Are you ready for 2024 budgeting?

Alright. Good afternoon, and welcome to Brightley's Software's webinar today. Are you ready for twenty twenty four budgeting? We're so happy that you've all joined us for this interesting and informative discussion. Before we get started, here are some housekeeping items, you will be muted during today's session. I'm sure you'll have several questions for our speakers today. Please submit them using the Q and A feature on the left of your screen at any time during the session. The speakers will answer your questions live at the end of the webinar. Or follow-up with you in case we couldn't get to them live. The session is being recorded and you will receive the recording by email There is a short survey at the end of this webinar. We would really appreciate it if you filled it out. So now let's get started. Today, you will hear from Justin Morrison, senior sales manager, and Katie Gramajo, senior industry marketing manager, and Bright Lee Software. The floor is all yours, Justin. Go ahead. Thank you so much. And good afternoon, everyone. Welcome to today's webinar, optimizing facility budget for the upcoming school year. Feel to have everyone here. My name is Justin. And I will be your host today. And with me, the star of our session, we have Katie Gramaho who is a former director of operations and Afra certified educational facilities professional. Thanks for joining Katie. Thanks for having me. Just it. Sounds good. She's gonna be walking us through the challenges of the budgeting process and how they utilize the resources to form and accurate data driven budget. So, Katie, first things first, you know, we we know that finance leaders have a set of guidelines when comes to budgeting, but they also need help from the folks on this call, especially when it comes to managing the risk of the key assets and formulating a capital budget. This calls for strategic approach And a lot of time and and and to create that operational budget as well as a a capital budget. So I guess my first question for you here is what goes into a facility's budget. And what is the biggest differences between an operational budget and a capital budget? That is a really good question. That I would I will admit I wasn't sure of until I was in a role like these when I was working at schools. So as a facilities professional, which I'm assuming most people on this call are or facilities adjacent, your most obvious thing you're looking at is the day to day operational budget. So that essentially means the costs to run the school, the maintenance overhead, the utilities, the salaries, What does it cost just to keep the school running? And then often your superintendent, your CFO, the people in the finance team will come to you and ask for your capital budget forecast or your capital plan, what is your future, expenses And so what that means is evaluating appraising and determining what your long term project expenditures are for facilities that might be new construction coming down the pipeline or critical health and safety improvements, physical asset meaning you know an asset is going to need some repairs or replacement, possibly fixed assets that you're going to be purchasing, like a new land or a new building. And so you'll wanna know those things as well as your day to day operational budget. Good insight. Good insight. And I guess I guess my question my next question here is, what are the key steps to creating that that budget and and How where where should I start if I if I am a facilities leader? Yeah. Sometimes it's overwhelming to even think about starting other than the things you already know you have to pay for it in your deferred maintenance backlog. So, the first thing you'll want to do is look at your current facilities assessment. Most schools will have an official FCA facility's condition assessment, but it might be outdated and we'll talk about that later but the first thing you wanna do is assess what you've got. The next thing you're gonna wanna do is list your priorities So start with your team's priorities, but also what other stakeholders are prioritizing for your budget next year? It may mean sitting in on meetings and meeting with other constituents to see what's coming down. The next thing is review historical data It seems obvious to look at what's happened in the past, but you also need to look at where you've been overspending and where you've been repairing a lot, what's caused a lot of downtime. So that's the next thing. And then the hardest part prioritizing. What do you need to get done and why and be ready to justify what those things are? And then once you decide, you're going to research and estimate costs. So what that means is bid out your projects and keep your vendors on your toes. And I know Justin doesn't like to hear me encourage that, but it's good business practice. And then your final step is considering those CapEx long term expenditures that you're gonna need big money for in the next few years. Yeah. K. We definitely have a nerve there, and I would love to kinda go to the audience at at this point. Where are you in in the budget process with everything? So if you go ahead in in in go ahead and