Stop Throwing Good Money After Bad

Your company took over management of a co-op that for years had thrown money at a very common problem: banging pipes and low water pressure. Can you tell us about it?For decades, the building had been using a house plumber to do everything from installing pressure relief valves, or PRV’s, to changing pipe directions, and he was in over his head. After years of throwing good money after bad, the board came to us and said: “This is not getting better. When we deal with the upper floors, the lower floors bang more, and the problem just gets worse and worse.”What did you do? It couldn’t have been easy to make the co-op switch after using this person for so long.We told the board very simply: a plumber’s a contractor. He can diagnose and make easy local fixes, but he’s guessing at the harder stuff. When you’re deal-ing with a historical and systematic problem, you have to bring in a mechanical engineer. The board was scared it would cost too much, and we had to explain the value added by bringing in a professional. What happened then?A mechanical engineer did an assess-ment and gave us two options: a cheap, easy temporary fix; or a long-term solu-tion that would also boost energy effi-ciency, require less maintenance, and restore the system’s overall health.What option did the board choose?Board members ended up going for the full project. They met with the engineers three or four times and put together a plan to present to the resi-dents. In this case, even though they had a decent-size reserve fund and a line of credit, they needed to impose a long-term assessment.How did they break the news to shareholders?They sent out an informational newslet-ter and held a meeting where people could meet the engineer and ask ques-tions. For the most part, the residents got it and could see the value added.What did the project entail?They undid the installation of all the PRV’s at the localized risers down-stairs as well as some of the rerouted plumbing, then returned the system back to what it was originally designed for. They replaced the steam traps on the radiators with orifice plates. They also put in valves that let you regulate the amount of pressure coming out as opposed to simply turning the heaters on and off. That decreased the bang-ing, and it cut gas consumption and fuel costs.Your advice to other boards?When something isn’t an easy fix, there’s usually a good reason why, and going for the cheap fix won’t resolve the problem. Engineers, architects and consultants exist for a reason. If you hire the proper professionals, it limits your risk. And that’s half the game in this business.