Recapitalization and Capital Renewal Programs

Separate from repairs and maintenance budgets capital renewal programs (also referred to as recapitalization) are aimed at extending the service life of building subsystems. If R&M budgets are to keep subsystems operational during their expected service periods, then capital renewal programs are based on replacement of those subsystems near or at the end of their respective life cycles. Budgeting methods can be a bit uncertain for many organizations because the important technical assumptions may not be fully understood. As a result, a commonly applied solution is formulaic such as a percentage of replacement value. However, these methods can be inadequate when funding is actually needed leading to deferred maintenance and future compounded costs. Conversely, rising inflation of repairs and maintenance costs are sometimes used as the rationalization for premature replacement, when in fact the operational savings could have been realized through alternative solutions.

Supporting your team through the assessments and analyses we have the technical and financial capabilities to appraise existing conditions and develop a planned spending program aligned with your asset management plan and investment goals.

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