5 Reasons to Use Asset Management to Drive Your Community's Capital Plans

Capital planning is challenging, complex and financially critical. While operating budgets cover the yearly expenses of government operations, a capital plan focuses on the more expensive long-term, multi-year assets needed for the overall health of the locale. 

It reflects the wants, needs and expectations of your community, and it gives cities and towns time to prepare for large purchases and projects. If a project replaces an existing asset, it is, ideally, timed for the end of its useful life. However, many towns don’t have the data to know when an asset will reach the end of its life and either replace them too early or too late. So, how do you make the right choices? 

Asset Investment Planning is a powerful solution that gives governments an edge by planning for financial stability, reducing unexpected asset failures, and delivering the high level of service residents expect. In this blog, we’ll explore capital planning and five reasons why you should use an asset investment framework to inform yours.   

Managing your assets vs. Asset Management

Different from operating budgets, capital budgets deal with investments that operate across fiscal years, are too large for the operating budget, and emphasize items that can be depreciated over time.

The advantage of capital planning is that towns can look years ahead and plan for these large expenditures. With the proper data, repair vs. replacement decisions can be made, and new projects can be considered.  

If you’re thinking “wait, isn’t that just managing your assets?” the answer is, not exactly. While it’s one thing to just “manage your assets” over time, it’s another thing entirely to achieve true Asset Management.  

Governments that simply manage their assets are often stuck in reactive maintenance mode, requiring them to spend most of their time responding to complaints from stakeholders. A work order is generated due to an identified defect, a maintenance technician is sent to fix the problem, and the work order is closed. This is managing your assets.   

But this mode prevents governments from seeing the data that accumulates about a specific asset over time. Powerful software and information can bring the full picture of an asset – its age, health, status, etc. – to the budgeting conversation so that data can drive investment discussions and decision making. This is the beginning of true Asset Management, moving beyond reactionary maintenance and managing the full lifecycle of your assets.

5 reasons to let Asset Management drive your capital planning

When you have a great Asset Management & Maintenance system, it’s easier to make wise short-term and long-term financial decisions, keep things running smoothly, and work within a reasonable budget. It’s also a great way to communicate priorities to your internal stakeholders and your residents. Let’s dig into five elements you should consider when choosing how to build your capital plan.

1. Give yourself a crystal ball to better predict asset life

What if you could see into the future to predict when your major assets might fail? Now, with help, you can do that. This happens when you track all maintenance activity to the assets being maintained. Over time, you can see trends and understand asset conditions. Using all the data you collect during regular maintenance activity, combined with age and use, can give you a good idea of when it will fail or become too costly to maintain. This can be easy to do in your head or on paper with only a few assets, but when you have thousands of assets to manage, you need a complete solution that lets you centralize, collect, and analyze data so your assets can tell their full story.

2. Get the data you need to validate projects

Do your funding requests seem to always fall to the bottom of the list? Sometimes it’s hard to understand the importance of an asset until it is unusable. But if you wait too long, you risk major disruption in service. By using data, maintenance teams can better understand individual asset health and their chances of failure. They can understand the potential impact of repairing vs replacing an asset. For example, if a piece of playground equipment fails, a child could get hurt. If the stormwater drains back up, homes could flood. A good capital plan shows what investments are needed, why, when and their potential outcome. A good Asset Management system arms you with the data to fully explain the importance of your investment decisions.

3. Increase community support and buy-in

It is rare that a city or town has enough money to fill all the requests from stakeholders.  So, prioritization is very important. Most stakeholders come to the capital planning process with a point of view.

• Businesses may want investment in roads and parking lots
• Residents may want town amenities upgraded
• Parents may want updates to school buildings or parks
• Governments may want to renovate municipal buildings to accommodate technology, disability standards, or general usability

An Asset Management system built for government can provide the data to help stakeholders understand the impacts of each request. Often trade-offs will have to be made, but by validating investments with data, all stakeholders can understand the multiple points of view that went into decision-making, and it can make it easier for them to buy into investments that don’t directly impact them.

4. Compare various funding scenarios

Part of creating community buy-in is to explore various funding scenarios so stakeholders can see the trade-offs and aid in the prioritization process. Asset Management software can help governments demonstrate the impact of funding decisions. This powerful tool can quickly communicate the benefits and dangers of funding or not funding a project.

5. Identify opportunities for gains in sustainability and resiliency

When you have centralized data that gives you a good picture of the health of your assets, you can identify asset classes that are large energy consumers. Things like heating, lighting, and water distribution are some of the obvious areas. Replacing one asset with an energy saving unit may have little impact on a city’s overall energy budget, but if a class of assets has many units reaching the end of their useful life, it can make sense to create a capital project that replaces all those aging assets at once and get a larger reduction in energy costs. 

Cities and towns are also seeing climate related impacts on their assets. Asset Management can help identify areas where additional capital investment can help towns withstand and respond quicker to unexpected emergencies. Towns that are getting more rainfall than usual may want to consider upgrading their stormwater alert process to prevent unnecessary flooding. Towns seeing higher temperatures than expected may want to look for areas where they can plant shade trees. Putting these activities into different funding scenarios helps communities see the trade-offs that may be necessary to increase the resiliency of the entire town. 

The Brightly Advantage

Having a full Asset Management solution, built for government, is the best way to help inform the budget process. Brightly’s Asset Management for Government solution has all the features you need; a centralized asset registry, a workflow/scheduling system, embedded (or integrated) GIS capabilities, a powerful mobile app, visualizations of asset health across the entire city, and the ability to see the impact of different funding scenarios (levels of investment) on asset health across the entire jurisdiction.