URBAN

WORLD BANKCORE URBAN COURSE

Toronto, Canada

CITY STRATEGY AND GOVERNANCE

DAY 2 - 4 MAY 1999

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DAY 2 - CITY STRATEGY AND GOVERNANCE

• The principles of governance and management; strategic planning and corporate management - Angela Griffin

• How a strategic plan was developed/implemented in Palmerston North City NZ - Michael Willis

• Preparing an economic and strategic vision for a city - Nigel Harris

• Stakeholder involvement in development/delivery of a strategic plan in Hamilton Wentworth Canada - Bill Pearce

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CITY STRATEGY AND GOVERNANCE• What we are attempting to achieve is ambitious and

demanding on you and us;

• The World Bank’s new Strategy for Urban and Local Government aims at helping cities become LIVABLE; BANKABLE; AND COMPETITIVE;

• To become so cities need to be WELL MANAGED AND GOVERNED and this course is designed to assist in building your capacity to be so;

• This first session addresses the principles behind the practical examples you will hear about in sessions 2 and 4.

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ASSUMPTIONS AND BIASES

• Inherent bias to experiences in New Zealand where since the mid 1980’s there has been major public sector reform at both central and local level;

• Some references to the UK and USA and other countries;

• Democratic processes in the local government systems you practice in;

• Well managed and well governed cities are clear about their role in the community and give confidence that they value the community’s assets and are proficient in handling the community’s affairs and taking account of needs.

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WHAT SHOULD BE THE ROLE OF A LOCAL GOVERNMENT AND WHO

SHOULD DETERMINE THAT?

• Central government?

• The local government?

• The community?

• In NZ in 1989 the reform enshrined in statute for the first time the purposes of local government - see next slides.

• The legislation also stipulated the code of conduct required of all local authorities based on the principles of accountability; transparency and contestability.

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PURPOSES OF LOCAL GOVERNMENT IN NZ

• To recognise the existence of different communities with different identities and values and to define and enforce appropriate rights within those communities;

• to enable communities to make choices between different kinds of local public facilities and services;

• to ensure the operation of trading undertakings on a completely neutral basis;

• to act as an agent on behalf of central government and ensure efficient and effective exercise of all functions and powers.

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ACCOMPANYING FACTORS

• Autonomy for local government in terms of ability to raise revenue - no subsidy from central government;

• Introduction of accrual accounting which measures the full cost of producing goods and services and keeps track of the value of community assets and liabilities;

• The requirement for annual plans and consultation with the public on those plans;

• Trading enterprises set up as arms length trading entities operating on a commercially neutral basis;

• The emphasis on purchase of goods and services to deliver benefits for the community with efficient management of resources.

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Break out session questions

• Which policies would have to be implemented in your city (or geographical area ) for it to be more livable ? more bankable? more competitive?

• If you had to choose between different kinds of local public facilities and services, which do you think are the essential ones for your city ?

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• Which would you prefer? :

– financial autonomy in terms of ability to raise revenue;or

– a well defined framework for intergovernmental transfers with financial dependence on the National Budget?

• Discuss the advantages and disadvantages of both

systems.

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• conduct business in an open and comprehensible manner;

• identify objectives for each activity and policy and resolve conflicts of objectives and interests in a proper manner;

• separate regulatory functions from other functions;

• measure performance and ensure interested parties are kept fully informed;

• ensure that management structures reflect and reinforce the separation of regulatory functions and resolve conflicting objectives.

PRINCIPLES ACCOUNTABILITY,TRANSPARENCY

AND CONTESTABILITY

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ACCOUNTABILITY

• Accountability hierarchy:

– Mayor and Councillors to the Public

– City Manager for clearly defined results to Mayor and Councillors

– Staff for clearly defined results to City Manager

• 10 year Strategic Plan and Financial Management Plan

• Annual Plan and Budget involving public consultation

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ACCOUNTABILITY

• Annual report on performance in delivering plan and standards of financial management

• Annual Audit by independent auditor

• Requirements to consult with the public on major decisions and to measure customer satisfaction

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TRANSPARENCY

• Separation of roles

– governance (policy making) from management (running the organisation and employing the staff)

– unfettered and non-subsidised publicly owned trading enterprises at arms length

– regulatory functions from non-regulatory

– enabler/funder from deliverer

• Performance based contracts with the community and staff based on delivery of outputs (products or services) and outcomes (effects on community)

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TRANSPARENCY

• Transparent subsidy arrangements which do not hide true costs

• Transparent trade-offs between competing policies and objectives

• “The right to know” - open government - a presumption of public access to information and open decision-making.

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CONTESTABILITY

• Adoption of commercial structure, such as business units, with responsibility for rates of return on use of community assets

• Competitive bidding for delivery of services and functions to assure the most efficient quality service

• Examination and presentation of options with implications for policy-making and decision-making

• Creation of choices for communities between different kinds of local facilities and services

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WHAT ARE THE ROLES PERFORMED IN A LOCAL GOVERNMENT?

• Strategy and policy making and monitoring of conduct of the affairs of the organisation

• Purchasing through the annual budget and plan services and products which achieve benefits for the community; and monitoring their quality

• Delivery of services or functions using public employees or private contractors

• Enforcement of regulations set by the local government as policy maker

• NOTE: The first two are governance functions ideally performed by elected officials and the last two are the management functions ideally performed by the paid staff.

