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Finding Funding: Tackling Deferred Maintenance

  July 27, 2018

By Dan Hounsell

Maintaining an institutional or commercial facility costs far more than building it does. That fact is lost on many facility executives and building owners, but maintenance and engineering managers understand it all too well, and many of them have huge amounts of deferred maintenance to make their case. Given this situation, many organizations, including state and county governments, are getting creative in their efforts to fund maintenance.

A growing number of municipalities are turning to alternative funding mechanisms that create new opportunities to turn deferred maintenance into innovative improvements, according to Route Fifty. These governments are using savings from energy conservation improvements, along with other alternative financing options, to create a budget-neutral solution to fund infrastructure and maintenance projects.

Known as energy savings performance contracts (ESPC), they allow municipalities to make significant facility improvements without tapping into annual budgets, bringing together financing, technology and operational efficiency into one initiative.

The ninth largest county in the United States with more than 2.5 million residents, Dallas County was spending millions each month on utility expenses due to inefficient lighting, outdated technology and unchecked water use. County officials partnered with a manufacturer to develop a multi-phase ESPC project that uses projected energy savings to pay for infrastructure improvements.

The project reduces Dallas County’s utility bills and operational costs by 23 percent annually, which equals more than $90 million in projected lifetime utility and operational savings over the term of the estimated 20-year contract. The project has also made a significant environmental impact on the community by reducing carbon emissions by more than half a million tons.

This Quick Read was submitted by Dan Hounsell — dan.hounsell@tradepressmedia.com — editor-in-chief of Facility Maintenance Decisions, and chief editor of Facilitiesnet.com.


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