreciation costs.

Observations also reveal that major programmed maintenance is calculated under the Maintenance category. This operational requirement similarly reduces net revenues in those periods by $30 000.

The net result of these options recommends that a commitment to option two would provide the best result for the council. The option suggests a higher capital cost, though a reduced requirement for refurbishment until year 15. The result is that option two at a discount rate of 12 percent delivers an NPV of –$859 102. This figure represents the net difference between the inflated and discounted costs and revenues accumulated over the period of the life cycle.

Section 6: Life Cycle Component Analysis

The life cycle cost calculations for each alternative are to be presented in this section of the report. The analyst has the option of using the form provided in the Appendices of these guidelines or providing a printout of computer analysis for each case.

DSR has developed a multi–layered spreadsheet that provides the primary shell to create a three–option comparison of alternatives. The spreadsheet provides for the development of project costs, delivering the net present value of each option in addition to two sensitivity tests.

Within the manufacturing and installation segment of the LCC analysis, the following calculations need to be factored with respect to water treatment, lighting, building envelope and HVAC systems and electricity generation.

The analysis of each structure/system (facility, domestic hot water, lighting, envelope/HVAC, and electricity generation) should begin with a base case that would be expected to provide the lowest constructed/installed cost but, due to lower effi ciency, usually result in high operating and life cycle costs. The other options should provide a tradeoff of higher constructed/installed cost for lower operating and (potentially) lower life cycle costs. In each case, the system with the lowest life cycle cost must be recommended.

Commercial and/or Domestic Hot Water

Select three commercial/domestic hot water systems and document the rationale used to justify their consideration for the facility. Systems selection could compare varying efficiency levels, systems using different fuels, a central system versus a distributed system, a solar–assisted versus a non–assisted system, a variety of control strategies, or large equipment versus a modular installation, for example.

Lighting

Choose three lighting systems for the primary use of the building (offices, courts or gym rooms for example) and document the rationale used to justify their consideration for the facility. Include a variety of lamp types, ballast features, and control strategies.

Building Envelope and HVAC (Heating, Ventilation and Air Conditioning) Systems

Choose three building envelope types and three HVAC systems and document the rationale used to justify their consideration for the facility. A total of nine building / HVAC combinations should be studied unless this can be shown to be impractical. The design alternatives recommended previously for the domestic hot water system and for the lighting system should be used in the analysis of the envelope and HVAC systems.

Building envelope parameters may vary wall and roof insulation type, thickness and window type. HVAC system parameters may vary system type, modular equipment, distribution system type, control strategies, etc.

On-Site Electricity Generation

When applicable, use all of the recommended building systems to evaluate three design alternatives for on–site electricity generation. Potential alternatives include engine generators, micro–turbines, fuel cells, steam turbines, wind turbines, solar arrays (photovoltaic), etc. Alternatively, consideration should be given to purchase electricity from providers that generate green electricity from alternative technologies such as conversion of landfill methane gases to electricity.

Recommended Systems

Briefly note each of the recommended systems, however, most of this discussion should be provided in the Executive Summary. The set of combined systems should be used to find the detailed energy use prediction on the LCCA form in the Executive Summary.

Section 7: Appendix

The report appendix is to include supporting information. The contents of the appendix should include sketches of the planned building layout, energy use calculations, and any other pertinent information necessary to document the recommendations made.

Appendix A

At the end of this section you can find a download for a sample spreadsheet which details the suggested economic lifetimes of various mechanical systems, such as air compressors, centrifugal chillers and furnaces.  

3.0B Simple LCC Analysis

At the end of this section you can find a download for an example air conditioner LCC Analysis Spreadsheet.  

Present and Future Dollar Value

At the end of this section you can find a download for a table representing the present dollar value rate per year and the future values of $1 over a 30 year period.

Glossary of terms

Appreciated historical value
The calculation of the historic value of an asset expressed in current dollar values.
Betterment
An improvement of properties that materially increases the property’s serviceability or useful life and as a consequence asset register value.
Building element
An integral part of a building — such as a roof, wall or service (electrical, plumbing etc.)
Capital renewal
The application of capital funding to restore an asset to an agreed service standard
Capital replacement value
The expressed value of the current cost of replacing an asset
Condition assessment report
A reporting process that critically reviews the condition and performance of assets and sub assets
Deferred maintenance
Maintenance that was not performed when it should have been or was scheduled to be which, therefore, is put off or delayed for a future period.
Deprival cost
The cost an organisation would incur if it were deprived of an asset and was required to continue delivering the service or program otherwise using the asset.
Discount rate
Rate used to calculate the present values of future cash flows.
Financial condition index
Defines the related costs of required repairs identified in a condition assessment report.
Gross Floor Area (GFA)
The total constructed area of a building measured from exterior walls.
Historical asset value
The original book value of the asset under consideration.
Maintenance
Described as the act of keeping fixed assets in an acceptable condition. It includes preventative maintenance, normal repairs, replacement of parts and structural components or other activities needed to ensure preservation of the asset in a condition that continues to provide an acceptable level of service.
Net present value
A projects net contribution to wealth i.e. present value minus initial investment (capital).
Opportunity cost
Expected return that is foregone by investing in a project rather than comparable financial securities
Safe and acceptable
Accommodation that complies with current health and safety standards and requirements for modern standards of sports provision.
Present value
Discounted value of future cash flows
Technical condition index
Refers to the technical condition of an asset or sub asset in a condition assessment report.

Bibliography

American Society of Heating, Refrigerating and Air-Conditioning Engineers. (1989). Energy effi cient design of new buildings except low-rise residential buildings. United States: ASHRAE.

Ballesty, S., Orlovic, M. (2004). Lifecycle costing and facility management. Facility Management 12 (2), 28-32. Department of Sport and Recreation. (2004). Asset management guide: a guide for sport and recreation facility owners and managers. Perth, Western Australia: Department of Sport and Recreation.

Rawlinsons Construction Cost Consultants and Quantity Surveyors. (Eds.) (2005). Australian construction handbook 2005. Perth, Western Australia: Rawlhouse Publishing Pty Ltd.

Standards Australia. (1999). Life cycle costing: an application guide. (ANZS 4536:1999). Sydney, New South Wales: Standards Australia.

More information

Facilities Planning Coordinator
Department of Local Government, Sport and Cultural Industries
Telephone 61 8 9492 9825
Facsimile 61 8 9492 9711
Email the department
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  • sport
Categories :
  • Sport and recreation
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More information

Kent Burton
CSRFF Officer
Telephone 61 8 9492 9759
Facsimile 61 8 9492 9711
Email Kent Burton
Page reviewed 09 July 2019