1. RECHARGE!
Recouping costs associated with project work completed ‘outside’ of Operations and Maintenance (O&M)

2. Outline Why is recharge important? How do you define O&M?
What other resources are there to complete work outside of O&M?
How are capital funds to be used?
Clark College model
How can I convince my leadership that I must recharge?

3. Why is recharge important?
Loss of valuable maintenance dollars
Wear and tear on vehicles, equipment, and tools used outside of O&M, but paid for out of the O&M budget
Use of other State resources including admin support staff, your time, and utilities to support ‘pet project’ work
Second and third bullet points–Overhead labor cost associated with project support can equal $20 per hour-that’s what it is here at Clark on the Maintenance side.

4. How do you define Operations and Maintenance?
Simply put, “Maintaining the buildings and grounds as they existed yesterday” (Preservation)
Anything done outside of preservation should not be done using O&M (preservation) dollars as it would then be considered an ‘improvement’.
‘Operations and Maintenance’ can be interchanged with the term ‘preservation’ used in the capital budget language to state how capital dollars may NOT be spent, but there is no RCW governing how O&M dollars must be spent
Ask participants the question—get feedback

5. What other resources are there to complete work outside of O&M?
Capital budgets
Departmental budgets
Foundation or donated funds, endowments
College funds (subject to approval by Administration)

6. How are capital funds to be used?
RCW (4): “Pubic Work” means all work, construction, alteration, repair, or improvement other than ordinary maintenance.
Wayne Doty, John Ginther, and Cherie Berthon at SBCTC all agree that this and other similar RCW’s clearly indicate that capital dollars may not be used for maintenance. Although there is no RCW governing how O&M dollars are spent, the RCW’s surrounding capital expenditure leave only O&M dollars for O&M work.

7. Clark College Model
History—before my arrival in late 2013, Facilities was recharging at a rate of $25.00 per hour.

8. Clark College Model
PROBLEM! The SWB rate at the time for a MM3 was about $33.00 per hour, so even without considering other overhead costs, Facilities was inappropriately spending O&M dollars on ‘capital’ projects.
In FY 2012/2013, Clark College recovered $113, in costs via recharge, but it was a losing proposition. If it were a business, Facilities would have filed Chapter 11.

9. Clark College Model It was time to take action.
I created a calculator to accurately capture costs which include SWB, vehicle and equipment costs, utility costs, and overhead labor costs associated with non-O&M work.

10. Recharge summary section
Recharge detail section
Note the percentage of time spent by hourly staff on projects, work, or events, outside of preservation in lines 9 and 10
The yellow cells are related to Maintenance recharge
The green cells are associated with custodial recharge
The blue cells are the overhead labor costs associated with performing project work-positions at Clark College, but the pay has been increased to show what we really should be paid
The orange-ish cells in the recharge detail section are formulas-driven
The purple cells are fixed numbers
Note on line 9 and 10. If you calculate that percentage alone, it will tell you quite a bit about how your staff spends their time
Overhead labor detail section
Overhead labor summary section

11. What were the results of the implementation of the correct recharge rate?
Recovered costs jumped from $113,520 to $187,312 after implementation in first FY with minor changes
Recovered costs rose to $241,043 in first full FY of implementation (FY 14-15)
After some refining to the tool that I now use and some COLA changes to the SWB categories, recovery amounts went to $278,839 in FY and to $255,072 in FY
Projected recovery for is in the $260,000 range
We’ve started to even out and be able to project what we can recover.
I was able to hire one FT MM3 carpenter unfunded to support recharge work.
We are not only recovering costs correctly, but we are also charging for ‘improvement’ work correctly.

12. How can you convince your leadership that you must recharge?
My leadership asked me, “How do we know that your numbers are accurate and you’re not trying to make money off of us?” I did tell them that we should be charging $51 per hour, but I was only suggesting $45 as a cushion—just in case I was wrong.

13. Very, very carefully and tactfully!
Use the term ‘preservation’ in reference to the intent of O&M funds.
Differentiate between projects or tasks that ‘preserve’ vs projects that ‘improve’, and the importance of using the right fund for the appropriate project/task.
Argue that “costs must be recovered”, not that you intend to make a profit. Be clear about that differentiation.
Explain how it will benefit the college on the operational side- the ability for Facilities to provide better day-to-day service of and to the campus
Using “costs must be recovered” will help sell the fact that you have a loss of some sort.

14. Any Questions?