Gateway Foundation, a Chicago-based not-for-profit corporation that provides effective drug and alcohol abuse treatment in community-based and corrections settings for people without financial resources, operates multiple facilities and campuses in several states. Although they had an annual operating budget of over $3.5 million for facility-related expenses annually, Gateway did not track facility costs as a stand alone operating component. They were unable to tell if they were underspending or overspending on items such as utilities, cleaning, maintenance and repair, facility supplies and other facility costs. Annual capital projects were not planned or analyzed centrally, resulting in some sites having a series of major capital improvements while others were in a state of disrepair.
HSA worked with Gateway’s finance group to develop a process for tracking and benchmarking the facility-related costs, both operating and capital, for all of the Gateway sites. Facility costs were benchmarked against one another and against IFMA and BOMA survey results. Historical spending for each site was also researched and analyzed.
Quarterly meetings were scheduled with business managers, finance and facility staff to review and analyze actual facility costs for each site against plan, against other Gateway sites, and against applicable standard benchmarks. Capital plans were drawn up by visiting each site, preparing a list of items requiring capital investment, prioritizing those projects, and comparing the final list against the existing 20-year capital plan, which was updated in the process.
Gateway Foundation can now track and analyze facility costs for each of their sites. Where sites were overspending in comparison to other sites and to benchmarks on a square foot basis, service/maintenance contracts and other maintenance issues were analyzed and, in appropriate cases, service contracts or repair procedures were adjusted. In addition, the annual budgeting process for both capital and operating expenses related to the facilities has been tightened and streamlined so that the plan is more realistic and is in line with Gateway’s overall real estate strategy. Initial cost savings of over $100,000 were achieved and ongoing management of facility related expenses were tightened through HSA’s efforts.
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