Comprehensive List of Budget Items

In my post, Why is My Project So Far Over Budget,  I point out that early budgets are too low, not so much because estimates are incorrect but because so many items have been left out.

Here’s a checklist from 40 years of memories.  Every time I look at it, I think of more items, but it does illustrate the potential complication of even a seemingly simple project.

Clearly not every item will apply to each project but it is certainly a sobering list when considering the potential cost of a project.  You don’t need to study this, but skim through this list and you likely will find items worth discussing with your project team

Primary Construction Cost

We’ll take the biggest piece of the buget first and reduce it to a single number.  Assume you know approximately how big your project might be and some reliable source has provided and estimate of  per square foot  cost.  For now,  we will leave the process of refining that guess to another post.  Project Area x cost/sf –  that’s your primary consturuction cost

Then…

Add unusual site conditions

  • Sloping site
  • Unusual soils conditions/special foundations/site drainage/land movement mitigation
  • Logistics – Isolated or hard to access site, materials handling issues
  • Adjacent buildings on or near property line

Add special construction

  • Special mechanical/environmental systems
  • Solar and other energy systems
  • Special Audio visual, performance or conferencing facilities

Add infrastructure improvements

This includes the construction cost for installation of all on-site and off-site services.  Includes: Power, gas, electrical, sanitary, drainage, telephone, cable and communications.

Add site improvements

  • Site and/or building demolition
  • Site related work, roads, paving, parking, site lighting, landscape
  • Off-site improvements mandated in your approvals

 Add renovation or work on other existing buildings

  • Un-planned deferred maintenance, critical building infrastructure systems and safety issues
  • Required code correction work
  • Voluntary code upgrades
  • ADA upgrades

This is the Total Construction Cost,  often referred to as the Hard Cost.  It  includes the labor and materials of the general contractor, plus their overhead and profit and all sub-contractors work, including their overhead and profit

And there are still more consruction costs.

Add owner direct costs.  These are still “construction costs” as distinct from soft costs but may not fall under the umbrella of the General Contractor

  • Hazardous materials remediation
  • Work on other parts of the site
  • IT and network systems
  • Audio visual equipment
  • FF&E – Furniture Fixtures & Equipment
  • Art & decor

And now for Soft Costs.  These are the non-construction costs necessary to perform the project.

Basic Architect & Engineering Services.  These are the services that form the core of the architect’s fee.

  • Architect
  • Structural engineer
  • Civil engineer
  • Mechanical engineer
  • Electrical engineer – power, lighting, fire alarm
  • Plumbing engineer – sanitary/storm systems, sprinklers

Add others consultants –  There can be a host of additional engineers and consultants which may be expressed as additional or supplementary services, or even neglected in early stages.

  • Landscape architect
  • Specification writer
  • Cost estimator
  • Acoustic engineer
  • Audio visual engineer
  • Title 24 consultant
  • Green building consultant
  • Model maker, illustrator
  • Computer graphics
  • Hardware consultant
  • Interior design
  • Lighting designer
  • Color consultant
  • Code Consultant
  • Waterproofing consultant
  • Kitchen designer
  • Commissioning consultant

Add owners’ engineers/consultants –  An additional group of professional fees that are most often contracted by the owner and not included in the architect’s fees.

  • Survey
  • Geotechnical engineer
  • As-built drawings
  • Hazardous materials evaluation and abatement supervision
  • Arborist
  • 3rdparty plan check
  • Permit expediter
  • Information technology
  • Security and entry systems
  • Testing & Inspection of structural work

Add permits and fees 

  • Building plan check
  • Building permit
  • Health Department permits

Add planning & entitlement – I consider these as a separate category to normal soft costs above  since they are more dependent on the jurisdiction and  political challenge of the project rather than the nature or size of the buildings.

  • A&E fees
  • Illustrations, models and computer generated graphics
  • Environmental review and EIR
  • Planning review at all levels
  • Application & permit fees
  • Legal
  • Public Relations
  • Mitigation costs

Add utility permit and use permit costs – The hard costs are included above.  These fees, espeically use premit fees can be substantial

  • Gas & electric
  • Water services, domestic and fire
  • Sanitary district, sewer and storm drainage

Add other owner costs

  • Project management or developer fee
  • Cost Estimating
  • Legal – contracts/organizational
  • Contractor pre-construction services – estimating & site investigation
  • Printing & reproduction
  • Builders’ risk insurance
  • Labor & Materials/Bid Bonds
  • Owners administrative costs.  You can assign your costs to the project

Add capital campaign costs

  • Legal
  • Campaign consultant
  • Direct owner expenses
  • Campaign collateral

Add finance costs

  • Legal
  • Appraisal
  • Loan fees
  • Loan servicing
  • Construction phase interest
  • Post construction interest reserve

 Add occupancy, sales or leasing costs

 Add costs to occupy the facility

  • Moving & relocation
  • Early staffing costs
  • Equipment & supplies not otherwise provided in the project budget

Or add costs for sale projects

  • Real estate commissions
  • Other cost of sale
  • Public relations
  • Marketing collateral material
  • Advertising
  • Staging & models

 Or add costs for lease projects

  • Broker costs
  • PR & Marketing

New facility operations cost

I’ll hint at one more area of cost to consider that is more akin to your normal budgeting process.  It’s never too early to begin to understand how your operations budget will be impacted by new or renovated facilities and to update those early estimates as the project progresses.

  • Operational staff
  • Facilities staff
  • Annual maintenance costs & outside contracts for buildings, furnishings and equipment
  • Utility costs
  • Insurance
  • Long term reserve for maintenance and replacements – Where projects address long deferred maintenance, you should establish a reserve in your operational budget or even an annunity for long term maintenance as part of the project budget.

Conclusion

So if you got all the way down here what’s the conclusion?  There is a big list of costs that your project team needs to recognize and manage  right from the beginning, even if, early on, it’s mostly guesswork.  Remember, I don’t know doesn’t mean zero  But it’s equally true that there are many costs that your project team can’t help you with.  Even professionally managed projects can end up with big problems just from leaving things out.