Do You Know What You Own?

A surprising number of states and localities don't have the kind of inventory of their assets that a decent shoe store has.
by | January 1, 2007

The list of concepts believed to be valuable to managing a government is pretty much endless. Some of them are complex, filled with acronyms and jargon that most people only pretend to grasp. Others are just common sense.

Consider the idea that a government should know what physical assets it owns or leases and manages. We're not talking about pencils here or acoustic ceiling tiles. We're talking about buildings and fire trucks.

This seems like a pretty obvious idea. No business would operate without such knowledge. Yet, a surprising number of states, cities and counties can't really produce the kind of asset information that a decent shoe store could, and certainly they don't manage those assets in a centralized fashion.

Why not? In many instances, buildings and other assets are under the direct control of agencies, leaving the central government in the dark. For years, Rhode Island was the poster child for this problematic syndrome. Just a few years ago, the state posted a notice on its Web site that it did not have a complete inventory of property under its control or a master plan for the use of state facilities or any coherent effort to ensure that property is fully utilized. The state was paying rent for space when state-owned properties were underutilized or vacant. Summing it up, the notice declared, "De-centralized facility management results in duplication of staff effort, little sharing of resources and an inability to put strategic solutions into place."

A concerted effort to centralize infrastructure in the state has been very successful. Rhode Island is going far beyond creating an inventory. This past year, all facilities employees were transferred from their respective departments to the department of administration. Facility management, says Brian Stern, executive director of the Department of Administration, "is now under one facility superstructure here, and we're starting to avoid some of the issues that we had."

Georgia is going through much the same process. When Governor Sonny Perdue established the Commission for a New Georgia, it revealed a real mess. Space management for the state was decentralized, with most agencies handling their own space management independently and reporting only to department heads. In addition, property maintenance and asset management were not being routinely done or strategically evaluated.

In May, under the commission's leadership, Georgia went live with a new database listing all 1,500 leases the state held. More recently, all the state buildings were entered into the database. Along the way there were some surprises. State Property Officer Gena Abraham, who headed up this process, had estimated that there were 11,000 buildings. Turns out that the actual number exceeded 19,000. That a well-crafted estimate could be off by more than 70 percent shows the magnitude of the problem.

Fortunately for Georgians, this isn't one of those databases that exist merely to justify spending lots of money on computer memory. Lonice Barrett, director of implementation for the commission explains that with the aid of the database, the state has renegotiated leases for a savings to the state of $10 million over the next 20 years. It's sold surplus property that was put back on the tax rolls. Savings: $21 million.

Other opportunities for change continue to appear. "Now we can ask why an agency is doing one thing with one property while another agency is doing something else with a similar property," Barrett says. "We found examples where an agency had two buildings in one office park and were paying different rates for the two offices."

Georgia went through a similar process with its fleet management. "We didn't know how many vehicles we had," Barrett tells us. "We didn't know who was driving them." Now they know. Some employees lost their state-owned cars and the state sold off surplus vehicles. This went beyond just cars. Georgia unloaded a fire truck, a hot tub, some computers and -- believe it or not -- an $840,000 Citation jet. The state is saving $2.7 million annually in operating costs and brought in nearly $9 million from the sale of assets.

Over the past few years, a number of states, cities and counties have had to make steep cuts to individual services to save no more money than Georgia brought in by selling tubs and airplanes. The potential benefits of centralizing information about assets such as these make us wonder why any government entity avoids this option.

Everybody remembers the famous words of Union Admiral David Farragut in the Civil War's Battle of Mobile Bay: "Damn the torpedoes. Full speed ahead." Farragut was hailed as a hero. But nobody much recalls that, at the end of the day, Mobile remained in Confederate hands.

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