I am always very pleased when a client is successful in securing additional funding to address their Deferred Capital Renewal and Maintenance (DCRM) Backlog.  However, there is a potential trap that I have seen clients fall into occasionally when telling their story and making promises based on the additional funding.  

I have seen clients make statements where they are promising that with an extra $10 Million, they will reduce their DCRM by $10 Million.  Unfortunately this is very difficult, if not downright impossible.  Setting this unrealistic expectation can erode trust with your stakeholders and potentially result in more harm over the long run.  

There are lots of perfectly valid and defensible reasons why every dollar spent on renewal and renovation projects wouldn’t directly address DCRM, such as:

1. Doing renovation work of a space to improve programming/functionality where all the elements replaced are not part of your DCRM;
2. Addressing code or accessibility liabilities during a renovation project;
3. Upgrading existing equipment (since DCRM is based on replace-in-kind) to a more durable/sustainable/efficient product;
4. Adding new elements that were not previously present within a building as part of a renovation or renewal project;
5. Projects that come in over budget (imagine that!);
6. Advancing element replacement that is forecasted farther into the future as part of a major or deep retrofit within a building; and
7. Any other project that is done not specifically to address DCRM.

In each of the above cases, money that you are investing in your facilities won’t directly correlate to a reduction in your DCRM for a variety or reasons.  That does not mean that the capital plan and associated prioritization was done poorly.  It just means that there were other drivers to your investment decisions.  

The best way to avoid creating an unrealistic expectation is to educate your stakeholders so they don’t expect a 1-for-1 reduction in DCRM based on available funding.  Also, when seeking approval for a prioritized (ideally multiyear) capital plan, make sure you explain/justify the reasoning used to pick the specific renewal projects that are part of your plan, especially in cases where you have decided to implement one of the strategies we outlined above.

Getting additional funding is generally very difficult (although many folks have received a bit of a windfall as a result of pandemic funding).  The last thing you want to do is destroy trust by creating unrealistic expectations with your stakeholder.  Invest the time in creating clarity for all parties and enhance your trust instead.