Launch Slideshow

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Putting it All Together

Putting it All Together

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    Compared to 2007, will your capital-improvement budget increase, decrease, or stay the same?

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    Compared to 2006, will your capital-improvement budget increase, decrease, or stay the same?

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    Which of the following represents your department's greatest challenge in 2008?

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    Why

Though it wreaked havoc on the housing market and could lead to a recession, the subprime credit crisis has had at least one benefit: It fueled investment in infrastructure.

Through November, according to international financial-information provider Thomson Financial, state and local governments had issued $406 billion in bonds, a 13% increase over 2006 and an all-time record high. While some of that largesse was earmarked for prisons, schools, and other public buildings, some of it financed major upgrades or new infrastructure.

Coming into 2008, all signs pointed to this trend continuing, albeit more slowly. The construction-management consulting firm FMI Corp., for example, expects nonresidential construction to increase 5% this year and 4% in 2009.

Our annual survey of public works budget expectations mirrors these expectations: Respondents plan to maintain 2007's level of investment in capital improvements. Assuming continuing financial turmoil doesn't raise interest rates on municipal bonds, making it more difficult for cities and counties to raise funds, that means more new or improved sewage and drinking water plants and roads. But it doesn't translate to an increase where it really counts: caring for those assets from day to day.


And that's where the surprise lies: More respondents are receiving more money for maintenance than they did in 2007, with one-third reporting budget increases of 3% to 5%. While it's not the $1.7 billion the American Society of Civil Engineers says is required to bring the nation's infrastructure up to grade, communities are allocating more resources to their single largest investment.

The increase may be due to catastrophic failures like last year's steam pipe explosion in New York City, which killed one person, and the bridge collapse in Minneapolis, which claimed 13 lives. Such tragedies make infrastructure, at least temporarily, as important a funding priority as schools, fire, and police. Or it may be attributed to the need to collect asset information for federal GASB-34 financial-reporting requirements.

Or could it be that the ability to show the true cost of doing business is finally paying off for the departments that have implemented asset-management systems?

Though we didn't specifically ask, we were struck by the number of respondents who plan to deploy such software.

“2008 will be the implementation year of new technological systems for asset management and work management systems,” Ed Kovacs, PE, transportation and public works commission for Cambridge, Ontario, one of Canada's fastest growing cities, wrote. “Integrating the two systems will open up avenues for improved efficiencies and enhanced levels of service.”

“I'll be implementing an automated work management plan, thus increasing accountability and productivity,” wrote Andrew Bullington, public works director for Stanwood, Wash., whose service area included the island of Camano.

Andre Williams, an engineer in the permits division of Richmond, Va., looks forward to the citywide implementation of software to track requests, complaints, responses, and workload. “Hopefully, this will show lack of resources,” he wrote.