Home        About       News       Library       Contact
1



Capital Load (CLc, CLf)
The combined total value of all capital projects for a single asset  (or all the assets combined) in a building that are forecast over one of the following time periods:
The capital load is essentially the keep-up costs expressed over a particular time period.

Similarly the operating load (OL) is the combine value of all operating tasks carried out over the same period and energy load (EL) is the exfiltration and infiltration of energy over the same period.



Purpose
The capital load has the following general applications:
  • It is one of the factors to determine the cost of ownership. When the capital load (CL) is combined with the operating load (OL) and the energy load (EL), the owners can estimate their total cost of ownership.
  • It is used to assist in establishing appropriate funding requirements, typically in a reserve study (depreciation report).
  • It is helpful in establishing priorities.
  • It can be useful sometimes in developing risk based maintenance strategies. to help reach life or extend life of the assets.


Examples
Included below are two examples of the capital load:
  • Using a window as an example: Annual or semi-annual washing of the windows is part of the operating load (OL) of the windows; replacement of the sealant around the windows is part of the capital load (CL); replacement of a window vision glass that has been damaged by a wind storm is classes as part of the operating load (OL) since it is an insurable loss funded from the insurance policy within the operating budget; the exfiltration and infiltration of energy through the windows would be considered part of the energy load (EL) of the windows.
  • Using a roof as an example: Cleaning of the roof drains every year over the life of the of is part of the operating load (OL); localized repairs, as required, to address some non-systemic blisters is part of the operating load (OL); replacement of the waterproof membrane at the end of its useful service life is part of the capital load (CL); the loss/exfiltration of space energy through the roof is part of the (EL).


Quantification
The CL should therefore include both renewal projects and major maintenance projects.

A body of literature surrounds the methods of quantification of keep-up costs, which can be organized into two general methodological categories.
The capital load is calculated by the expense model.

Listed below are some of the factors that may impact the capital load:
  • Quality of maintenance to extract the full life from the assets (see: reaching life and extending life)
  • The replacement policy


Analysis and Reporting on Capital Load
The capital load can be presented and reported on in a variety of ways:
In order to use CLc or CLf as a benchmarking tool, the data needs to be normalized over a time period.



Evaluation of the Capital Load
Listed below are some of the merits and limitations of the capital load as an asset management concept:
  • A total quantum that does not provide insight into the distribution of costs over time. The latter is derived from the proximity load (PL).
  • While the enclosure CL is significant it may be given lower priority at some facilities which focus primarily on the performance of their electrical and mechanical system.


Management Principles
Listed below are some of the asset management principles associated with the capital load:


Capital load distributed by system and referenced in both current value (CV) and future value (FV).
Fig. The capital load (CL) for a building distributed by system and represented in both current value (CV) and future value (FV).


Roof replacement is a capital project that typically occurs every 20-25 years.
Fig. Roof replacement is a capital project that typically occurs every 20-25 years and will form part of the capital load of the enclosure system.


1
Fig. The addition of all the capital costs along a strategic planning horizon (purple bars) will equate to the capital load for that period.


1
Fig. Pie chart indicating the distribution of capital costs across the different systems in a building.


Capital load for a single building distributed by system and represented in current value and future value.
Fig. Capital load for a single building distributed by system and reflected in both current value (CV) and escalated to future value (FV).


The capital load distributed across the eight primary physical systems for different types of buildings
Fig. The capital load distributed across the eight primary physical systems for different types of buildings.



I. Care making a futile attempt to remove a capital expenditure from the tactical plan
Fig. I. Care making a futile attempt to remove a capital expenditure from the tactical plan.


I. Care is trying to ensure that inflows match outflows, but this requires cooperation and teamwork
Fig. I. Care is trying to ensure that inflows match outflows, but this requires agreement on long-range stewardship, cooperation and teamwork.

See also:
Classes of Formulas
Reinvestment formulas can be grouped into three general categories, as follows:
Compare with:






(c) Copright Asset Insights, 2000-2013. All rights reserved. - "Insight, foresight and oversight of assets" Google