Capital Management Practices in U. S. Counties

Abstract

Management of capital assets is crucial to maximizing government resources. This study analyzes capital management systems in 40 large U. S. counties, based on results from the Government Performance Project. Quantitative scores are developed to compare the counties with each other and with recommended practices in three areas: capital planning, project management, and asset (or preventive) maintenance. Counties score highest in project management, and lowest in asset maintenance. Long-term planning is common. Innovative practices in specific counties are also discussed.

Local Government Capital Spending During and After Recessions: A Cause for Concern?

“…Examples of ways in which local governments have contracted out or shared responsibility with other local governments are projects such as wastewater treatment plants, street maintenance, regional sewer treatment facilities, rehabilitation of public housing units, and prison and juvenile detention facility construction. 22 These strategies are more likely to succeed when local governments engage in strategic planning and integrate these relationships into a long-term plan (Beckett-Camarata, 2003;Ebdon, 2004;McGowan & Wittmer, 1998). On a positive note, there is evidence that strategic planning is being used by at least large counties, with almost 80% of those surveyed reporting such use (Ebdon, 2004).…”

“…22 These strategies are more likely to succeed when local governments engage in strategic planning and integrate these relationships into a long-term plan (Beckett-Camarata, 2003;Ebdon, 2004;McGowan & Wittmer, 1998). On a positive note, there is evidence that strategic planning is being used by at least large counties, with almost 80% of those surveyed reporting such use (Ebdon, 2004).…”

“…(Berne & Stiefel, 1993, p. 682) Scholarship has shown that short-term public finance decisions affect fiscal sustainability and can have long-term negative effects (Chapman, 2009;Ebdon, 2004;Scorsone & Plerhoples, 2010), but the studies do not adequately examine why or how. This is common in the literature: there is an acknowledgment that these short-term cuts may impact longterm goals, but there is no analysis (Pandey, 2010;Thompson & Gates, 2007).…”

“…Is this true, though? Short-term public finance decisions can affect fiscal sustainability and can have long-term negative effects (Chapman, 2009;Ebdon, 2004). Understanding the long-term effects created by capital reductions is important because local governments are responsible for such a large Correspondence should be addressed to Whitney B. Afonso, School of Government, The University of North Carolina at Chapel Hill, KnappSanders Building, Campus Box 3330, Chapel Hill, North Carolina 27599, USA.…”

“…The neoclassicist tradition includes, among others, theories based on public choice and new institutional economics.20 Beyond just economic development and consequences of structural distress, the management of capital has been found to have a positive relationship with bond ratings as well(Ebdon, 2004).21 Simonsen, Robbins, and Kittredge (2001) point to three strategies regarding debt that practitioners suggest. First, long-term debt should be used only to finance capital projects.…”