34.5 Total-Cost-of-Ownership Decision Framework

The University of Iowa employs a broad project decision-making framework based on the total-cost-of-ownership. The total-cost-of-ownership is a composite of financial obligations consisting of the costs for the initial capital design and construction; operations and maintenance; utilities and energy; renewal; and decommissioning or demolition. To take future costs into consideration and aid decision making during the design and construction phases, the University has established the following design standards, policies, and procedures.

  1. Commissioning. All new facilities and major renovations shall be commissioned. Commissioning is a process that assures that building systems are designed, installed, functionally tested, and capable of being maintained and operated based on the defined expectations. Project budgets shall support the cost for commissioning.
  2. Utilities capacity and infrastructure growth funding. All capital project budgets requiring approval of the Board of Regents, State of Iowa, shall include contributions to a utilities infrastructure growth fund for central plants, where connection to central systems is available. Central plants provide the most cost-efficient production of utilities due to economies of scale. The offset amount apportioned to a capital project will be no more than the estimated cost to install gas-fired boilers and electric-powered chillers in the building, sized to meet building capacity, including 50 percent redundancies, which is the minimum redundancy for a stand-alone system. This offset contribution is to cover the cost of increased capacity in the central plants necessary to meet the demand created by the new and renovated facilities on campus.
  3. Life cycle cost investments. All new construction and major renovations of facilities that are heated or cooled by a mechanical or electrical system shall implement the recommendations of a life cycle cost analysis. Project budgets for new construction and major renovations must support meeting the best overall life cycle investment. Minor renovation projects must invest in conservation improvements up to a seven-year payback level. The provisions of this section may be appealed through the Capital Projects Review Committee.
  4. Energy rebates. For General Education Fund (GEF)-supported facilities, the energy rebates offered on individual projects will be placed in a University energy conservation account and will be reinvested to further other campus conservation efforts that will help offset the demand created by the new project. For non-GEF facilities, rebates shall be managed by the auxiliary or by University of Iowa Hospitals and Clinics, and must be used to reinvest in energy conservation opportunities.
  5. Emergency power. All capital projects requiring emergency power shall include the design and installation of an emergency generator, ancillary support equipment, and connections in the scope and budget of the project. Where effective emergency power is available from a central plant, emergency power shall be furnished by the central plant and the project shall include budgeted, capital contributions to the utility enterprise for that emergency power service. The offset amount apportioned to a capital project will be no more than the estimated cost to install an emergency power generator at the building site.
  6. LEED certification. The goal for all new major building and major capital renovations initiated after January 1, 2009, is to meet or exceed the U.S. Green Building Council's guidelines for silver level LEED certification. A major building is defined here as a new building or addition over 20,000 gross square feet, and a major capital renovation is defined as construction that will cost more than 50 percent of the facility's replacement value. LEED Silver refers to a certificate program by US Green Building Council's Leadership in Energy and Environmental Design (LEED) Green Building Rating SystemTM. When financially prudent, sustainable best practices in building design and site planning should be incorporated into non-major project construction and renovations.