The "4 X" Reality of Deferred Maintenance

I continue to study, explore, and learn more about the impacts of deferred maintenance.  As I venture deeper into this topic, the more driven I become as to the need for Kingdom minded people to TAKE THIS SERIOUSLY!

Let me share some of the research we have been studying and how this is not to be taken lightly.

I was reading a blog that quoted Rick Biedenweg, President of Pacific Partners Consulting Group and former Assistant Vice President of information resources at Stanford University. In that blog Mr. Biedenweg said:

“Every $1 in deferred maintenance costs $4 of capital renewal needs in the future.”

WOW…that is a kick in the gut.  I have taught for years that if we do not keep up with the natural rate of deterioration (1-4% of the current replacement value – CRV) that the rate can more than double.  This reinforces this premise as the compounding factor of not spending $1 today, can grow 4 fold as the deterioration continues…coupled with the future value of time and money.

While Biedenweg worked primarily with the educational system and their needs, his numbers and research can be used with any type of maintenance department. Their research indicates educational institutions should be spending 0.5% (annually) of their building and system’s current replacement value on ongoing maintenance and regular preventive maintenance and 1.5% of CRV on capital repairs. Again, this solidifies and accentuates the positions we have taken related to Facility Stewardship and the need for intentional and proactive long term planning.

If you want a real mind-blowing experience, read this article called the “Inverse-Square Rule” by David Tod Geaslin.  This made my head hurt!  If you don’t have time to read the entire article, at least grasp this thought:

“If a necessary repair is deferred and allowed to remain in service until the next level of failure, the resultant expense will be 30-times the early intervention cost.”

Lord have mercy!

Here is one other startling thought that caught my attention in a article by the American School & University Magazine entitled Falling Behind: School Maintenance & Operations.

Here are some of the salient points in the article:

  1. The National Education Association issued a report on school facilities in 2000, “Modernizing Our Schools: What Will It Cost?” The teachers union estimated the nationwide cost of repairing, renovating, or building school facilities and installing modern educational technology at $322 billion.
  2. In 2013, the U.S. Green Building Council’s Center for Green Schools issued a report, “State of Our Schools 2013,” that takes the 21st Century School Fund’s $271 million estimate and adds to it modernization costs that would enable U.S. schools to meet current education, safety and health standards. The grand total: $542 billion.
  3. The American Society of Civil Engineers has assessed the condition of the nation’s public school infrastructure in a way that educators will understand: A report card. But schools won’t make the honor roll with the grade: D. That’s better than the F that the engineers gave to school infrastructure in 1998, or the D-minus in 2001. The D bestowed on school facilities in 2005, 2009 and again in 2013 is an indication that schools have made some progress in addressing maintenance backlogs since greater attention was given to the issue in the 1990’s, but the response has been inadequate to confront the scope of the problem.

PERSONAL NOTE: There are only 98,000 public schools in America…and over 350,000 churches. Can you imagine what the amount of church deferred maintenance there is in churches if there is $542 Billion in public schools?

“Yeah, Tim, but that is schools…and that is public domain.  We are churches, Christian Schools and Universities. We are different.”

I agree…but not the way you may be thinking.  Here are the differences I see:

  1. Schools are an “entitled” entity in our current social structure. However, our ministry and educational facilities have been ENTRUSTED to us which places even more responsibility on the stewards.
  2. Public Schools are funded through taxes…which means their funding is not provided out of the goodness of contributors hearts.

So…what is the bright side of this (I know…the above is a little depressing)?  It is never to late to get started to turn the tide.  We will look at the ways by which your organization can address these issues and turn the tide.

Make sure to download your FREE copy of 5 Intentional Steps to Establish a Capital Reserve Account.  Also, get your FREE subscription to the Life Cycle Calculator. Be INTENTIONAL!

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