Sam Hall is a California public partnership leader at Schneider Electric. He can be reached at 562-458-8729 or sam.hall@se.com.

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Across California, rising costs and increasing economic uncertainty are placing new pressures on municipal budgets. To address these challenges, city leaders are exploring ways to leverage their facilities to build long-term financial resilience and stability. These targeted investments can reduce risk, support economic growth, and unlock savings that can be reinvested into local communities. 

Reducing risk and managing costs 

Many cities are managing facilities that needed significant upgrades even before cautious post-pandemic spending created a backlog of infrastructure needs. Unfortunately, this approach often leads to reactive maintenance, leaving cities vulnerable to costly emergencies and unplanned disruptions. Over time, these unpredictable expenses strain city budgets and drive up operational costs. 

Cities that take a proactive approach to managing their facilities and energy systems are better positioned to protect their budgets from volatility. A well-designed facility master plan integrates short-term solutions to boost efficiency while laying the groundwork for future improvements that reduce costs and operational risks over time. 

Investments in facilities designed to withstand extreme weather are especially valuable for California cities. With the state facing more frequent wildfires, heat waves, and droughts, weatherizing existing buildings ensures critical public infrastructure and services can operate reliably and recover quickly during emergencies. Research from the Boston Consulting Group shows that every dollar spent today on adaptation and resilience can yield economic returns worth 5 to 50 times the amount invested — and sometimes much more — by reducing recovery costs and lowering operational expenses. 

Case study: Palmdale

The city of Palmdale partnered with Schneider Electric to modernize outdated infrastructure and improve community facilities. With mechanical systems over 15 years old and a building automation system reliant on outdated parts, key facilities faced potential heating and cooling failures. The city’s automated irrigation system also required updates to maintain efficient water management.

The project brings substantial benefits to Palmdale residents: upgraded HVAC systems for better indoor air quality, enhanced safety with exterior LED lighting, and reduced water consumption from modernized irrigation. This initiative ensures Palmdale’s facilities are more efficient, sustainable, and ready to serve the community for years to come.

Key considerations 

To maximize the impact of facility modernization, city leaders should take a strategic approach. Identify and prioritize infrastructure projects that address immediate community needs while setting the stage for long-term benefits. This could include revitalizing downtown areas, upgrading athletic facilities, or creating technology hubs that foster innovation. 

While upfront costs can be a barrier, innovative financing models like energy savings performance contracts (ESPCs) can help overcome this challenge. These contracts allow projects to pay for themselves over time through energy savings. Additionally, cities can combine operational savings with grant funding to fully fund initiatives without increasing taxes or fees. 

The path forward is clear. While competing priorities may make it tempting to delay modernization projects, taking a proactive approach to infrastructure improvements can create immediate and long-term benefits — especially if city leaders invest in capital recovery and reinvestment programs that unlock new revenue streams. By investing in California’s facilities today, local leaders can build stronger, more resilient communities for tomorrow.

Schneider Electric has been rated the #1 energy services company by Guidehouse Insights since 2017. We act, think, and live locally in California while providing world-class services as a global Fortune 500 company. Over the past 33 years, Schneider Electric has successfully implemented over 1,000 ESPC projects across the nation, saving our clients more than $4 billion. For more information on how Schneider Electric helps public entities tackle their top priorities with energy efficiency, please visit perspectives.se.com/page/public-sector.