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Best Methods to Budget Snow Removal
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Minnesota Community Living January/February 2011

Best Methods to Budget Snow Removal

By Steve Hoogenakker, Concierge Landscape Environments

The vast majority of community association leaders think of only one or two ways to specify snow removal services. This article talks about the good and bad of some interesting methods!

There are innovative ways to budget your snow removal that most community association leaders are unaware of. They are (in order of wildest swings in meeting budget to most conservative): They are listed in order of wildest swings in meeting budget to most conservative. These methods will have the BIGGEST impact on whether you beat or blow your budget this year.

a. Snow billing by the hour. This is the riskiest plan in order of maintaining your budget. Good contractors billing by the hour are fine, but if you don’t know them, it’s also the easiest for a bad contractor to overbill you and your clients (tenants). Also something that many property managers fail to include in their strategy is to know if their snow contractor is using all or mostly subcontractors. Now you have two entities that could overbill. Unless the general is out there every night, it’s nearly impossible to verify each subs hours. If they can’t verify it, you’ll probably pay extra. This isn’t all bad though; if we have very light snowfall this winter, you can save considerably over other methods.

b. Snow billing by the push. This is the newest method of determining pricing. Let’s say you have a retail site and you have a 1” trigger. You need constant service to keep drive lanes open and ice free. Once the site gets to an inch, the contractor will start snow removal operations, even if snow is continuing to fall. When they’re done, if there’s another inch or two on the ground, they’ll go through the entire process again.

You have one price per push, which is much less than a per "event” and gives you some control 

c. Snow billing by the event. You’re probably familiar with billing "Per Time.” Usually this is broken out at 2-4 inches, then a higher price for 4-6 inches, etc. The plowing usually includes a breakout at 4” where the contractor will clear the drivelanes, then come back hours later and finish the entire job. Then you get charged once per snow event.

d. Snow billing by the inch. This is another new method of budgeting for snow. You receive a bid for $200 per inch of snow. The snow can be measured on site over the season, or if you’d like numbers with no argument, go with the snow totals at the Chanhassen Weather Service. At the end of the season, if we’ve had 48 inches, then you would have been billed $9,600.

e. Seaasonal billing. When you absolutely need to be on budget, a seasonal bill consisting of five equal monthly payments will keep you there. What are the downsides? If we have a winter with light snow, youi’ll end up paying more than you could’ve by taking a chance on any of the above methods.

This is the favorite method of townhome associations. I think it’s because no board wants to get beat up by being way over budget. At least when the price is decided in September, the residents know what to expect. 

Let’s touch on subcontractors again. One of the real life problems with using subcontractors is that many times they sign up for a site with the "general contractor,” but have three to five of their own sites that they have a personal stake in and that almost always pay better. So, are you going to get service when you expect it? Good question, but many community associations are now adding "no subcontractors” to the bidding process.

This is the preferred method of the largest snow removal operations. They can use up to 95 percent subcontractors, and may offer a lower price. Their success is determined by how well they can find and retain great subcontractors who can’t sell their own work.

Check on references of course, and spend a little time getting to know your bidders in person. They’ll be the ones you count on to keep your neighbors happy and your phones quiet for five months, and that’s darn important.

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