Facility Issues released its 2006 Benchmarking Report Highlighting Industry Practices in Operations and Maintenance.
The study shows utility costs rose significantly in all industry types and in all regions throughout the US. The median cost per square foot increased from $2.22 to $2.50 for an increase of 13% in one year.
There has been continuous media coverage of utility rate increases throughout the year so the results are not unexpected. Most of the increased costs can be attributed to electrical portion of the energy expenses. Electricity represents 74 percent of the energy costs and the median costs increased 7 percent to a median cost of $.064 per kwh. Natural gas makes up approximately 20 percent of the energy budget and costs increased more than 40 percent.
So how did facility managers balance their budget with sharply increasing energy costs? Overall median operating costs which include
- Utilities
- Maintenance
- Custodial
- Grounds
- Parking and Paving
- Security
are down slightly this year from $6.60 to $6.56 per gross square foot. Maintenance expenses remained unchanged at $1.81 / GSF and custodial expenses also remained flat at $1.27 / GSF. Facility managers made up for the shortfall by significantly cutting back on grounds, parking, and security expenses. These are not high dollar expense areas to begin with, so if energy costs continue to increase, overall budgets will need to increase or reductions in maintenance and custodial activities will begin to show a greater impact on facility quality.
