Issues related to capital resources

Capital resources are the physical infrastructures and investments that underpin all activities within a municipality. A given community could have the most modern childcare center in the state, but if the municipality can’t provide power and water to it, then it has no value. Another municipality may have many jobs available at a new plant in the outskirts of town, but those jobs will not be filled by municipal residents if there are no trains or buses to get prospective workers from the city center to the new facility. Exceptional healthcare and childcare services may make a municipality an attractive destination for ambitious immigrants (citizens

and aliens alike), but if housing stock is insufficient or inadequate, then those potential employees will choose to go elsewhere instead.

Capital resources post unique challenges for municipal managers because they may be owned either by the municipality, by residents of the municipality, or by private or public third parties. Municipal managers have a direct ability to influence and guide the use of property they own outright, while they must depend on zoning laws and building codes to influence the construction, use and maintenance of capital assets owned by others. There is a delicate balancing act to be achieved here, as the advantages of municipally-owned capital assets (outright control of their use, direct ability to ensure upkeep, etc.) may be outweighed by the disadvantages (properties removed from the tax rolls, municipality directly responsible for potential environmental or safety issues, etc.) There are also certain capital assets that require degrees of expertise and overhead costs that make them more suitably owned and operated by commercial interests who can allocated fixed costs over national or international bases unavailable to local municipalities (power utilities, etc.) Municipal managers must ensure that their capital assets are used in a way that meets the needs of their residents, which oftentimes will require them to be savvy and effective negotiators with organizations that may view their municipality as a very small, insignificant player in their international business aspirations.

There are three broad sub-topics to consider within the Capital Resources category: housing, mass transit and utilities. Each of them will be briefly addressed below.

Housing:The majority of housing stock in any municipality is likely to be privately owned, either in the form of single family homes, or landlord-owned rental properties. Generally, the only housing likely to be owned by the municipality itself will be low-income or transitional housing, for residents without the means to meet rental or mortgage payments. In some cases, municipalities may outsource this segment of the housing market, contracting directly with landlords to provide subsidized housing. Housing is a tremendously important element in assessing the quality of living in any community, as residents’ homes provide the basic framework and location from where all other aspects of their lives emanate. Municipal managers must work to ensure that the quantity of housing stock correlates to the demand for it; blighted neighborhoods with abandoned houses or over-crowded, over-developed suburbs are equal indicators of poor management of housing stock. Building codes and zoning laws must also be deftly used to ensure that the quality of housing stock is high, and that acceptable levels of maintenance and safety are provided by private owners and landlords alike. Housing stock also impacts the revenues of most municipalities through property taxes, and municipal managers have a responsibility to ensure fair and equitable enforcement of assessment and taxation provisions within their municipalities.

Mass transit:The need for and reach of mass transit in a municipality is obviously directly related to its size and layout. Small, densely-compacted communities may have limited need for mass transit services. Large, decentralized municipalities, however, must view mass transit as a circulatory system ensuring its very lifeblood—the people living there—have the ability to move efficiently between home, school, shopping and work. Mass transit is a crucial resource for people without the means to afford their own vehicles, and also can play a significant role in the quality of life of a municipality by reducing congestion and pollution, especially in densely-populated urban centers. Municipal managers must ensure that they provide mass transit services that effectively meet the needs of their communities, working with transit authorities, other subsidized operators, or their own private fleets to craft routes that maximize the likelihood and frequency of use. Mass transit systems may have high maintenance costs, so municipalities must find a proper balance between costs to riders and costs to service their capital assets, as well as sources of funding to cover the likely shortfall between those two totals.

The system must be well-marketed, accessible and safe, ensuring that residents of all ages and abilities understand where and how to use it, and feel empowered to do so. Service must also be dependable, with robust backup systems in place, since the jeopardy to passengers who depend solely on mass transit to get to and from work, or to and from their children, is extremely high.

Utilities:The era of air conditioning, entertainment centers and home and office computing has created energy demands that far exceed the expectations of grid designers of the pre-electronic world. Many municipalities function with antiquated electric, water, steam and sanitary systems that are nearing, or have passed, their optimal life expectancies. Municipal managers must work with a large, decentralized body of potential providers in the utilities arena, many of which will not be particularly interested in nor supportive of the managers’ goals and aspirations for their municipalities. They must ensure they negotiate fair deals for their residents, to ensure that their utility infrastructure will meet their needs at rates that aren’t unduly burdensome above and beyond the levels that our reliance on imported oil has already inflicted upon them. If a municipality owns its own utilities (most likely in the cases of sanitary or water plants), then it is incumbent that those systems receive routine maintenance and care to preclude catastrophic failure with widespread impact upon the residents’ quality of life. There are significant healthcare issues associated with utilities as well, as tainted water supplies or polluting power plants can cause major burdens on the healthcare system.

In summary of the capital resource section, municipal managers must work with their assets and with those owned by others to ensure that the physical infrastructure of their municipalities are strong. They must make wise decisions about when to acquire capital assets, when and how to maintain them, and when to sell or scrap them. Their capital assets must be adequate to meet the needs of the community, neither too large nor too small a portion of civic expenditures. Third party and private capital suppliers should meet the same expectations of quality that the municipality sets for its own assets, as the municipal manager still owns the responsibility and liability if it contracts out for shoddy products that harm or fail to serve its residents.