As college campuses unveil new buildings and facilities designed to accommodate the modern student population, there looms an issue all too familiar to both CFOs and facility managers alike. Aging facilities that once stood proud to serve faculty and students are starting to groan from years of deferred maintenance.
From 1950 to 2016, enrollment in higher education increased by 600%.1 With this rise in student population came a building boom. The new reality is that many of those buildings are in desperate need of major repair. Even as some colleges experience declines in enrollment, ongoing facility maintenance should remain a priority to maximize the longevity of buildings and property.
The Sobering Reality of Deferred Maintenance
“Due to the complexity and diversity of facilities contained within college campuses, deferred maintenance can be a common challenge for maintenance, management, and budgetary staff,” said Ward Durant, senior risk control specialist with Brotherhood Mutual. Fixing immediate needs can distract you from long-term planning, so systems that seem to be working fine are ignored. Over time, small, inexpensive repairs can turn into budget-busting replacement bills.
Some Christian colleges operate with razor-thin budgets, often leaving physical plant managers with inadequate funding for capital renewal, the budget item that deals with building maintenance. This means that regular upkeep may get funded, but budgets for big-ticket repairs are reduced or eliminated to help balance the books. Deferred maintenance can cost you beyond the funds needed to repair your buildings. When buildings fall into disrepair, it can become more costly to buy property insurance.
“Private schools don’t typically have near the funding of public schools,” said Tim Cool, founder of Smart Church Solutions, which specializes in facilities planning and management “This makes it even more important for Christian colleges and universities to perform preventive maintenance to ensure their buildings are sound, equipment is running smoothly and efficiently, and potential hazards are quickly fixed.”
Here’s an example of an audit the Smart Church Solutions team recently performed on a 40,000 square foot ministry building. They found $1.9 million in deferred maintenance, including needed repairs to the roof, HVAC equipment, parking lot, and more. If the ministry had budgeted appropriately for maintenance and staffing during the past 20 years, it would have spent about $900,000. Deferring their maintenance more than doubled their costs. Imagine multiplying this staggering sum across all the buildings on your campus. You could be facing millions of dollars in deferred maintenance costs.
Short-Term Gain. Long-Term Pain.
Some of the biggest areas for deferred maintenance include HVAC, parking lots, flooring, and roofing. “These are big ticket items and the tendency is to let them slide for too long, leading to increased energy costs and the inevitable catastrophic failure,” explained Cool.
Consider that the cost of handling a replacement at its point of total failure is generally 30 times the cost of handling it on its first failure.2 Let’s look at window caulking that goes bad. You can spend about $5 per window to fix it, or you can spend much more later when you have to replace drywall, framing, insulation, trim, flooring, and pay for mold remediation caused by the leaky windows.
Deferred maintenance can lead to serious safety issues, too. “Campus walkways, vehicle lanes, and parking areas can represent significant risk exposure for trips and falls,” explained Durant.
Budget Now to Save Later
Having an appropriate budget for Provision for Plant Replacement, Renewal, and Special Maintenance (PPRRSM) enables you to properly maintain your facilities, which can result in saving money in the long run. Allocating capital funds or setting up an endowment fund for facilities renewal are critically important steps to avoid a budget crisis as a result of deferred maintenance.
For example, taking a proactive approach to pavement surface inspection and maintenance is crucial to reduce the risk of injury and maximize long-term performance. Regular inspections with documented conditions can help identify areas for both immediate repair and long-term replacement needs. “It’s important to manage facilities and make repairs before their point of failure. For example, a pavement maintenance program that includes joint and crack filling combined with surface sealcoating and rejuvenating components can extend pavement life cycles significantly,” said Durant.
Regular roof and HVAC inspections and maintenance will help your equipment last longer, run more efficiently, and minimize the need for more expensive repairs or replacement. There’s also the added benefit of having plenty of advance notice as the equipment nears the end of its lifecycle. Planning and budgeting for equipment replacement is always better than having to raise funds to replace a suddenly failing roof, HVAC system, parking lot, or other big-ticket item.
The remedy to the high cost of deferred maintenance is preventive maintenance. It’s important to look to the future and make intentional plans for addressing maintenance that will extend the life of your buildings and equipment. It reduces the potential for downtime and the need for reactive maintenance.
Performing regular maintenance on a piece of equipment while it is still working well lessens the likelihood of a catastrophic failure. If you are looking for ways to save budget dollars, then adding preventive maintenance is one of the best ways to ensure you stay on top of your facility needs and mitigate a large portion of corrective maintenance.
Preventive maintenance helps prevent much larger issues from causing catastrophic failure. It also helps protect an organization’s budget. “Facilities stewardship isn’t just prudent because God has entrusted these facilities to us. It’s also the right thing to do,” said Cool.
New Construction and PPRRSM - Planning for Success
Raising endowment funds for new construction is exciting and challenging. Renovating an existing structure or building new are visible signs of growth and forward momentum. Adding sufficient Provision for Plant Replacement, Renewal, and Special Maintenance (PPRRSM) to your budget when a building is new can help you not only steward your finances but can ensure the long-term success of your physical plant. It’s important to account for the ongoing operating and maintenance expense, too. Tim Cool, founder of Smart Church Solutions, explains that the construction costs for a new building are only about 30% of the total cost of ownership. What begins as an exciting campus expansion can quickly lead to financial difficulty if not figured into the budget at the very beginning. As a senior risk control specialist with Brotherhood Mutual, Ward Durant also advises colleges to consider the lifecycle costs for building materials. “Building cladding systems that require crack sealant and paint applications every 8 to 12 years, such as External Insulation and Finishing Systems (EIFS) or stucco, can be a significant cost exposure over their life cycles. Materials like brick or stone cladding will require minimal sealant replacement during their longer life cycles,” he said.
The information provided in this article is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. We encourage you to regularly consult with a local attorney as part of your risk management program.
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