Running head: COST CONTAINMENT DOCUMENT NUMBER ONE
Cost Containment Document Number One
Ruby D. Johnson, RN, MSN/Ed.
Cost Containment Committee Chair
Ozarka College
March 26, 2012
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COST CONTAINMENT DOCUMENT NUMBER ONE
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Cost Containment Document Number One
The Cost Containment Committee was formed in an effort to review areas within Ozarka
College, including sites away from the main campus, which can be modified, updated or deleted
in an effort to contain the cost of operating Ozarka College to better conserve resources and
eliminate waste in multiple areas. This report will address areas of concern formulated by the
Cost Containment Committee after data gathering activities and research for best practices.
These areas will be addressed individually and include thermostat controlling, preventative
maintenance planning, energy consumption and safety of electric heaters, and additional
insulating of ceilings, ductwork, and outdated windows. Recommendations will be listed at the
conclusion of this report.
Thermostat controlling is difficult to maintain with the current thermostat covers at
multiple sites and some with no covers, as well as no designated monitoring protocols.
According to ("Myths and Tips," n.d.) setting the thermostat down or up by 10-15 degrees while
you are away can add up to 5 – 15 percent savings on the energy bill. There would be some cost
in replacing thermostats, but the cost may outweigh the expense in heating and cooling over
time. Setting temperatures as low in the winter and as high in the summer as comfort allows can
save large fluctuations and workload on the systems ("Smart ways to save money," n.d.). Those
without covers are manipulated not only by faculty but also by students with no assurance that
they will not be left running at full capacity overnight or all weekend long. There are
programmable thermostats that can have as many as six predetermined settings and can be set to
increase or decrease automatically with no need for manual manipulation ("Thermostats and
Control Systems," 2011). However, since the Committee members are not familiar with all the
heat and air systems we have, according to the same article (p. 3) they cannot be used on Heat
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Pumps in the Heating Mode. There may be further reasons these cannot be used for all purposes,
but it is felt that they could be used in many. With further investigation into programmable
thermostats, it is not always prudent to go with factory set programs; they need to be customized
to the individual usage and outside temperatures (Carter, 2011, p. 3).
Preventive Maintenance Planning seems to be an area where opportunities are missed to
maintain what we have. Maintenance is not just repairing something when it is broken but
keeping everything in proper operating order. This includes coils on the freezers which
reportedly have not been routinely maintained and has cost several thousands of dollars in food
spoilage over the past years in both the culinary department and in the kitchen. Routine
checking of structural cracks, window leaks and drippy faucets are examples of repairs affecting
cost containment. Preventative Maintenance is a means to correct areas, maintain existing assets
and promote the well being of the college as a whole. The Committee agrees that a preventative
maintenance list be compiled and suggestions are in the Addendum. One member of the
committee worked for Parks and Tourism and stated that they used a computerized program to
generate work orders throughout the year for preventative maintenance. According to
Preventative Maintenance, 2007, "long term benefits of preventive maintenance include
improved system reliability, decreased cost of replacement, decreased system downtime, and
better spares inventory management." Early preventive maintenance on new equipment and
vehicles usually start at an increased cost but level over time. Increasing the life of the asset and
defraying the cost of replacement is a practical way to help with institutional cost containment
over time. The following graph indicates the cost curve for preventative and corrective
replacement ("Preventative Maintenance," 2007, table 7.4).
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Figure 7.4 shows the Cost Per Unit Time vs. Time plot. In this figure, it can be seen that the
corrective replacement costs increase as the replacement interval increases. In other words, the
less often you perform a PM action, the higher your corrective costs will be. Obviously, the
longer we let a component operate, its failure rate increases to a point that it is more likely to fail,
thus requiring more corrective actions. The opposite is true for the preventive replacement costs.
The longer you wait to perform a PM, the less the costs; while if you do PM too often, the higher
the costs. If we combine both costs, we can see that there is an optimum point that minimizes the
costs. In other words, one must strike a balance between the risk (costs) associated with a failure
while maximizing the time between PM actions.
