FROM THE EDITOR
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A Publication of Stamats Buildings Media
VP, Group Publisher Tony Dellamaria
Chief Content Director Chris Olson
Senior Editor Janelle Penny
Senior Editor Jennie Morton
E-Content Editor Pete Campie
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Editorial Advisory Board
Christopher K. Ahoy President/CEO,
Performance Management Consulting
Steven R. Colvin Senior Vice President of
Property Management, Boston Properties LP
Michael Delev General Property Manager, Hines
Steve Fugarazzo Manager, Facilities Engineering,
Rod Stevens Principal Consultant,
Eric A. Woodroof Founder,
A Budgeting Trick of the Eye
For me – and a lot of other people, if polls can be believed – autumn is the most popular season of the year. Crisp air, fall color, the sense of a new beginning if not a new calendar
year. What’s not to like?
Only one thing that I can think of – it’s budgeting season.
For the many FM departments viewed as cost centers by their managements, budgeting is an
annual battle against deferred maintenance. Departments are traditionally underfunded.
Management takes the short-term view and does not spend time calculating the cost of
breakdowns or curtailed productivity.
It’s not easy for FMs to get themselves valued as contributors to bottom lines – es-
pecially when one meaning of the word maintenance suggests standing still rather than
pushing forward to success – an unfortunate connotation when organizations are sporting
rose-colored glasses and indulging in dizzying profit projections.
Another disconnect involves the separation between capital and operations/main-tenance expenditures. As pointed out in this month’s article on federal energy targets
(page 38), the government does take a long view of its facilities and indeed holds them for
longer periods than any other building owners. However, the federal government’s budget
process does no better job of accounting for lifecycle costs than the commercial sector’s.
Federal budgets focus only on first costs for new construction and major retrofits. Funds for operation and maintenance of existing buildings appear on a different budget
line. The disconnect means that lifecycle costs are not easily
evident to executive decision makers. It’s as though we can’t
process both at the same time.
For FMs the solution to the perennial budgeting problem
may lie outside the budget numbers themselves, although
they can surely try to come up with historical facility data
demonstrating the cost of deferred maintenance and the
thumbscrew of unfunded fixes in the middle of a budget
year. The communication issue is also critical – can FMs
persuade management that productive facilities provide a
competitive edge that drives long-term profit?
Chief Content Director
IS IT A CAPITAL BUDGET
LINE OR AN OPERATIONS
LINE? Why can’t we see
both at the same time?