Perth Schools Cuts Costs with Fixed Priced HVAC Maintenance and Repair

With 1320 students and more than 20 buildings on an 8.8Ha site, Perth’s Lake Joondalup Baptist College is an a-typical private school meeting market expectations for the best facilities while balancing costs against income

3 Sep 2012

As a member of the local executive of the Association of School Business Administrators (ASBA), Lake Joondalup’s Chief Financial Officer, Stuart Holliday, is acutely aware that these challenges are common to the private school sector.

“The biggest challenge is the escalating cost of education, particularly wages, and the necessity to set fees that are reasonable for our clientele.

“While we maintain wage costs as best we can, we are governed predominantly by external forces. We can do little to influence them. Therefore it’s vital to contain other costs.

“With the College being just over 20 years old, we have to continue with a building program while maintaining what we’ve already established, still keeping enough funds for our core business of education. It’s a difficult balancing act,” Stuart said.

But Stuart is one of a growing band of managers who have contained a significant area of the school’s costs thanks to an innovative fixed price program for the maintenance and repair of the schools heating, ventilation and air conditioning systems (HVAC).

Under the contract with AE Smith, a contract that has been in place for more than five years, Stuart knows in advance what his costs will be for the year.

“They come in and service all units on a pre-determined schedule. It is in their interests to do it properly because if anything goes wrong it’s basically at their cost,” Stuart said. “They are literally underwriting the risk.”

Although the school tests the market every three years when the contract is due for renewal, to date there has been no reason to change.

“It’s not just about the price, but also about the relationships between their staff and ours and the service we get if something does go wrong,” Stuart said. “The service people that come out to the college are very good in terms of fitting in with the school. They’re mindful of the students; keep out of the way and basically fit in with the school environment very well. In fact one of the service people has been with us from day one.”

The strength of the relationship and the school’s trust in service levels was underscored when it came time for a major $200,000, two month retrofit of the HVAC in the school’s auditorium. The school went straight to
AE Smith as the preferred supplier rather than going to tender.

“We knew what we would get as a result of our experience with them. We’d previously had jobs done by AE Smith Project Manager Brian Webber and had a good relationship.

“In this case they carried out most of the work between 5pm and 8am as well as weekends. In terms of working around the client they’re fantastic.”

Stuart said that AE Smith’s preparedness to undertake the project as an open book contract meant that the school was confident of a professional job at the right price.

“Brian would show me their costs and we knew what we were paying up front. Even with extras he’d show me the cost with their 10% added and we always had the opportunity to go direct.”

A very powerful advantage of the contractual arrangement with AE Smith is the re-assurance that the national firm has the resources to keep the school up to date with any revisions to standards.

“Revisions in a school environment are always ongoing. Apart from legislative changes there are those driven by insurers and even societal expectations and here AE Smith is very good. When legislative changes come in they will always advise us and often pre-empt them.”

Stuart believes that quite apart from the money saved by the school with the help of AE Smith, there’s a very real advantage in terms of peace of mind.“

We have 20 significant buildings and a number of smaller rooms. The College is 21 years old and because it’s a comparatively new school we have had a lot of growth so there’s a lot of individual air conditioning units and not a lot of big group units. There’s a lot to look after and in the newer buildings they are quite comprehensive and complicated systems.

“Under our contract we simply do not have to worry and we have very few problems,” Stuart said.

Lake Joondalup Baptist College (LJBP) is a Christian, open entry Kindergarten to Year 12 coeducational College located in Perth’s beautiful northern suburbs. The College has an enrolment of 870 Secondary students and 450 Primary children. The College was established in 1990 as a ministry of the Lake Joondalup Baptist Church to provide a high standard of education within the context of the Christian faith.

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