Spotlight on Discovery
Whether your operating budget is measured in thousands or millions of dollars, one thing is certain: your budget is finite. It can only stretch so far, and this is often not far enough. Since 2007, our data shows only a slight upward trend in funding for facilities operating budgets, which makes operational effectiveness important. Sightlines breaks this budget into three categories: daily service, which includes costs associated with the regular maintenance, cleaning and grounds upkeep; planned maintenance, which includes things like materials and labor costs that enhance or extend the useful life of campus buildings or components; and utilities, which include the procurement of utility commodities.
It’s important to not overlook the value of growing a planned maintenance (PM) program on campus. Sightlines has found that $1 invested into PM now can prevent the need to spend $2.73 in reactive maintenance later. Talk about a solid return on investment!
Get the Most from Your Money
Proper campus management requires shrewd spending and having personnel that can do their best with what they have. At an institution with an operations budget that can fulfill the majority of the daily service and PM needs, the campus should look great and perform at a high level. However, if your institution is lagging behind peers when it comes to your budget, depending on your operational effectiveness, your campus might start to show signs of wear and tear or not perform well. On the other hand, your institution could be keeping pace with peers in spite of a lower operations budget. This was the case at the institution highlighted in the chart. Their operating actuals on a dollars per gross square foot ($/GSF) basis were lower than many of their peers, however, they were on par with the peer average for inspection score. An inspection score is an independent judgment of campus appearance gained by an inspection of a representative sample of campus buildings and grounds in the categories of cleanliness, general repair/impression, exterior, grounds, and mechanical spaces. It can be a useful measurement of your institution’s operational effectiveness. With less money at their disposal, the staff at this institution was keeping pace with, or surpassing, the performance of peer institutions, some of which had larger operations budgets. Also, when compared to peers, the maintenance and custodial staff were covering more buildings per full-time equivalent, and spending less overall.
Good Performance. Here’s a Raise.
Able to show that they were performing respectably with an investment level below their peers, the facilities department could make a valid case for an increase in their operations budget. The CFO could see that his facilities team was doing a solid job, but he could also see that other institutions were funding their facilities at a higher $/GSF rate and have more staff maintaining their buildings and grounds. To stay competitive, the CFO decided an infusion of capital was needed, and he increased the operations budget by 5%. With these added funds, the institution hopes to better maintain campus, improve their inspection scores, increase operational effectiveness and focus on PM that will increase the value of every dollar invested.