President's Letter January 2010

Date:               22 January, 2010

From:              James Mayer, President, BOMA Wichita Chapter

To:                  BOMA Wichita Chapter Members

Subject:           Building Maintenance & Budget Reductions

Happy New Year!  I hope this letter finds you all well and having a great day!

Recently our Chapter conducted a voluntary survey of its members regarding a variety of interests pertaining to why businesses subscribe to BOMA and what we, as a Chapter, could do to make your membership experience more valuable and interesting.  Through this survey and during casual luncheon discussions with other members there is one topic, out of many, that I would like to discuss with you in this month’s letter: That topic is Building Maintenance.  A full 75% of all survey respondents put this topic at the top of their list of interests on the survey.  While uncertain, at this point, what exactly you members are looking for in particular, I thought that this month’s letter could address the topic of maintenance & budget reductions, “playing with fire”.

While it goes without saying that many portfolio managers are somewhat insulated from the theory and necessity of building maintenance, facility managers are keenly attuned to the importance that a good diverse maintenance program plays in facility operations and equipment reliability.  Having been a member of several different organizations I have seen the best of maintenance programs, and the worst of them.  The best of them would have to have been the military, specifically the US Naval Submarine force.  While I don’t want to ruffle any feathers from any of the other Armed Forces, which I am assuming are just as competent, my experience is limited to submarines, so it is to that group that I speak, so no offense intended.  The submarine force is extremely proactive in their maintenance program which consists of all aspects of maintenance that any organization could possibly think of.  Heck, they even do periodic maintenance on their maintenance program to ensure they are using the latest techniques and standards for maintaining their boats and all the equipment on them.  They perform preventive maintenance, predictive maintenance, routine and emergency repairs, all by written check lists and procedural manuals due to the implications that could come from equipment failure when you are several hundred feet underwater.  These maintenance programs include routine vibration analysis, laser alignment, thermal imaging and harmonic analysis.  It would be nice if all our organizations could take building maintenance to that level of detail and thoroughness, but alas, we don’t have the government’s money.

Reality is that in this day and age, especially given the current economic condition, we are all being asked to cut back.  So, how does and organization, that is already “lean and mean”, make additional budget cuts?  By now you’ve probably already cut your discretionary funding to next to zero, eliminated all OT, held positions open through attrition and cut service levels for such things as janitorial services, window washing and even pressure washing the exterior of your buildings.  Maybe you’ve even gone as far as tossing out your historical budget and adopted a “Zero Based” budget to make sure you’ve cut out all the fat. 

What do you do when you’ve already cut your budget so thin that you’re chipping at bone and your portfolio CEO is mandating additional budget reductions?  You may have to consider the unthinkable, the greatest sacrilege a facility manager could suggest.  Reduce or eliminate predictive and/or preventive maintenance activities!  Yes, I know, as short sighted and ill advised as it may seem, many organizations have opted to drastically reduce these two maintenance activities in order to just survive.  In some organizations preventive and predictive maintenance activities could draw on as much as 30 or 40% of your annual operating budget.  Reducing or eliminating those activities has tremendous financial implications for current and future years to come.  We’re not talking about the routine stuff like changing filters on HVAC units or greasing motor bearings, those are low/no cost activities that must continue.  What I am speaking to is routine periodic vibration analysis, thermal imaging, tightening lugs in transformers and breaker boxes, amping out motors, tearing down and doing PM’s on HVAC units and heat exchangers.  You know, the “annual physicals” that you would normally perform on your facilities and equipment, that kind of stuff. 

As short sighted as it is, it is still a viable method for mandatory budget reductions when there is nothing left to cut.  With having been forced to freeze hiring, this could help reduce pressure on thinning maintenance staff resources since removal of those PM activities will free up staff to return to customer service issues.  It will also reduce your contractual expenditures, if you are outsourcing or reduce your commodity consumption if you are normally performing these functions in-house.  As hard as it may be to accept, preventive and predictive maintenance are not “sacred cows”, they can be cut and they do save money when you do so.  Depending on the current level of intensity of PM activity in your organization, these savings could be VERY substantial.  I’m not talking about 5% or even 10%, I’m talking more like 30%!

I know that this goes against the grain of all competent facility managers, and rightfully so.  It creates and artificial impression in upper level management that it isn’t needed and when the revenue stream returns to normal, it can be a program almost impossible to reestablish once it is gone.  If this tactic is utilized by a facility manager, it places an added layer of diligence that they must now document and communicate to upper level management.  This is where a good deferred maintenance tracking system comes into play and the communications and tactical negotiating skills of the facility manager are going to be critical in getting the programs back.  By tracking your deferred maintenance you can show the gradual (and inevitable) decay of your facilities and equipment.   If you have already been tracking facility condition assessments, then you are even further ahead because you will have already established and documented a good baseline history of the condition of your facilities and equipment and that decay will more quickly be visible, especially when presented in a graphical format.  I like graphics; it is truly a case of one picture saying a thousand words.  Show the portfolio manager what negative effect this deferred maintenance is having on the value of the property, it’s all about the bottom line.

Additionally, the facility manager must look for opportunities to vocally communicate the effects that are a result of eliminating predictive and preventive maintenance.  Once the programs are eliminated you must look for opportunities where equipment failure has created work stoppage or customer complaints and inconvenience.  When that HVAC unit cooks a compressor and it gets to 90˚ in a customer’s office, you will need to make use of that situation and take advantage of it as a lever to heighten upper level managements awareness of what it is that they have given away……reliability and continued customer satisfaction!  Just be sure you’re a good judge of your portfolio manager’s strengths, no sense in committing career suicide to make a point to a strong choleric boss.  Customer satisfaction surveys can also help in this area, nothing beats having the class-A lessee hand a testimonial (good or bad) to those that are holding the purse strings, hits them right where they live, in the professional credibility.

If you’re fighting to reestablish a PM program that you were forced to sacrifice during lean times, keep in mind that the worst case scenarios sometimes carry with them the greatest benefits in the efforts to get them put back in place.  Imagine having lost your PM program several years ago and your staff finds a cracked heat exchanger that supplies heat to a leased office space and you have to condemn the unit.  If it takes a week to get a replacement, that’s a pretty big bag of ammunition to bring to the table come budget time.  You will have to leverage your events, be persistent and relentless in pursuit of reestablishing the program.  It’s a lot of work and a lot of fighting and negotiating but it can be done. 

Let’s just hope that none of this will need to be considered as an alternative by you folks, preventive and predictive maintenance are very important to proper facility maintenance & repair!

Good luck this year!

Best Regards,

Jim Mayer, City of Wichita

President, BOMA Wichita