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FM Frequency: Conserving Dollars

Written by Retired Columnist. Posted in Facility Management, FM Frequency, Magazine, Professional Development, Retired Columnists, Topics

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Published on August 07, 2008 with No Comments

By Jeff Crane, PE, LEED® AP
Published in the August 2008 issue of Today’s Facility Manager

This challenging economic climate is turning up the heat on many facility managers (fms). Beyond the typical due diligence associated with projecting revenue and expenses, organizations facing precipitous stock market devaluations and/or revenue insecurity are focusing on their top two costs: headcount and facilities.

While department heads and senior human resource managers typically plan for salaries, benefits, and staff counts, their assumptions are essential for accurate facilities projections. Unfortunately, 12 to 18 month staff estimates are typically more art than science.

Most fms annually plan (and later adapt) for a wide range of possibilities with high and low worse case scenarios. Beyond obvious forecasts for square footage and furnishings, fms can examine each facility expense and develop cost saving strategies using the following degrees of severity:

  • Code Blue: organization is healthy but in a cautious budget mode;
  • Code Orange: warning signs on the horizon, creative and substantial budget cuts are necessary to improve profitability and/or ensure organizational survival; or
  • Code Red (a.k.a. “the sinking ship”): this type of demoralizing budget cut, if implemented improperly, could actually accelerate the demise of a troubled organization. These suggestions should only be attempted by very experienced fms and only under at least two of the following conditions:

A. CFO and CEO are exhibiting signs of a nervous breakdown;
B. two or more executives have been indicted by a grand jury;
C. bankruptcy judges giggle as they read the financial statements; or
D. Jerry Springer is hosting a live show at the next board meeting.

Let’s experiment with this triage style budget scrutiny on two primary facility cost areas-utilities and janitorial services.

Utilities: Code Blue

  • Hire a licensed engineer or certified energy manager to review electric, gas, and water consumption along with associated rate options. Attempt to understand and manage utilities consumption better, obtain the most appropriate rates from the local providers, and prioritize capital investment opportunities for improving efficiencies.
  • Make sure HVAC scheduling, temperature set points, and lighting levels are appropriate for occupied and unoccupied hours.
  • Educate occupants and ask them to support conservation by turning off lighting, appliances, and pieces of office equipment that aren’t being used.

Utilities: Code Orange (after completing previous recommendations)

  • Close blinds in warm months to minimize solar gain and cooling needs.
  • Implement day cleaning to reduce evening lighting and HVAC loads.
  • Install low flow toilets and waterless urinals to cut water and sewer charges.

Utilities: Code Red (after completing previous recommendations)

  • Set all thermostats to 85°F in summer and 60ûF in winter. Recommend a “clothing optional” dress code.
  • Shut down non-emergency lighting. Since blinds will also be closed and occupants may be scantily clad, encourage staff to bring lanterns, miner’s helmets, and flashlights from home. Candles and open flames should be discouraged indoors, even during Code Red.
  • Turn off the main water supply and lock up the restrooms. Encourage occupants to “think green” and use the natural environment outside. Employees with a high beverage intake will especially appreciate this frequent exposure to daylight.

Janitorial Services: Code Blue

  • Compare janitorial expenses to industry benchmarks. Consider competitive proposals if it has been more than three years.
  • Review detailed specifications with suppliers, and determine if any services can be reduced, eliminated, or handled by others.
  • Negotiate pricing concessions in exchange for longer term or higher volume contracts.

Janitorial: Code Orange (after completing previous recommendations)

  • Remove trash from cubes and offices only three days per week and eliminate trash can liners. Educate staff about discarding food waste in break rooms; position this cost reduction as a “green initiative.”
  • Transition to day time cleaning and reduce or eliminate the need for day porters (in addition to previously mentioned utilities savings).
  • Reduce quality of paper products and install electric hand dryers to eliminate hand towels in restrooms.

Janitorial: Code Red (after completing previous recommendations)

  • Terminate cleaning contracts and require staff to clean up after themselves by taking trash to the dumpster (or even better, to their homes).
  • Conduct weekly departmental “team building” competitions with events such as “speed vacuuming” and “power dusting.”
  • Assess “convenience fees” for staff using microwaves, refrigerators, restrooms, and conference room chairs.

This type of analysis can be handy for other facilities expenses such as landscaping, security, maintenance, insurance, and even property taxes. For tips on taxes and a creative facilities management deduction, see the May FM Frequency column. Oh yes, and happy budgeting!

Crane is a mechanical engineer and regional property manager with Childress Klein Properties, a leading real estate developer and property management services provider in the Southeast.

About Retired Columnist

This expert formerly served as regular contributor to Today’s Facility Manager magazine. His vast knowledge of the facility management profession continues to provide a rich resource for facility managers by way of this online archive.

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