vote. I guess the first option, had it done before in the holidays in good shape, followed by the c and d for the other options. And we'll close it up in about thirty seconds. Yeah, Katie. You really, really struck a nerve there. Sorry. I'm sorry, but it's good practice. Hopefully, you're so confident that you'll be renewed. I will drop you. You've been in the seat before, and and I'm I'm on the other side of it. So Alright. So great. So let's take k. Let's take a step back really quick. So Sam and facilities leader, what should I be looking at when I'm defining my goals in in initiatives? And and how can I go ahead and and convey my new goals and initiatives to some of the stakeholders that are looking to me to run the facilities on a day to day basis? Yeah. So what we talked about is obviously first assessing what are the repairs you already know you need to get done that you've been waiting and waiting to ask for. But then you wanna look at a really thorough condition assessment in possible. If you have one, it's probably a giant binder that you spent a lot of money on that's sitting on a bookshelf somewhere that may or may not be out of date. When I got my job at the Windward School, I had a facilities condition assessment, and it was containing one building that we still had and two that we did not. And we had two new buildings. So sometimes they're out of date very fast and you'll need to do your own. And if you're unable to get an engineering firm to do it, I would and you get your own staff to do it. You can do it. You know your buildings, you know your assets. And at least you can get a detailed list of what needs repairs. And if you already have a very thorough preventative maintenance plan, you may already know that information. Perfect. So if I'm hearing this correctly, I'm looking at some of the the historical data and looking through my binder that I have to dust it, the dust off it and everything else. I guess, how how does historical data, play a factor in when I should be creating my budget? Well, you're jumping ahead, but I'll jump ahead and then go back. Sorry. That's okay. I gotta jump ahead to that question, then we'll go back. So it does make sense. You're gonna review your historical data after your condition assessment. So you're gonna look at your past budgets. And analyze what you've been spending a lot of money on, and also staffing costs, supplying all your supplies for your maintenance staff, and then your utilities, things like that. And really identify your overspending trends and where you could possibly save money. Something that's interesting that's often overlooked is if you have something broken all the time, like an air conditioner that keeps breaking you're gonna have a lot of staff over time that you might forget. And that is included in the cost of that asset because that's staff has to constantly do overtime to meet a vendor or repair it. So try to keep that in mind. It'll help your argument if you need to make an argument to buy something. And then you wanna obviously know what your planned maintenance is, what you normally do every year. But then you also wanna try to make assumptions and this is something you can do with your finance staff. You can try to make assumptions of if you're in a public school district, is there a new housing development? That means they're gonna have increased enrollment that means you're gonna need to add more students to classrooms that don't necessarily have the room for them. Or are you are you adding a new program and not sort of thing. So, those assumptions can go into your historical data. And I'll actually let you go back because I did jump ahead. That's okay. Sorry. We're now we're here. So I'll go back into this one and I'm gonna move to what you can do. And I guess it's negligible. You could do your priorities after your data, but I'm usually doing these all at the same time because you're setting up meetings with the department chairs, with the people that have, a say of what happens at your school. So the first thing I always do is start with my own team. And selfishly, what are your safety goals, your compliance goals? Is there something you been asked to do in terms of compliance and energy efficiency. And what are the things that your team really needs to focus on first? But then also attend as many meetings as you can with administration, especially academic administration, to see what programs they're starting. I mentioned that a little bit. But if they're starting a new program and you're gonna need a new science lab or a new maker space, that's a buzzword in schools, then you're gonna have to make sure you're planning accordingly. And you never know what staffing changes might just something as simple as you have a bunch of new admin staff that need offices and then they don't realize you don't have those offices, and then you put someone in a closet. We've all been there. So you wanna also stay up to date on what initiatives grants requirements are coming down the pipeline. And if you are in any organizations like app or obviously LinkedIn or you found us here on Britney, and I'll tell you about them. Then you'll know what you need to do. And then like I