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The Real Costs of Deferred Maintenance

With limited funds and competing demands, district leaders are challenged with financially meeting the day-to-day operational needs of schools while balancing the need to make costly facility maintenance repairs and replacements. To keep overall operational costs in check some schools find themselves in scenarios where maintenance and operations (M&O), system upgrades, and/or repairs get deferred to a future budget cycle or postponed until funding becomes available (known as Deferred Maintenance).  

Deferred maintenance may seem like a reasonable short-term fix, the fact is this is a growing issue with long-term adverse impacts. The effects of having to close a school because of system failures affects not only the financial aspect (paying educators and staff for time when they can’t teach), but student success, and stakeholder confidence in the school’s leadership. Additionally, aging, under maintained facilities can end up costing more to repair or replace in the long run, draining operational budgets. Just think, one-sixth of the entire U.S. population spend over 8 hours inside today’s K-12 public school buildings each weekday. This compelling statistic can help show the exponential impact on the health and well-being of multiple generations of school occupants in cases where deferred maintenance has resulted in under maintained school facilities. The impacts can be felt by the air occupants breathe, the sounds they hear and the discomfort they feel due to uncomfortable air temperature in classrooms, all important facets of optimal learning environments for academic performance.    

Another key point to consider when deferring maintenance is the fact that poorly maintained systems can burn out before their expected end of life. Consider the following:

  • Facilities systems receiving less than the manufacturer recommended preventive maintenance will most likely break down before their projected replacement date.
  • A study conducted by the Pacific Partners Consulting Group determined that every $1.00 of maintenance deferred to a later date resulted in $4.00 of capital renewal.
  • For many school districts, deferred maintenance has created a backlog of critical projects, often triggering emergency repairs, typically costing 3-4 times more than scheduled renovations. National Center for Education Statistics estimates $550 billion in investment needed nationally to bring US school buildings up to standard.   
  • Buildings can depreciate at approximately 2% a year, the average US school building is over 45 years in age with high-cost mechanical systems requiring replacement.  

The good news is 80% of school equipment can be kept operational with preventive maintenance. The following are general recommended repair timelines for efficient performance of school facility components: 

Item Repair Timeline
Paint 2 years
Carpet 10 years
Roof Top Air Conditioners 15 years
Boilers, Hot Water Systems 24-35 years
Furnaces 18 years
Unit Heaters (gas, electric) 13 years
Unit Heaters (hot water, steam) 20 years
Ductwork 30 years
Cooling Towers 34 years
Pumps 10-20 years
Controls 15-20 years

​How are deferred maintenance costs calculated?

Traditionally, deferred maintenance is calculated by subtracting the accumulated expenditures for preventive and regular maintenance, minor and capital repairs, capital system and component replacement from the current replacement value of a facility accumulated over the projected life of the facility—usually factored as a 25- to 50-year facility life as seen below:

Formula: DM= CRV – [Year 1(PM+RM+CAP Repairs+Replacements) +Year 2 (PM+RM+CAP Repairs+Replacements) +Years 3 to N]        N= Number of years of projected life of the facility

Modern standards also exist for maintaining and upgrading current K-12 public school facilities. A general industry standard for facility M&O, as well as costs of utility and security, indicates that a minimum of 3% of the current replacement value (CRV) should be budgeted annually. An additional 1% of the CRV should be budgeted annually to systematically reduce the accumulation of deferred maintenance over the next 10 years.

With limited operational budgets, schools may consider packaging deferred maintenance within a broad facilities master plan and vision to closely link behind-the-scenes investments with high-profile construction and capital planning.

How can schools plan for continuous facility upkeep and reduce deferred maintenance costs?

More proactive planning and a less reactive (“fix it when it breaks”) approach can help schools reduce deferred maintenance costs. Preventive maintenance planning starts with a data-driven strategy built on tracked metrics and an understanding of the optimal project investment mix (envelope/mechanical versus space renewal) ​required for a district’s schools. It’s critical to assess the specific conditions, existing asset lifecycle data and critical equipment inventory using robust data collection. It’s also important to fully understand the conditions in your schools and how these facilities affect student and staff health, the environment, the local economy and overall community vitality. Strong data demonstrating school performance, incorporating information from comparable schools, are also invaluable when prioritizing facility improvements. Collectively, these data points and metrics can provide a strong case for communicating the need for facilities funding.  

In addition to limited financial resources, it can be difficult for schools to find the time to create a strategic plan and sort through the best way to allocate funding for their facilities.  School districts can consider consulting with a facilities management expert who can help navigate through an assessment and provide guidance to devise a plan that meets the district’s goals and objectives.  

In summary

A high-quality facilities management program is constantly at work, reviewing ​performance, monitoring status and auditing compliance against service ​objectives. Additionally, ensuring staff are continuously assessed and properly trained with critical competencies are equally important to an effective program. Moreover, facilities management strategies require risk mitigation with careful planning and monitoring, requiring continuous assessments of risk tolerance and development of contingency plans.  The upfront investment in preventive facility maintenance yields tangible financial and physical upside for schools in creating and sustaining optimal learning environments for students, teachers and communities.

Author:

Roxanne Moore MS, RDN, PMP

National Director of Wellness

Brand Management Team

Sodexo School Services, North America

Phone: 410-322-8247

Roxanne.moore@sodexo.com

Sodexo: World Leader in Quality of Life Services: www.sodexoUSA.com. Learn how Sodexo Enhances the Learning Environment at sodexousa.com/schools.

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