By Hillel Glazer
Any facility manager who has handled their fair share of snow can likely calculate the specific costs of their property’s winter needs — for example, how many extra staffers they need to handle snow removal, which buildings need extra roof or pipe inspections, how much salt they need to cover the property per snowfall, how many snow blowers or snow plows they need on site, etc.
But there are several factors that can affect even the most steadfast snow removal plan and budget. These hidden expenses can arise depending on the severity of a given winter, whether or not you outsource any snow removal to contractors, unforeseen liability issues, and a myriad of other reasons.
Supply and Demand
The last few years have seen a pattern of high snowfall rates, which in turn has led to a high demand for supplies or contractors necessary to tackle large snow banks.
Perhaps this is most obvious when it comes to deicing salt. January 2015 saw prices for rock salt soar as back-to-back snowstorms made it impossible to keep up with demand to snow-stricken locations. Municipalities saw an increase in the per-ton price from $65 to over $100, while private companies were forced to shell out as much as $150 a ton.
It’s of course impossible to predict salt consumption since we don’t yet know how much snow will fall, but you can still prepare for this cost by negotiating salt contracts early. That way, you’re more likely to pay a fair price no matter how harsh the winter, and you won’t have to scramble should another shortage hit.
Snow Removal Contracts
One of the biggest financial traps for facilities in winter is a poorly negotiated snow removal contract that doesn’t account for hidden costs. For example, a simple winter property maintenance contract might only dictate that “X” inches of snow triggers snow removal. So what if you call them for fewer inches? Do you cap a price if the year presents a particularly heavy snowfall? What about ice or melt and refreeze follow up? Are code and ordinance requirements addressed?
If these questions aren’t answered, they can expose you to lawsuits by the contractor claiming a different price than what you negotiated. Last year in Portsmouth, NH, snow removal contractors sued a property owner for breach of contract, claiming they did not pay their total bill; the property owner countered that charges were made for unauthorized plowing, as well as for plowing and salting believed not to have occurred at all.
Avoid being targeted by contractors by negotiating the right terms for your snow removal plan ahead of time. You should also thoroughly document all of your contractor’s snow removal efforts, which can be critical in defending claims and obtaining any restitution you might be entitled to.
Optimal Insurance Coverage
Many of the winter costs that creep up unexpectedly result from inadequate insurance coverage. It’s therefore a good idea to upgrade commercial property insurance to cover any damage that winter is likely to bring. The following issues are not always covered in ordinary insurance policies but are very worth considering, so assess your plan before they become a problem:
- Frozen and/or burst pipes
- Winter run-off/ flooding damage
- Hail damage to roofs and parking lots
- Ice dams and leaks
- Roof collapse
But physical damage isn’t the only insurance issue to consider come winter. If you hire a contractor who is not insured, and someone makes a claim against you or that contractor, you may be held liable. However, insurance rates for snow removal have gone up 20% in recent years, making it hard for many contractors to find insurance, and causing a price increase for those that are insured.
Another insurance to consider investing in is business interruption insurance, especially if your area is prone to frequent closures from poor weather. This would cover lost revenue, utility expenses, and the cost of operating from a temporary location.
The other crucial insurance to consider covers one of the most common costs of winter that few ever see coming: slip-and-fall accidents on the property. Consider business liability insurance, as well as a few other key precautions.
First of all, go into winter prepared by knowing the laws in your state. There are three primary legal standards that can support facility managers against a slip and fall lawsuit, and all three can be proven if you properly document your facility’s snow removal efforts.
Second, make sure your property is truly and completely cleared of snow and ice. If your snow removal efforts aren’t sufficient, then paying fines to those who fall on your property could be your biggest winter cost. It might be worth investing a bit more up front in snow removal methods that will best protect your property and its pedestrians, so that you don’t pay more — in cash and credibility — down the road. Just ask the five corporations who’ve had to pay between $400,000 and $4 million to plaintiffs in slip-and-fall lawsuits.
Unless you live in the ever-shrinking part of the country where it simply doesn’t snow a lot, then your facility is likely on the brink of another costly winter. It’s important to consider any and every factor you might face when dealing with snow removal, and prepare your facility’s property and budget accordingly.
Glazer serves as the President and CEO of HeatTrak, a Georgia-based manufacturer of outdoor heated matting products. He is an expert in the field of snow and ice removal, and radiant snow melting in particular. He has been featured in The New York Times and The Wall Street Journal, as well a on Fox, NBC, and The Weather Channel. Glazer recently published a free eBook, The Complete Handbook for Commercial Snow Removal Solutions.