said, meet with your stakeholders ask them for a wish list and what they really would love. And then you can temper their expectations and decide But I'd rather know in advance than have them come to me after I already set my budget, did all my summer projects, and say, Oh, I forgot to tell you I need all these new cabinets in classroom and you didn't anticipate for it. So better to know than to not know. Yeah. And I guess that's how you you end up being in the in the broom closet Yeah. For all these reasons. Right? I feel like everyone knows someone whose office is a closet. I think we have our next poll. Yep. So quick poll from everyone. So have you considered a digital CMS before? Or are you? I'll give you about thirty seconds. I'm really curious about this one obviously bias reasons. But they're there. So as we're as we kinda jump into the the next, point here, looking at prioritizing and maintenance in in the upgrades. So what are some of the things that I should be considering, when I'm creating these tasks and and look at the at these upgrades if I'm a facilities leader. Yeah. That's a really good question. And I'm sure everyone in here knows, but give a mess as a computerized maintenance management system. So if you didn't know, and it's it would really help the slide previous about your historical data because you'd have it all right there, but I'm not biased. So when you're prioritizing, first thing I always think about is the obvious, what is urgent safety and impact? The impact is in a school, what affects day to day learning? Is there something that can only happen when school's not in session over the summer? Is there something that has to happen on Saturdays? Cause you have summer camp as well, which happened at every school I was in. Or is there something that affects the school in that, my, it might cause downtime for the school because, like, you know, if your heat isn't working, you're not gonna be in school, maybe. So those are big things that you wanna prioritize. The next thing that It seems obvious, but as sometimes I don't think on facilities, directors minds, myself included, is what's the school's mission. If your school has a very specific mission, the heads of school will constantly be discussing their priority based on that, the board of ed, the board of trustees, whomever is in charge. And so the Windworth School was for students with dyslexia and language based learning disability. So our mission was to get as many students as possible. Our services, which means if that's the mission, then expansion is our is our priority and fitting more students in the classroom is our priority. If you're a school that really is performing arts based, then that would take your priority. You would assume they would put money into the theater before the gym, as someone that to sing opera. I care about that, but my dad's a gym teacher, so sports are his thing. So I like both sides, I guess. And something you can do when you're trying to figure that out is create a priority matrix. Again, if you have software to do That would be great. But if you don't, you can do it with an Excel spreadsheet. You can do it yourself manually. It just takes more updating, but you would do your building type, your asset requirements, your budget, and specify your life expectancy and what your preventative maintenance plan is. Something I learned with APA and taking their CEP courses about the facilities condition index, which is a great database. You can use to explain why something needs to be prioritized. So it's the total replacement value of the building and renewal divided by the of replacing the building. And then you can create a scale of good, fair, poor, critical. And then you'll be able to help explain the data behind what building is a priority, not just as building as old, because that's not always the answer. Sometimes in old buildings in better shape than a newer one, you never know. So Yeah. And this is the part where I asked you to sing, but I'll I'll I'll wait for another another time for Oh, yeah. I shouldn't have mentioned that. Nope. Learning something new about you every day. Right? I guess my next question for you is as as I'm kinda looking at this as a repair versus replace conversation, right? How how can I start to look at that and estimate the costs? That's a good question. So the slide you're gonna hate is research and implement an estimate the cost. So, at my both of my schools because they were independent schools and not large universities, no one even had a thorough RFP process, except for if it was a massive purchase, but really you need an RFP, which is request for proposal process, even if it's just a one page word document that helps you collect bids so that you make sure you're doing apples to apples bids. So ours was simple. It was literally when to do, where location, what's the overview, what's the detailed scope, what's a roadblock to success. Meaning like we can only do this on a weekend because everyone needs this room or anything like that. And then you'll be able to really evaluate your bids on the projects that are one time projects, but also reevaluate your yearly contracts, and you should really establish an RFP