Presentation to WCMA Region 3: Performance Measurement by WI Municipalities

Presentation to WCMA Region 3: Performance Measurement by WI Municipalities

Craig Maher Associate Professor UW-Oshkosh MPA ProgramDirector, Office for Governmental Studies

Recent Headlines from ICMA NewsRecent Headlines from ICMA News

• “Maricopa County, Arizona Seeks To Address $58 Million Shortfall”

• “Philadelphia Mayor Announces Layoffs, Unpaid Furloughs”

• “Local, State Governments Face Long-Term Fiscal Problems; Presents Management Challenges”

• “Washington county seeks to bridge budget gap with government shutdown”

• “Alameda County, California files suit against municipal-bond insurers”

• “Market downturn takes heavy toll on public pensions”

• State Budget Damage 'Just Beginning,' Rockefeller Institute Report Says

Also Found in ICMA NewsAlso Found in ICMA News

• In the Management column in Governing (Nov. 2008) magazine, Katherine Barrett and Richard Greene write that "in these economically challenging times, sophisticated managers see opportunity."

• “…bad times can lead governments to make cuts that inhibit the kind of analysis that leads to future savings," and "when the pressure is on to find savings through managerial change, the easiest thing to do is simply take action, and promise results," even if they are not likely to come to pass. Therefore, tough fiscal times "can be both a blessing and a curse for good management," Barrett and Greene conclude.

Wisconsin RankingsWisconsin Rankings

2006 US Bureau of Census

P.C. AmtRan

kUS Avg.

Direct general expend.

$ 7,093

19 $

7,087

Higher education $ 813 14 $

640 Elementary &

secondary $

1,680 18

$ 1,672

Public welfare $

1,296 15

$ 1,237

Highways $ 587 16 $

452

Police protection $ 258 17 $

264

Fire protection $ 100 23 $

114

Corrections $ 230 12 $

209

Parks and Recreation $ 112 24 $

116

Sewerage $ 147 12 $

131

Solid Waste Mgmt $ 64 25 $

76 Financial

Administration $ 91 42

$ 125

Counties are Generally Below 100,000 PopulationCounties are Generally Below 100,000 Population

0

100

200

300

400Thousands

Counties

Most Cities are WellBelow 50,000 PopulationMost Cities are WellBelow 50,000 Population

0

50

100

150

200Thousands

Cities

Villages are Typically Below 5,000 PopulationVillages are Typically Below 5,000 Population

0

5

10

15

20

25

30Thousands

Villages

Towns Tend to be Under 2,500 PopulationTowns Tend to be Under 2,500 Population

0

5

10

15

20

25Thousands

Towns

Local Revenue Contribution to Local Spending

Local Revenue Shareof Local Spending

Over 71% (10)67% - 71% (10)62% to 67% (9)57% to 62% (11)Under 57% (10)

Source: WI Kettl Commission

One of the areas where WI stands out is in the amount of intergovernmental aidOne of the areas where WI stands out is in the amount of intergovernmental aid

In SummaryIn Summary

• The nation is facing a serious economic challenge

• WI local governments are quite small (with a few exceptions); have limited resources

• WI local governments have limited revenue authority; not to mention levy limits

• WI invests less than most state/local governments in fiscal administration

• The fiscal picture necessitates effective decision-making/administration

The Role of The Common CouncilThe Role of The Common Council

• A common council serves as the legislative arm of the city government.

• It decides policy matters.

Source: LWM, Handbook for Wisconsin Municipal Officials

Does this budget format look familiar?

Are the questions posed really about policy?

Can one make effective policy decisions using this format?

Comments from last night…Comments from last night…

• “…outraged by fringe benefit and salary costs…”• “… given the economic conditions, you should

not be proud of a 2 percent levy increase, it should be going down…”

• “… you need to look at what you do and how you do it…government is never forced to look at it.”

• “… you need to look at what businesses are doing to cut costs.”

• “… look at zero-based budgeting… each department needs to justify what they do and how they do it.”

• “we just can’t afford it any more.”

The Form of Information Provision Affects Policy Outcomes

The Form of Information Provision Affects Policy Outcomes

• Elected officials needs information that enables them to base decisions on results/outcomes

• They need to use that evidence to help make resource and policy decisions.

Source: NLC and Urban Institute’s Legislating for Results Presentation

Performance-based Budgeting (PBB)Performance-based Budgeting (PBB)

• Performance-based budgets focus on “return on investment”—that is, what do we get for our investment of resources?

• Basic service level (or continuation of basic services)?

• Increased services (more services to same recipients or expansion of same services to more recipients)?

• Better (higher quality) services?• More efficient services (cost savings in service delivery)?

Is Budget Time the Only Time to Use Performance Measurement?

Is Budget Time the Only Time to Use Performance Measurement?

• Budget time most common• Both operating and capital

• Throughout the year; program review and/or program audit (GASB working on “recommendations’)

• Communicating with citizens• Communicating with the press

Source: NLC and Urban Institute’s Legislating for Results Presentation

Key Assumption in This ProcessKey Assumption in This Process

• Resources exist for data collection, analysis and training (of both staff and elected officials)

• A “leap of faith” in administration• Administration will effectively implement

policy• Unfortunately, many officials are elected

on a platform of “fixing” government

An Important Piece of the Puzzle; Getting Elected Officials to Buy-InAn Important Piece of the Puzzle; Getting Elected Officials to Buy-In

Getting elected officials interested in using results-based informationGetting elected officials interested in using results-based information

• Provide educational sessions on the value and uses of performance information for elected officials.

• Ask senior administrative staff to discuss how information on results can be used by staff to manage their operations and continually improve the outcomes of programs and services.

• Ask departments how they see elected officials using it.

How can elected officials be encouraged to address and use outcome information?

Source: NLC and Urban Institute’s Legislating for Results Presentation

Getting elected officials interested in using results-based informationGetting elected officials interested in using results-based information

How can elected officials be encouraged to address and use result information? (continued)

• Provide examples of how performance information has helped other cities/counties improve decision making, communicate with citizens, and help meet the goals of elected officials.

• Use materials from UW-O, UW-Extension LGC, the NLC, ICMA, and other sources.

Source: NLC and Urban Institute’s Legislating for Results Presentation

How Can I Help?How Can I Help?

• I’ve worked on this for at least a decade in several capacities• WTA, Benchmarking • Council Member, Chair of Finance Committee• NLC and Urban Institute• GASB (SEA Task Force)

• I’m a “healthy skeptic”• I’m convinced that external help is essential; seems to be most

effective model in other states• I’m not asking for funds (initially), just a commitment to the

project• I have received support from UW-O, WCMA, LWM, UW-Extension

Local Government Center• A good learning experience for my students• Pursuit of Grants (looking into Sloan Fdn. And IBM)

Recent Example:

Project Done by UW-Oshkosh MPA Students for Waunakee, WI

Recent Example:

Project Done by UW-Oshkosh MPA Students for Waunakee, WI

Why is this Important?Why is this Important?

• The current fiscal crisis is expected to worsen; the State of WI is facing a $3b. GF annual shortfall

• Most Federal grants now require outcome evaluations (performance measurement) in their applications

• Bond sales require indicators of financial condition which are well presented by performance data

• Local government revenue restrictions, current economic environment necessitate making effective use of resources imperative

• Promotes the logical tie between planning and budgeting

Resources AvailableResources Available

• National League of Cities• Urban Institute• ICMA

Craig Maher (maher@uwosh.edu)

&

Alan Probst (UW-Extension, Local Government Center)

(alan.probst@uwex.edu)