Fram Oil Filters and Church Facilities

A few years ago, I was introduced to Kevin Folsom, former Director of Facilities and Plant Operations, Dallas Theological Seminary, Dallas, Texas  He wrote a White Paper entitled “sustainable facilities” vs. Sustainable Facilities. This is an excellent article and frankly some of it is over my head…Kevin is one smart dude!!!!

Here is a quote from this article:

There are numerous levels that can be used to go about this, but to start we have to remember our early Physics lessons in high school about the 2nd Law of Thermal Dynamics. Everything we build will decay, but it may last longer if properly maintained. So, here’s a puzzling question…If we build facilities that the natural law causes them to decay at fairly predictable rates throughout its birth to burial, why do we not plan for it?

According to a research project done a few years ago, facilities…any facility…will deteriorate at a rate of 1-4% per year, assuming regular preventive maintenance. However, this rate of deterioration will in most cases more than double if the regular, systematic preventive maintenance is not performed.

So…why do we, as church leaders, avoid addressing and planning for the inevitable? Would you drive your new car and never change the oil until the engine seizes up and then cough over a huge amount of money for a new engine? That does not make any sense to me.

Let’s step back and look at the big picture for a minute. An appropriate preventive maintenance program should be funded on average at 1.5 percent of the CRV (Current Replacement Value) of a facility. Using the Fram Oil Filter analogy and advertisement from 1972, let’s look at how the “pay me now or pay me later” principle might be applied to your facility.

Let’s assume you put 15,000 miles a year on your $25,000 car…you are prudent and change your oil at a minimum of every 5,000 miles…and the average oil change costs $50.00. That would be $150.00 a year.  In addition, let’s assume you have 60,000 mile tires, meaning you should get 4 years of wear (life cycle).  If the tires cost $150 each, that would be $600 or $150 per year.  There is some other miscellaneous filters, belts, etc that need to be replaced every year or accounted for every X number of years.  Let’s assume that we need to allocate another $100a year for those items.  That totals $400 of “preventive maintenance” on your car. Based on the above assumed purchase value, we would invest 1.5% of the value annually to keep the car running smooth.  Is there anyone out there that thinks it is a waste of time or money so spend $400 (1.5% of the value) each year to maintain your vehicle and extend its useful life?

Do you see a pattern here?

Here is another factor to consider.  If your $25,000 car has a life expectancy of 8 year (15,000 miles for 8 years, for a total of 120,000 miles), how much do you need to set aside to replace the car?  We know we need to invest $400 +/- annually to keep it running, but that money is going to be spent and we sill need to plan for the new vehicle in 8 years.

If I make the assumption that vehicles are going to experience a 5% cost inflation per year (compounding) then the cost of that replacement vehicle will be $36,938 which means I need to set aside $4,617 each year in a “capital reserve/life cycle” account.

So, if we are inclined to subscribe to the above 2 models for maintaining and replacing your vehicles, does it not make sense to do the same for your facilities?  God has entrusted you to steward them…right? If so, to quote Sean Connery in The Untouchables, “What are you prepared to do?”