timetable. I didn't click. Here you go. Should establish an RFP timetable, just to make sure you're getting competitive pricing, but also to keep vendors on their toes, make sure no one's compromising on more quality. And I know we've all been there where there's the same vendor you've had for twenty five years and no one's really watching them and no one's really making sure you're getting what you're even paying for. We had an HVAC vendor who will remain nameless that had been there forever. And then I came in and we assessed the building and realized that they weren't even servicing one of our units because it was behind a wall that they couldn't reach. And instead of telling us, they just didn't service it. So always good to reassess. Again, sorry, Justin. Yeah. Another one, this is twice in the in the same webinar here. That we really quick tracking a nerve but I guess I'll roll with hundreds here. Talk to me about preventive maintenance and and how I can track that and and and also kind of build that into my my budget. Yeah. So when you know your preventative maintenance, if you already have a preventative maintenance plan, that's something that you're gonna know, you know, we've serviced this this many times a year. We know that these things need to get done annually. And then you'll know your life and see of most of your most of your assets. But you really need to also plan for major renovations replacing especially the big things roofing HVAC, you know, we keep talking about HVAC, but it's a big one. And so you wanna make sure those are planned, but also the more you have those planned, the better you can have extra funds for emergencies. So If you have proactive preventative plans, then if an emergency comes, you've already foreseen a lot of the budget and put it aside for placements. So then you'll have extra budget to use it for any sort of emergency. Hurricane Ida happened here in New York literally two days before school starts. Floods our whole school. We had to delay start to do mold remediation. It was not cheap, even with insurance. And so the more you have your plan for everything else, then at least you won't have to dip into those funds because you didn't prepare for those, and then you can cover any emergencies. And we all know they happen. And it will also help you really have the data to give the finance leaders to tell them what you need and why. I think that's the hardest part for facilities leaders is the why. Why why is this the important thing? I always use the analogy of going to car dealership, though maybe some of you are really good at cars, but I'm not. And so you're just trusting someone else to say, yes, that's what I need. Yes. I'm gonna I'll pay for that because I don't actually know if I need to pay for that. So the more you have the data, the more it will help. That'll help you outline your priorities for your capital renewal replacement, deferred maintenance. And then like I said, keep your separate funding for anything else. Major repairs, new construction, that come down the pipeline that will probably have a separate budget. Yeah. And you mentioned HVax, and I know this is a a type of subject for a lot of districts that are out there. And I know for the fact that fifty four percent of districts are trying to replace that right now. And they're looking to find the funding for it I really appreciate going into into detail with that. I can't speak for everybody on this call right now, for the rest of the audience, but this was a lot for me to take in and I and I learned a lot. I appreciate it. But as a millennial, I I have to ask this, how can technology help out? Yeah. So, I mean, for me, I I think when you do something and this sounds so obvious, but I'm gonna say it anyway. When you do it manually, you have to redo it all the time. And you don't have that historical data. You don't have the contingency plan. What we used to like to say was for when I win the lotto and disappear. If someone retires, if someone leaves, you don't have the records, So you're really helping by having a digital CMS plan, a software based asset management plan because it's all there. And you can refer to it and it can give you the information. So even though it may be scary to start inputting the data once it's in there, it's in there. And it's constantly updating by itself and it's doing it all for you. And then when your CFO says, Hey, what's the budget for next year? You can just literally pull it from the software instead of having to recreate another Excel spreadsheet. Maybe you love Excel spreadsheets kind of do, but it is a lot easier. So it's worth the startup time, at least to me, because then you have it. And then like I said, also, you have something other people can reference, your staff, your assistants, whomever needs that information, and it's not all in someone's head or someone's notebook in their desk drawer locked up. Yeah. And and if they leave, then then all that information is is now gone as well. And we're back their run. And but if you are looking for some technology, I know a guy. I'm not gonna be biased towards us or anything, but just just, you know, give me a call. Connecting me on this thing. Here's