Maintenance Replacement Charges

November 7, 2004
The following tables of cost are for various tasks frequently necessary in dwelling unit repair. It was prepared using current Department of Housing Labor rates, material costs and sampled commercial cost.

The items and rates used can be changed, utilizing our own wage rates, add-ons or different percentages in Column 9, when costs and rates change or if policies indicate a necessary revision. The resident charges can be easily modified from year to year by calculating percentage or actual increases of labor and materials.

It is intended that only Column 1 and 9 will be used in lists that will be circulated and posted for residents’ review and checking, and for the daily use of Work Order completion and the Maintenance Superintendent. The tables will be filed for ready reference, for cases where residents or others require justification or explanation of the rates and calculations. The calculation will be available to any resident upon request.

The calculations of two full costs (column 8 and 10) are made for, as an example, the replacing of a thermostat, as follows:

Column 1 - Thermostat
Column 2 - Task Time (hours) - 1/2
Column 3 - Current Labor Rate ($/hour) - $16.00
Column 4 - Labor Cost ($) - $ 8.00
Column 5 - Overhead (100% of Labor) ($) - $ 8.00
Column 6 - Material Cost ($) - $17.55
Column 7 - 20 Percent of Materials ($) - $ 3.51
Column 8 - Total Cost (4 + 5 + 6 + 7) - $37.06
Column 9 - Tenant Cost (4 + 6) - $25.55
Column 10 - Sampled Commercial Cost ($) - $74.12

Column 2 figures represent, using Department of Housing average experiences, time required to perform tasks, including removing broken thermostat and installing new thermostat. It does not include travel time to and from the job (this time is included in Column 5 Charge).

Column 3 represents the current mid-point range wage rate for a mechanic at the Department of Housing.

Column 4 represents Column 2 multiplied by Column 3.

Column 5 is 100 percent of Column 4. Overhead rates vary among Public Housing Authorities (PHA’s) but can be shown to range between 85% and 125%. The overhead, which any commercial firm would have to charge to stay in business, includes many items among which the major factors are:

1. Cost of unapplied time of vacations, sick leave, holidays, travel time to and from tasks, staff meetings, etc.
2. The costs of FICA other pension plan costs, unemployment taxes, etc.
3. Costs of tools, vehicles, stop costs, etc.
4. Prorate costs of Work Order preparation, materials, ordering, inventory, etc. and maintenance supervision.
5. Prorate costs of administration - Executive Director, accountants, personnel, etc.

Column 6 represents the current item cost either carried on the inventory cards, estimated for the inventory cards, or paid on specific purchase orders.

Column 7 is a 20% handling charge for materials that includes wastage and losses of materials from cutting losses or occasional breakage or damage.

Column 8 represents the total of Column 4 through 7.

Column 9 represents the standard charge to residents applying in this case the total of Columns 4 and 6.

Column 10 represents the current sampled, estimated or calculated commercial cost; at an additional 100% of Column 8.

In the particular sample, the recommended resident charge is $25.55 somewhat less than the “out-of-pocket” costs of $37.06.

Each PHA must make a policy decision of what factors or percentages they wish to apply.

To apply “full” or commercial costs to residents should be very burdensome to residents. Maintenance costs are subsidized as well as rent to assist the low-income family to live in standard housing.

Nevertheless, residents should be impressed with the heavy costs that a PHA must assume for the careless or even willful actions in regard to the dwelling unit property. Even though a PHA may elect to charge less than “full” costs, the residents must be made conscious of those costs and be prepared to pay a portion of “full” costs to the percentage selected in calculating Column 9 and 8.

Consistency is important in resident charges so that all are charged the same amount for identical tasks.

It can be argued that for the same item more or less time than the average time will be used; true the trouble of explaining the differing charges for the same tasks are very time consuming and tend to reduce the confidence that residents have in management.

Furthermore, the burdens impose on the maintenance department in calculating and preparing specific, individual charges is tremendous and detracts from more important work. If appreciable more unit time, and therefore more labor cost, is charged than average time, too much argument time will be consumed. Who is to say that the maintenance mechanic was efficient or possibly grossly inefficient if there are large deviations from the averages in task time?

In making the decision, the benefit of the potentially greater charge was weighed carefully against the added administrative burden of tracking the number of charges for each resident.

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