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• Political objectives and goals clear

• Professionalises the management of the organisation - higher standards of performance

• Assures accountability at all levels

• Reduced risk of corruption and manipulation of the rules

THE BENEFITS OF SEPARATING GOVERNANCE AND MANAGEMENT

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• Objective policy advice with transparent trade-offs

• Politicians free to concentrate on policy and performance rather than administrative day to day affairs

• Community knows who is responsible for what - more access to information

• Less volatile changes in standards of service provision at times of change in political control

THE BENEFITS OF SEPARATING GOVERNANCE AND MANAGEMENT

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BENEFICIAL OUTCOMES

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Satisfaction with Council PerformanceINDEPENDENT SURVEY OF 767 WELLINGTON RESIDENTS. MEASURE = RESIDENTS WHO

RATED SERVICES AS VERY GOOD, GOOD, OR SATISFACTORY

BENEFICIAL OUTCOMES

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Break out session questions

• What kind of advantages can be gained from the separation of regulatory functions from other functions ?

• What kind of problems and advantages could arise in your local government if you had a system that required a 10 year Strategic plan and Financial management plan; Annual plan and report; and annual independent audit?

• If governance and management were separated, how would you organize your local government?.

• Which measures would have to be taken in your local government to allow citizens the right of access to all significant information?

• If in a competitive bidding for delivery of services the best bid is one from the private sector, how would this affect your personnel?

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• Local government is only one player in a city or urban area and if its role is clear it can fulfill that function more effectively: either as a vendor of services (traditional service delivery model) or as a promoter of beneficial community outcomes (the “civic leadership” model)

• To achieve positive outcomes for the community in the longer term, like livability and competitiveness, planning is essential

• The governance function of politicians now released from the pressures of day to day management shifts to the responsibility for policy and planning and achieving the longer term benefits for the community and city

SO WHAT IS THE CONNECTION TO STRATEGY?

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CITY STRATEGIC VISION OR COUNCIL STRATEGIC PLAN?

• Because local government is only one player, a strategic vision for the city can provide the framework for the activities of all other stakeholders such as the private sector, academia, central government, NGO’s, neighbourhoods and communities etc

• A vision can provide a direction and identify the communities’ priorities for action; it can be a basis for attracting investment and jobs;

• In contrast, the local government’s own strategic plan is complementary and sets out its own long term activities planned to help fulfill the strategic vision for the city

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STRATEGIC PLANNING PROCESS • Lead and facilitate the strategic visioning process

• Produce the community’s preferred strategic vision

• Seek commitment of stakeholders to develop their own plan for delivering on the vision goals

• Develop city local government strategic plan and cost it

• Convert the goals into action to be achieved each year

• Provide the annual budget and set the indicators by which the performance is to be measured

• Report back to the community the achievement of the goals and continue to lead the community vision

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HOW DO YOU DEVELOP A COMMUNITY STRATEGIC VISION?

• Key is to engage the public in the process and promote citizen responsibility; get each group of stakeholders to identify what they can do to solve problems and achieve vision for the future

• Provide the community with information relating to the physical, environmental, social, and economic environment the city is operating in and the likely future scenario (examples will be provided)

• Capture all the ideas and encourage the community to exercise judgement on options, risks and conflicts

• Cost the options for choices to be made

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PROBLEMS

• How do you ensure the process involves the spectrum of the community?

– In California surveys reveal that 15% are active in local affairs; a further 18% willing to be active - 33%

– provide planning and organisation

– provide resources

• How do you avoid capture by pressure groups at meetings? ie the 2% who are opposed and the 2% who are for

– Be creative - avoid reliance on meetings - parties,focus groups,schools,home gatherings,formal surveys,political schmoozing, neighbourhood programs

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PROBLEMS (CONT)

• How do you assure politicians that it is not supplanting their decision-making role on behalf of the community?– Make the distinction between vision and local government

strategic plan and the connections to the ultimate contributions to be made by the local government

– Visioning is a leadership role for the Mayor and elected politicians

• How do you put in reality checks?– Facilitate public judgement through asking questions like

“what else could we do?”; “What would happen if we chose that path?”; “What would the ideal solution enable people to do?”

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WHAT MAKES A GOOD LOCAL GOVERNMENT STRATEGIC PLAN?

• Right perspective - outside in - response to how your customers/community see things i e the city vision

• Strategic intent - long term, futuristic, visionary, compelling, understandable and memorable

• Strategic choices have been made - nothing is of equal importance

• Simple, not obscure or complex

• A critical path and costed sequence of actions

• Clear links to the organisation’s own processes for delivery

• Accountability and commitment - monitorable workplans

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SO DOES ANY OF THIS WORK?

• Practical examples from Palmerston North NZ and Hamilton Wentworth Canada later today

• Examples of strategic plans from Barcelona; St Petersburg;Brisbane and others

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North Shore council - Projected rate increases pre/post new strategy

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QUESTIONS FOR BREAKOUT SESSION

• If you were to pursue a strategic visioning exercise in your area– who would be your stakeholders;– what techniques would you use to obtain their

ownership of the process? – What would make it difficult to achieve this ownership

and involvement? – How would you overcome them?