a guy and here's how to find him. Exactly. Exactly. No. I really really appreciate it, Katie, going into all the details. So, yes, these are some of the resources these you passed out at the end as well. But really appreciate you going into all the all the detail and sharing your insights around everything. So And actually, I'll do a quick plug, Justin. On the blog that we linked here, which you may have found this webinar from The next thing we're really talking about is the renewable energy grants and all of those that were just released in January. So we're gonna talk a lot about how you can apply for the funding and how you can justify what priority you're going to apply for. And again, if you have digital software with your data already in it, then that'll help back up back up your grant propose So more information on that soon, but it's a good one. And that recently came out. Right, Katie? Within the last couple of weeks. Good stuff. Glad to see, glad to see people are getting some help out there. So I guess we can turn it over to questions from the audience. I'm going through this and I have one gear. So I'm used to doing a budget manually. Why is this worth the time? I think I a little bit of what I just said, which is that once you have it in a system of some kind, it's easier to recreate every year, but I think also it helps you pull from not necessarily opinion. It gives you actual real time fact based data in what you can pull from for your assets, what they're worth, what's coming down the pipeline, what's the lifespan, and also you're not relying on like I said, human opinion. Just like when you go to that car dealership and you're kind of nervous about if you're making the right choice, and you can really justify that choice and you can just if I had to all the board of trustees and board of ed and people that are asking you why you're asking for money. So I think that really helps. It gives you the why a lot more than just doing it yourself. Yeah. And I can't say how many conversations I've had with with facility leaders where that is the case, right, being able to justify those budgets, back to everyone that's that's a stakeholder in that, and they wanna know how to measure the success of this investment. It all comes back in one big beautiful circle. Next question I have here is is how much data input is needed to configure a CMS system. Sure. I will start the answer, but I feel like you can answer too because you help people input all this in their CMS system, but it's basically your facility's condition data. So you're asked what the type they are, what the age they are. So it's literally going around depending on how many buildings you have, how many systems you have, and getting that data. So you should hopefully already have some sort of spreadsheet or list of this going somewhere. If you don't, it will take longer. But if you do, that's really all you need to start. Am I missing anything? Just No. And honestly, one of the great things about Riley is is we have a team that's dedicated to Right? If you have some data that is out there, work we'll work with you. Right? We'll make sure that data gets inputted correctly. We'll format it for you as well. Even if you have that FCA that's been, you know, kind of sitting out there as well. Let's take a look at it. We wanna help you guys make these data driven decisions, and make life these lot a lot easier for you, down the road. Kind of looking at I think we have time for one more quick question. What about energy management This must be coming from one of your blogs too. Yes. I love sustainability and energy management. I know not everyone is as keen on it as I am, but I came from Los Angeles where it was big twelve years ago. And now I'm on the East Coast where we're getting there slowly catching up. But the best thing about having software is that you can really assess your energy use. And I think a lot of the things that happen with sustainability, and this is my panel at illuminate if you're coming to illuminate. Is that the community is requesting sustainable improvements, not just government mandates and possible grants. And so if they're requesting it, not only how do you decide if you're gonna do it and the costs and the return on investment on that, But what do you do to show people that you've done it? How do you show them that you saved energy? It's very hard to do. And so if you have something like our energy manager. And again, I am biased, but it will show you what data you're using so you can cut costs or and how much energy you're using and how much water you're using and all the utilities. And then it will give you that down board to show your community that you made those changes. And so if your school's prioritizing that, either because there's a grant or there's a push especially in higher ed. It's a huge push from this community and the students and I've I've said to everyone one of my cousins is very she's much younger than me and she's in college and she's very into sustainability initiatives. And so are all of her friends. She actually got a master's in food justice. So, yeah, exactly. It's about sustainable farming if you didn't know what that meant. But