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Operating Budget

Sometimes called an "Operations Budget". 

The portion of a building’s budget that is allocated for operating costs, which are frequently recurring expenses that arise during the course of a single fiscal year

The budget is comprised of separate line items corresponding to each of the operating costs.

The operating budget is a key reference document for various kinds of studies.

  • A.  Budget Components
  • B.  Budget Analysis
  • C.  Budgeting Process
  • D   Budget Management Principles

A. Budget Components

The following table includes a summary of some of the typical components of an operating budget.
CategoryIDDescriptionAmount
Utilities (Fuel)
1Electricity
2Gas
3Water
4Other
Admin-
istration
1Insurance
2Banking costs
3Staffing 1
4Staffing
5Other
Professional services1Legal fees
2Consulting fees
3Accounting fees
4Other
Maintenance1Planned maintenance
2Corrective maintenance
3Repairs
4Other
Financial1Replacement reserve
2
3Other



C. Budget Analysis

The distribution of operating costs in a typical residential building:

CategoryIDDescriptionRatios
Utilities (Fuel)
1Electricity20%
2Gas
3Water
4Other
Admin-
istration
1Insurance20%
2Banking costs
3Labour/Staffing 1
4Labour/Staffing
5Other
Professional services1Legal fees
2Consulting fees
3Accounting fees
4Other
Maintenance1Planned maintenance20%
2Corrective maintenance
3Repairs10%
4Other
Financial1Replacement reserve
5%
2
3Other



D.  Budgeting Process and Management
  • The full range of operating costs are summarized in an operating budget.
  • The budget corresponds to one fiscal year.
  • The budget is updated according to a budget cycle.
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Fig. Comparison of budget line items in operating budgets.



Sample operating budget distribution for an average high-rise building  Sample operating budget distribution for an average low-rise building. Sample operating budget distribution for an average townhouse complex
Fig. Comparison of the annual operating budget distributions for an average high-rise building (left), low-rise building (middle) and townhouse complex (right).


I. Care is trying to ensure that inflows match outflows, but this requires cooperation and teamwork
Fig. I. Care is trying to ensure that inflows match outflows, but this requires agreement on long-range stewardship, cooperation and teamwork.


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Fig. Excerpt from a cash flow table.


Chessboard analogy to illustrate budget constraints as one of the operational challenges
Fig. Chessboard analogy to illustrate budgets constraints as one of the operational challenges in asset management.


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