Activity-Based Life-Cycle Costing of Public Assets: A Case Study of Schools in Norway

‘State of the Nation 2015’, a Norwegian nation-wide report created by RIF (Association of Consulting Engineers, Norway), concludes that the maintenance backlog for around 30,000 municipal buildings is approximately 1060 billion NOK. Undervisningsbygg Oslo KF (UBF), established in 2002 as a municipal agency, has on the contrary reduced their maintenance backlog with alternative funding of maintenance costs through operational initiatives. Based on the Life-Cycle Costing (LCC) tool Reversed LCC, this paper presents key findings from a study on public asset management, involving case studies featuring four public schools in the municipality of Oslo. This paper concludes that the municipality of Oslo can potentially reduce life-cycle costs based on the recent implementation of activity-based rates in the municipality’s leasing operations between UBF as the landlord, and Utdanningsetaten (UDE) as the tenant. The paper also highlights recommendation of strategic measures for UBF that focuses on activity-based rates for public schools as a measure to enhance the utilization value of public assets over a long period of time.