Managing Governmental Real

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18 Νοε 2013 (πριν από 3 χρόνια και 6 μήνες)

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Evolving Approaches to
Managing Governmental Real
Property Assets

Olga Kaganova, CRE

The Urban Institute, Washington, DC

Okaganov@ui.urban.org


For
National Executive Forum on Public Property Sponsors’
Retreat 2003, November 6
-
8, Montreal, Canada



Olga Kaganova, Urban Institute

2

Contents


Background: The Urban Institute’s research, book,
technical assistance, sponsors, and contributors


Pre
-
reform issues and reform drivers, context, and
concepts


Some lessons learned from advanced reformers


(central governments)


Methodology for municipal governments


What remains unclear (“big issues”)



Olga Kaganova, Urban Institute

3

Sponsors of preceding research and
the book (a partial list)

The book is based on the results of projects
sponsored by:


The World Bank


The Inter
-
American Bank


The US Agency for International Development


Treasury Board of Canada, Secretariat


The Urban Institute


Individual researchers


With assistance from:


City of Saskatoon

Olga Kaganova, Urban Institute

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Book

Managing Governmental Property
Assets in the Time of Globalization:

Search for Transferable Experience






Central governments’ property (Australia, Canada, New
Zealand, France, and Singapore)



Municipal property (the USA, Switzerland, Eastern Europe
and NIS)



Special critical components (information, corporations, and
PPPs)



Lessons and “big issues”

Olga Kaganova, Urban Institute

5

Common Issues of Pre
-
reform Asset Management




Fragmented management




Multiple inefficiencies

(vacant and underused
properties, forgone financial gains, not “highest and best
use,” deferred maintenance and repair)



Lack of relevant information




Lack of transparency and accountability


Olga Kaganova, Urban Institute

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Reform Drivers and Context



“New public management (NPM)”


Recognition


in difficult fiscal and economic times
-

of
potential financial and economic gains associated with
governmental property holdings


Realization that real estate is a major component of
overall public wealth


Reform of accounting and financial reporting in the
governmental sector


Participation of real estate professionals in
governments

Olga Kaganova, Urban Institute

7

Conceptual Changes Underlying Reform




Government as “enabler” rather than
“provider” of urban real estate



1.
(i)

Direct privatization of large property portfolios

2.
(ii)


Separation of ownership and management, and

3.
(iii) Changing the role: “supplier” “partner”
“enabler”




Olga Kaganova, Urban Institute

8

Conceptual Changes Underlying Reform (cont’d)



Public real estate as productive asset

vs. as

public
good



Corporate

real

property

asset

management

as

a

prototype

for

governmental

asset

management


Olga Kaganova, Urban Institute

9

Some Lessons from Advanced Reformers

1.
What serves well as a trigger for reform?




A special high
-
level report focused on the area of property asset
management, which identifies serious problems and suggests
reform directions


A, C


2.
How do we overcome fragmentation and overlapping
of institutional responsibilities and authorities?




By targeted reform (especially an asset management reform)
-
by
-
design

-
A, C, F, NZ


Olga Kaganova, Urban Institute

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Some Lessons from Advanced Reformers (cont’d)

3. Which elements of regulatory framework seem to be
important?


a) Laws (only on a few key provisions)
-

A, C, F, NZ



b) Explicit strategic principles of property asset management
adopted by the government
-

A, C



c) Authority and incentives for portfolio decision
-
makers (such
line Ministers or Heads of program departments) to implement
these principles in practice (example: own vs. lease)
-

A, C, NZ



d) Effective safeguarding and controlling mechanisms (examples:
an independent third party for property valuation; financial audit)
-

A, C, NZ


Olga Kaganova, Urban Institute

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Some Lessons from Advanced Reformers (cont’d)

4. What are mainstream international trends in central
government’s asset management?


a)
Significant reduction of ownership portfolios / clearance of
central government balance sheets by: (1) divesting properties to
lower tiers of government, and (2) privatizing property
-

A, C, NZ


b)
Involvement of the private sector and professional associations in
developing a regulatory framework, standards, guidance, etc.


A,
NZ


c)
Use of private sector’s asset management approaches and
measurements (including market value, return on investment,
expense ratios)
-

A, NZ

Olga Kaganova, Urban Institute

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Some Lessons from Advanced Reformers (cont’d)

4. What are mainstream international trends in central
government’s asset management? (cont’d)


d) Use of enterprise
-
type entities (governmental corporations) as
holders and managers of some specialized portfolios
-

A, C, NZ


e)
Use of private property and private property
-
related services for
governmental needs (lease, PPPs, private management companies)
-

A, C, NZ


f)
Recognition and accounting for full costs of governmental
property ownership and use (all operating and management
expenses, opportunity cost of property ownership (capital charge),
property
-
related debt liabilities, and risks)
-

A, C (partially), NZ



Olga Kaganova, Urban Institute

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Some Lessons from Advanced Reformers (cont’d)

4
. What are mainstream international trends in central
government’s asset management? (cont’d)


g)
Link of strategic planning for property needs with financial
(capital and operating) planning
-
A, C, NZ, F (at an initial stage)


h)
Use of effective positive incentives and market
-
based performance
indicators for improving asset management
-

A, C, NZ


i)
Use of relevant reporting and controlling mechanisms
-

A, C, NZ



Olga Kaganova, Urban Institute

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Some Lessons from Advanced Reformers (cont’d)

5. Which institutional arrangements work well?


Varies


6. Which technical tools are used?

a)
Standardized contracts of various types
-

A, C, NZ


b)
Market
-
based property appraisal for both property transactions
and bookkeeping
-

A, C (for transactions only), NZ


c)
Financial and/or cost
-
benefit analysis of investment projects,
using private sector instruments (such as Net Present Value)
-

A,
C, NZ


Olga Kaganova, Urban Institute

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Some Lessons from Advanced Reformers (cont’d)

6. Which technical tools are used? (cont’d)


d)


Accrual accounting and associated forms of financial reporting
-

A, C (partly), NZ


e) Cost recovery instruments (rent from tenants at governmental
properties and a capital charge on holders of governmental
properties)
-

A, C (partly), NZ


f)
Performance and budget indicators, in particular based on private
sector’s benchmarks


A, NZ


g)
Financial incentives for agencies and individual managers


A, C,
NZ

Olga Kaganova, Urban Institute

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Some Lessons from Advanced Reformers (cont’d)

6. Which technical tools are used? (cont’d)


h)
Strategic asset and investment planning
-

A, C, NZ


i)
Rigorous reporting requirements, including financial reporting
within accrual accounting
-

A, C, NZ


j)
Regular internal and external audits
-

A, C, NZ







Olga Kaganova, Urban Institute

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Municipal Asset Management: Denver Model


Asset Use

Financial Goal

Example of Activity or
Property


Government



Social




Surplus

Maximize efficiency
and minimize costs


Quantify and minimize
the subsidy



Maximize financial
returns

City hall, fire or police stations,
sewage treatment plants


Housing, parks, economic
development



Commercial property, fee
parking lots, vacant land parcels


Source: Adapted from Utter (1989) and Simons (1993).

Olga Kaganova, Urban Institute

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“Big Issues” as Work in Progress




The relationship between accounting reform and
asset management reform




The degree of separation of ownership and
management

and proper governance for
managing entities




Information systems