The 2022 condominium-related restoration-construction-inflation issue is even more challenging than it sounds. Ongoing challenges to capital replacement project costs are wreaking havoc on already stressed reserve funds and causing anxiety for boards and property managers throughout the province.

There are tried and true ways to decrease imminent costs of capital projects:

1. Spend Less: Defer that work. Assess the urgency of the need by way of inspection and, where appropriate, provide immediate maintenance to extend service life—even if beyond its reasonable payback.

2. Spend More: Take advantage of the economies of scale to group projects, where appropriate, to decrease overall unit costs. Replace two roofs, instead of just one.

These practices seem simple enough, but where else can we save in the current environment? Everyone is having to think outside the box to squeeze pennies into hundred-thousand-dollar bills. Here are a few of the non-conventional approaches to limit capital expenditure costs:

Resist the urge to throw in the kitchen sink

Is your corporation replacing a parking podium membrane; and because they’re onsite you’d like the contractor to replace the parking stairwell roofs to minimize overall disruption? Maybe that’s a good plan to limit the amount of construction traffic, but the contractors who perform garage membrane repairs are not the same as those who typically replace conventional flat roofing. By putting two separate projects under the same contract, you’re requiring that one contract to carry a marked-up sub-trade to execute the part of the work they are less familiar with. If the project is severable, let’s stop trying to make roofers use jackhammers.

This idea can be extended to projects where the work typically would go together. Envision an asphalt walkway replacement that may typically include landscape reinstatements adjacent to the walkways. Asphalt contractors have been doing landscaping next to the walkways they’ve ripped out for years, but what do asphalt contractors really want to do? Asphalt.

More and more, corporations have found cost savings by taking these slightly trickier components of the projects out of the principal work and discussing and negotiating landscaping touch-ups with their regular landscape maintenance crew. The savings associated with removing the landscaping from the asphalt project far outweigh the cost of performing and coordinating the landscaping repairs with their regular service providers.

Do you actually need that middle-person?

Although construction consultants can form an integral part of protecting a corporation’s interests and providing independent analysis, in some projects, they cannot provide the level of insight that might be necessary for most cost-effective capital projects. Design-builders in corridor refurbishment projects, for example, have a greater control over initial budget estimates, deliveries, and scheduling than a typical construction consultation can.

When the corporation engages directly with a design-builder, they’re able to see a little more transparency into the decisions and the approach of the contractor. This can be valuable when a project runs into cash-flow and budgetary considerations as the design-builder is able to provide more real-time analysis into how changes will affect costs and offer unique strategies to control them before they snowball.

Like-for-kinda-like

Be creative when interpreting whether an element is required to be replaced with its direct equivalent. For example, silicone caulking is only slightly more expensive than polyurethanes, but has a considerably longer service life. When you’re looking at a $1M polyurethane like-for-like caulking replacement, consider a reasonably comparable $1.05M silicone to save money on the deferred funding obligation.

As polyurethanes breakdown in UV light and silicones do not, the former will be factored into your reserve funding plan with a service life of 3-5 years shorter than the latter. In large enough projects, this decrease in funding requirements will offset the additional capital expenditure in a single year.

These options are not truly zero-cost. They come at the expense of a little more design effort up front or additional time expenditure and attention by building operators to execute. Implementing these scenarios means moving away from the standard design-bid-build model or blurring the line between operating expenses and capital expenditures during projects. But given the financial climate, this may be quite beneficial. Every project is different. To protect buildings, boards, managers, and consultants need to consider unorthodox approaches to cost savings as we ride this roller coaster.

Justin Tudor, P. Eng. is president and engineer at Keller Engineering, a building envelope engineering and building science firm that provides building and systems assessment and associated repair and renewal consulting services since 1982. He can be reached at jtudor@kellerengineering.com.