I didn't know to that point. But it helps with your enrollment in your community. So you will be asked to do it. And at least then you can justify how you did it and that it actually made improvements. Okay. That was the that answered that right. I mean, if it was one thing I learned, I learned what a new major is. And then, and that, again, like, something I need to look into after this. I do know they have another question from Jennifer. What do you do, regarding assets that have an estimated life, which is entered into the CMS system. But which could hang on significantly longer with sufficient maintenance. Yeah. That's a great question. I think, how I normally assess that is you plan for the obvious life expectancy ten years and plan to replace it when it needs to be replaced. But if you're getting close to the life expectancy and you have something in place, like you said, a digital CMM then you'll be able to see, okay, it's still in really good shape. The vendor also tells me it's in good shape. I don't think I need to replace it. And you could always switch your plan but you would wanna think about that obviously before the year it comes up. So if it's due twenty twenty four to be replaced, you wanna think about that in twenty twenty two so you can figure out what might be replaced with the budget you were planning. So if it's ten thousand dollars, now you have that. Is there something else that's in worse shape that you thought would last that swap it. Yeah. And then that really kinda goes back to managing the risk of the asset. The last thing you wanna do, especially it's if they if it's a key asset, such as a boiler is have to go down in the worst time of of year. Right? Really trying to getting a hang ahead of that as much as you can. And that CMS should be helping you with that. I know for a fact that with asset essentials on on our side over here, there is a little bit of capital planning that's that's involved in you can see a little bit of the heat map, and look at, you know, how many more years you have left, on on that key asset. If you're looking to take that to another level, you know, we we can have another conversation with, with you Jennifer about predicting even the the the asset failure five, ten, fifteen years down the road, more than happy to to to talk to you a little bit more about that. And the funding smart intro, but the funding options for Maybe it's cheaper to replace it even if it's not totally dead and know what that looks like. Absolutely. Absolutely. Have another question from from, Ray. Average annual costs, oops, sorry, jumped. Average annual costs of CMS such as s, such as FMX. Ray, I'll be honest with you. Everything is customized as as far as pricing. So more than happy to talk to you a little bit more about that. If you wanna connect with me on LinkedIn, or even reach out, more than happy to talk about that and and see what we can come up with you for a a cost of that. So we have Patricia. How do you regularly schedule PMs influence life expectancy of equipment. Yeah. I've I think the more regularly scheduled preventative maintenance, the better your life expectancy is just like your car. Just like your oil changes. My dad said, get it done or your car is not gonna be running as well as you thought. It's the same, my general idea. Obviously, it also depends on the equipment, the brand, the installation, the vendor. It depends on a lot of things, but the more accurate preventative maintenance you have, the more regular preventative maintenance you have, I think, in most cases, you will be running with a longer life expectancy than if it's neglected. And if you come into a job where someone has been neglecting it, you might still be able to save it by jumping in and starting a preventive maintenance plan as soon as possible. Correct. And I couldn't agree with you more, and that's often the argument that I make around PMs, you know, you don't buy a car and then not change the oil every fourth or four to five thousand miles and then let it seize up what the engine sees up. Right? You you you keep up with that maintenance on it. Otherwise, it is gonna be to put after, you know, seven years. Again, depending on on on the naked model. Say what type of car we could discuss that? Right. Right. Exactly. We won't get into that argument by any means, but there there's a, there's a lot to learn from that, the oil change, piece of that too. So just taking a quick little gander here to see if there's any more questions. And I don't see anymore, but I really do appreciate the the engagement from everyone. Okay. Well, awesome. Well, thank you so much everyone for for joining us. Good, Trudy. Yes. Thank you. Thanks everyone for joining us today and for all of your questions. We hope you found this session informative. So Just a reminder that the session was recorded, and we will send you the recording shortly. Please review our related content section for additional resources from this webinar. Katie and Justin have put together a list that you may find interesting. And lastly, reminder to please fill out our survey at the end of the session. Thank you very much. Have a great rest of your day. Thanks, everyone. Thank you.