by Auditmate COO Joe Stumph
Auditmate can streamline the budgeting process and limit your exposure to unforeseen vertical transportation spending.
Imagine you are three months into your budget year and the elevator service provider tells you the elevator is down because the broken parts are obsolete and they are unable to get the unit going again. The only solution is elevator modernization, depending on the type of elevator and year installed. You are looking at $90,000 to $280,000 per elevator. This does not include upgrades to fire control, HVAC, and electrical services to meet the current codes, which can add another $45,000 to $170,000 to the total. For a three-car elevator bank, you are talking about $315,000 to $1.2M depending on the number of floors and type of elevator. Not to mention there is an extended amount of downtime for the modernization and inconvenience of the unplanned event.
Understanding how to budget for elevator replacement or modernization can be difficult if you don’t have all the data. The when is driven off two main data points. How old is the equipment? And how well has it been maintained? Quality maintenance done at the proper frequency is the main driver to your elevator equipment reaching its full and useful life (frequency is determined by equipment type and age). Auditmate tools will bring this data together for you, so you are informed to make the best possible budgeting decisions.
Here is the misconception of many owners and property managers. Reducing maintenance costs saves money. Let’s do the math, let’s say you have a three-car 10 story elevator bank. You pay $1,000 per month for maintenance and you leverage the service provider to reduce the cost of service. They agree to reduce the cost by 20%, with the stipulation that they reduce scope and frequency to make up the difference, a very common tactic in the industry today. You saved $24,000 over a ten-year contract but accelerated the modernization five to ten years sooner at a cost of $800,000. This does not factor in equipment repairs billed for because of less maintenance, tenant dissatisfaction, downtime, and escalations.
I am not advocating that you should pay more for elevator maintenance. I am however saying as elevator equipment ages, getting proper maintenance at the proper intervals is more important not less, and will save you money. Here is where the rubber meets the road. Having a contract that details the frequency and tasks covered and the tools to ensure compliance will save you big dollars in capital spend and allow the equipment to reach its reasonably useful life. So when you budget to modernize in fifteen years, it will actually happen in fifteen years instead of five or ten years.
Come and visit us at Auditmate, take a look at our CARE (contract auditing and regulatory evaluation) and SAFE (specification and field evaluation) products. We can help you with every part of your vertical transportation needs. We are not a consultant company, we are the first of its kind SaaS elevator contract auditing software. We use our 170 years of experience and your data to give you all the information and guidance you need to make educated decisions as it relates to your vertical transportation.