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With municipal and school assets valued in the tens of millions of dollars in many communities, town and school officials are constantly looking for ways to realize the tremendous benefits that can result from managing their physical plant and fixed assets well. Thanks to the latest property operations management (POM) and asset tracking systems, municipalities and schools faced with improving their capital planning, asset tracking and preventative maintenance capabilities can now reduce operating expenses, increase accountability and better run their facilities.
In the long run, officials with fiduciary responsibilities can not only protect their assets but spend less money. This is especially critical as more local school districts invest huge sums putting computers in every classroom. Business managers want to keep track of this valuable inventory,including expensive hardware and software. It's no longer acceptable to maintain data manually. It must be readily available for city and town governments looking to control their physical assets, their maintenance costs and to preserve these large investments.
Effective asset management includes the following:
� Fixed asset inventory
� Asset condition assessments
� Capital improvement planning
� Preventative maintenance
� Cost accountability
Municipal and school officials throughout the Northeast's cities and towns are increasingly looking to asset management software solutions to improve their operations, increase the effectiveness of their budget processes and avoid costly "home-grown" software solutions.
From larger cities to small towns, municipalities face the ongoing challenge of issuing bonds for their municipal and school repairs and new construction. Karl Jacob, Director of Public Finance Ratings for the bond rating firm of Standard & Poor's, provides some perspective. "When we review a bond rating, we review the general economy, city finances, their management and the amount of debt outstanding," he said. "Then we blend those together and set the bond rating. If we have a clear understanding of a municipality's capital planning process, it's an advantage to the issuer. One of the things we rate, remember, is management. If they have an asset management tool, that's a plus. It could mean the difference between a lower rating and a better rating."
By using best practices and bench marking, the benefits of asset management software can help officials improve the stewardship of municipal assets. In addition, it addresses risk management including life, health and safety issues-which alone can significantly reduce a municipality's liability exposure.
Jared Clark, a Franklin, MA-based consultant to municipalities explained, "For about five years, cities and towns have improved the maintenance of public and municipal school buildings through the increasing use of professional facility managers. In a number of instances, they've even tried to develop their own software to track property, looking at it primarily from a fixed asset and financial perspective."
"They're substantially unaware that there's sophisticated asset management software available that provides an easy-to-use process of identifying and prioritizing work that needs to be done and the associated costs of doing the work," Clark continued. "By using an asset management system, municipalities can better forecast of their financial requirements and reduce or eliminate surprises from significant maintenance costs."
Some municipal and school officials initiate property operations and asset management pilot programs with a brand new building. They catalog all their assets and tie them in to preventative maintenance and work orders. Then they correlate the number of requests for services and the cycle for preventative maintenance to understand the amount and frequency of the maintenance they're doing. This brings discipline to their work order management process and better information for their budgeting requests.
Increasing numbers of municipal department heads, including superintendents, are now being required to provide city or town administrators with detailed fixed asset reports. The reason? Capital improvement planning committees are saying they won't consider funding requests from departments that haven't submitted fixed assets reports. A flexible property operations and asset management system can insure fast and accurate fixed asset information. This insures more effective budgeting and an improved capital improvement planning process.
"Municipalities are beginning to move beyond the use of computers primarily for financial reasons and use them for other mission-critical applications like asset management systems which help protect their investment in buildings and assets," noted consultant Clark.
"Preventative maintenance on major building systems like schools is always expensive," Clark added, "as in replacement of a new roof. Historically, many municipalities haven't looked at buildings as "systems". There are heating/ventilating/air conditioning (HVAC), window, roofing, and other systems in every facility. So, an adequate preventative maintenance process needs to look at the various building systems and replace or upgrade on a scheduled basis. In this way, they can avoid being confronted with the need for special town meetings and additional bond issues."
Asset management represents one of the last unexplored avenues for significant cost reduction. A solution for asset management will bring significant cost savings as well as efficient asset and risk management to municipal and school officials. It enables the establishment of benchmarks that produce best practices. It provides the knowledge that supports sound business decisions. Municipal and school officials can realize greater control over assets, reduce life, health and safety concerns, lower operating costs, eliminate crises, lower liability and improve bond ratings.
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