Energy consumption and the efficacy of space heaters is an area that stimulated great
discussion and research. According to the November Issue of Arkansas Living (Rye, 2011),
Electric heaters cost about $3.60 per day to heat one room. The majority of the single space
heaters were found in the older buildings on the Melbourne campus. There were twenty-eight on
the main campus, six at Ash Flat, two at Mountain View and two at Mammoth Spring for a total
of thirty-eight (38) heaters at a cost of $3.60 per five days would equate to $684.00 per week.
One could not fully calculate this for 52 weeks for the entire year, but there are some who run the
heaters even with the air conditioning running in the summer. Even calculated to sixteen (16)
weeks of running it is estimated to be $10,944.00. One maintenance worker, not serving on the
committee, agreed that the space heaters often cause circuits to overload, tripping breakers thus
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computer information that has not been automatically saved could be lost, costing man power
dollars to re-enter data. Some measures to reduce their use will be discussed in the next topic
area. Heaters should be replaced if they are over five years old according to D'Orio (2006), "one
of every ten energy dollars could be saved by turning off lights, leaving space heaters at home
and turning off computers." The committee also collected data regarding lights left on in areas
with no occupants, there are at least 30 lamps left on and nine fans running on the days data was
gathered. Another concern was plug in air fresheners as a fire hazard of which caused a recall of
five million air fresheners from SC Johnson (2002). Highland school district prohibits the use of
air fresheners while the U. S. General Services Administration "does not allow portable heaters
in office space, except under special circumstances, because of their inherent fire hazard.
Additionally, the use of portable heaters hinders our energy conservation efforts, which are
mandated by the Presidental Directive on Energy and Fuel Conservation by Federal Agencies
(2006).”
The last area we would like to address in this report is that of insulation of the older
buildings on the main campus as well as insulating the duct work and replacing the large single
pane windows on the north and south sides of the main building. Over the years, additions have
been added to the main building to provide needed office space and to accommodate growth.
However, throughout these processes much of the insulation is gone above the ceiling tile which
lets the heat out during the winter and in during the summer, overworking our units. This also
causes condensation on the ducts which drip on ceiling tiles. Recommendations for atic
insulation is at least R-30 and in the walls at least R-13 and could reduce energy consumption by
8-10 percent per year ("Myths and Tips," n.d.). Cosmetically, the overall appearance looks
acceptable, but with futher investigation into storage areas and computer/electrical closets, one
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can see the missing tile and insulation, allowing for loss of energy and higher bills. In many of
the block walls there is no insulation such as in the IT supervisor’s office. Also, there are
missing soffit and adjoining structures that were not properly sealed off from the elements such
as old attic fan vent. These are some of the reasons why so many space heaters are used in an
effort to stay comfortable. The large single pane windows are very outdated, with some brick
work, smaller more energy efficient windows could be installed to deter the cold and keep the
cost of energy contained. Upgrading leaky windows with energy efficient models is
recommended with a U-factor of 0.30 or lower and with low-E coatings ("Smart ways to save
money," n.d.). Adequate ventilation of the crawl spaces between ceiling and roof would also
lower the cost to cool and heat along with the added insulation. Running systems to deter mold
growth is not cost effective, especially in empty buildings according to D'Orio (2006).
Monitoring the humidity and activating systems to decrease the humidity levels can be more cost
effective.
In conclusion, the Cost Containment Committee worked to identify ways to decrease our
cost and be more efficient with addressing the areas of concern. For this report the following
recommendations are made:
1. Ensure that the entire Main building has insulation in the ceiling;
2. See that ductwork is sealed and insulation wrapped around it;
3. See that vents can be opened or closed for comfort in the individual office;
4. Check that ceiling tile is secure in all closets and attic access areas where wires
or pipes exist;
5. Devise a true Preventative Maintenance Schedule (See Addendum);
6. Replace outdated windows systematically beginning on the Administration
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Building-North.
