Municipal portfolio stewardship with limited budgets: the application of matrix correlations as a tool to support resource allocation decisions in the public good

摘要

Portfolio managers are often challenged with difficult decisions in balancing the distribution of limited resources, particularly across groups of buildings of varying attributes, such as age, size, function, and states of physical condition and functional obsolescence. These complex decisions require insight into the correlations (or relationships) between a multitude of physical and financial attributes. Budget constraints compel the managers to prioritize the resource allocations, which requires the development of a compelling business case to support the skewed distribution of the funds to certain facilities and critical assets during particular fiscal years. This paper presents a methodology that draws upon a matrix correlation tool that has been used to help municipalities establish a defensible resource distribution amongst civic departments, motivated by the public good rather than profit incentive. While the weightings for the variables will differ based upon the owners' objectives (either in the public sector or private sector), the principles of matrix correlations apply to all real estate sectors, including municipal, commercial, industrial and institutional.