The Process of Facilities Capital Planning and Management: Step Five

January 17, 2013

The next step in the process of facilities capital planning and management is to demonstrate the impact of funding. With deferred maintenance and system renewal requirements prioritized and facility condition index (FCI) data in place, it is possible to justify both short- and long-term budget requirements by demonstrating the impact of different funding levels on the condition of an individual facility or an entire portfolio. With funding scenarios, organizations can pinpoint the risks and highlight the financial consequences if the work is not completed.

For example, one funding scenario may show the funding required in order to maintain the FCI at its current level over twenty years. Another scenario can show what it would cost to improve condition to a target FCI over a ten-year period, and then maintain at that new level for another ten years.

A third scenario can be used to demonstrate that if there is no budget increase and funding remains static for twenty years, there will be a significant decline in facility condition. At that point, the condition of the building is likely to have deteriorated to the point that safety is an issue and building replacement, rather than repair, would be a consideration.

Facility managers can greatly benefit from funding scenarios as they can be used to clearly demonstrate the impact of budgets on facility condition for any time frame. It’s an excellent tool for making the point that insufficient budgets have definite consequences.

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