BICUC

 View Only
  • 1.  Budgeting for Miscellaneous

    Posted 10-08-2024 16:24

    Greetings,

    We are deep in the budget season for 2025, and I use the zero-based budget methodology. It's relatively easy to forecast regular expenses, such as the quarterly HVAC PMs; however, the miscellaneous/unknown expenses are more difficult to forecast. How do you forecast the miscellaneous expenses that are difficult to know? We are on a cadence to replace our HVAC package units between years 15-20, so there are fewer large misc. expenses that come from that.

    Best regards,



    ------------------------------
    Micah Arnold
    Facilities Asst Manager
    Bay Federal Credit Union
    ------------------------------


  • 2.  RE: Budgeting for Miscellaneous

    Posted 10-09-2024 11:39

    Hello,

    I find zero based really hard to work with in facilities/construction without a contingency line item.  When operating under a GMP contract structure, there is a contingency line item to cover for unforeseen items (ie unexpectant failures of faucets or other mechanical components) as a percentage of the overall costs.   

    I also run the capital improvement items as a separate budget on a 3 year projection, and have projects approved with each budget cycle.  When presenting to the credit union board, it helps differentiate what NEEDS to be done vs what SHOULD be done and what COULD be done.    If something on next year's priority decides to become this year's priority, then I shuffle a bit of what can be pushed out.  Your group's asset size is over 3 times of what I'm working with, so your situation might be different. 



    ------------------------------
    Jonathan Decker
    Facilities Manager
    Intrepid Credit Union
    Helena MT
    ------------------------------



  • 3.  RE: Budgeting for Miscellaneous

    Posted 10-10-2024 17:27

    Micah,

     

    I think we are similar with your zero-based budgeting; our term is "historical" budgeting, and I typically add a few percent to those totals each year, based on the year. (That part has been harder for me the last few years, but I think we are getting back to being able to count on a "normal" amount)

     

    On the "unknown", wouldn't we be good if we could plan for those! I really appreciate you comment on regular replacement, life cycling our mechanical systems and regular maintenance are the best way to stay away from the dreaded mechanical failures. Our organization runs what we call an "unbudgeted" column for situations like this, and our facilities team works to "cover" those with our budgeted projects by "shuffling" things around, similar to what Jonathan mentioned in his response.

     

    Hope this helps a little.

     

    Please don't hesitate to reach out again if you have any other questions.

     

    Richard Breitenberg | CFM SFP FMP LEED GA

    VP-Director

    STCU  Facilities and Support Services

     

    tel (509) 344.2306 | fax (509) 344.2218

    cell (509) 954-9034

     

    stcu.org | Here for good.™

    __________________________________________________________________

     

    Please remember email is not always secure. For your protection, we recommend that you
    never transmit PINs, member numbers, account balances, and any private and confidential
    information over email. If you are not the intended recipient, please delete this message.

    STCU | Headquarters, 1620 North Signal Drive, Liberty Lake, WA 99019-9517

     






  • 4.  RE: Budgeting for Miscellaneous

    Posted 12-04-2024 13:24

    Hi Micah, 

    I use different budgeting processes for capital and ongoing maintenance expenditures. Capital expenditures are budgeted through the zero based process and drilled down to the NEED vs the WANT per location. HVAC is always a need dependent on the status of the system and vendor report of life due to ongoing issues and repairs. I will budget for the unit "just in case" which allows for the expected replacement or funds to be shuffled around for any other unforeseen emergencies that arise if not used. 

    The maintenance budget is tracked per location and calculated on the current year expense, forecasted since I start in August, with an added 5% to cover any rate increases or unforeseen issues. The budget covers all utilities and ongoing regular maintenance such as landscaping, pest control, janitorial, HVAC routine maintenance, etc. This is more efficient for us due to the changes that take place through the year and having to justify any variances.

    Looks like there are some similarities to the processes Richard and Jonathon shared. :)



    ------------------------------
    Christi McGonigal
    Facilities and Construction Manager
    Rogue Credit Union
    Medford OR
    ------------------------------



  • 5.  RE: Budgeting for Miscellaneous

    Posted 12-05-2024 09:53

    Micah - I always add a contingency line to both my Opex and Capex budget.  These dollar amounts covers any unforeseen expenditure during the year.



    ------------------------------
    Sharon Taylor
    VP of Facilities
    Centra Credit Union
    Bloomington IN
    812-340-1485
    ------------------------------