7. Develop Policy for thermostat settings;
8. Replace thermostats with programmable, lockable units systematically;
9. Deter fire hazard through policy for heaters, candles, lamps, air fresheners;
10. Seal all sofit areas where additions have been added; and
11. Maintain ventilation and humidity levels by appropriate monitoring.
The committee concludes this first report and will be working on additional areas of
concern. Feedback to the committee is very much welcomed and appreciated.
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References
Carter, T. (2011). Suggested Thermostat Settings. Retrieved from
www.askthebuilder.com/B367_Suggested_Thermostat_Settings. shtml
D'Orio, W. (2006). Circuit Overload. E Magazine, July/August. pp. 22-25
Energy Savers: Thermostats and Control Systems. (2011). Retrieved from
www.energysavers.gov/your_home/space_heating_cooling/index.cfm
Energy-Saving Checklist. (n.d.). Retrieved from www.naeci.com
Myths and Tips about Proper Thermostat Settings. (n.d.). Retrieved from www.everydaywisdom.com/thermostat.html
Plug-in Air Freshener Overheats. (2002). Retrieved from
http://www.dailymail.co.uk/news/article-497446/Plug-air-freshener-overheats-sparkshouse-fire.html
Preventative Maintenance. (2007). Retrieved from
www.weibull.comSystemRelWeb/preventive_maintenance.htm
Rye, D. (2011). Tips to Cut Your Utility Bills. Arkansas Living. November, p.26
U.S. General Services Administration. (2006). NCR Service Delivery Support Division Bulletin.
Retrieved from www.gsa.gov
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Addendum
YEARLY & MONTHLY PREVENTIVE MAINTENANCE PROGRAMS
HEATING & AIR UNITS
1. Yearly service on all heating & air units. This should be done right after the heating season or
a week or so into the start of the cooling season. Service technician check coils, Freon,
wiring, fans etc.
2. Monthly changing of all filters, depending on the filters. Most are 30 day filters.
3. Keeping thermostats set evenly as needed to the changes of the outside temp’s
4. Lock boxes placed on all thermostats.
5. Insulation placed on all return piping. This will prevent condensation leaking down on
ceiling tiles and avoid tile replacement.
6. Cut usage of space heaters/ fans & lamps. Possible making it a policy.
REFRIGERATORS & FREEZERS
1. Yearly cleaning of coils. This will prevent units from overloading and shutting down,
preventing food loss and help keep an even temperature.
WATER FOUNTAINS / ICE MACHINES / DISHWASHERS / CLOTHES WASHERS
1. Yearly inspection on all water operated machines. For water leaks, drains lines &
compressors.
2. Yearly, Drain hot water heaters. Prevention of hard water deposits on elements.
3. Inspect thermostats on hot water heaters, adjust to energy saving settings 120 degrees.
INSULATION
1. Inspect, add and or replace insulation in ceilings & walls.
2. Yearly inspection of window seals for heat & air loss, prevent loss by chalking.
3. Inspect doors for heat & air loss frames, thresh holes etc.
4. Replace older windows with single pane glass in Admin building with double pane
windows.
5. Admin Building closets, repair ceilings, add insulation, ceiling tiles.
ELECTRICAL/PLUMBING
1. Savings can be seen by completing minor electrical and plumbing fixes in house first. It is
understandable that licensed tradesmen will be required for larger projects.
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2. Adjust parking lot lights operated by timers weekly as needed. This will prevent lighting be
on during daylight hours.
VEHICLES/MILEAGE/FUEL
1. More car pooling.
2. Possibly keeping a van at each campus to keep individual mileage costs down.
3. Keep morning warm up of school fleet to a maximum of 15 minutes versus 1 hour.
PAPER and SUPPLIES
1. Allow double sided printing for student chapter power point notes.
2. Properly supplied first aid kits. Eliminate cold remedy, etc.
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