Monday, July 12, 2010

How we really need to see the budget...

What if your next tax bill said:

Cost of Police Street Patrol per patrol: $300, your share $.38
Cost of Locally Run Dispatch per call: $82, your share $.07
Cost of Sideyard Garbage Pickup per pickup: $1, your share $1.00

And then if it went a little further? Say, told you

24 Patrols per day
8 Dispatch Calls per day
2 Pickups per week.

At this point, you would have an idea of what the city services are really providing, what it costs for you as a taxpayer, and a rational basis to decide what's worth it and what's not.

And it puts the taxpayer squarely in focus showing services consumed.

It's not a bad way to decide how your money should be spent, and in fact is the same way that many businesses measure their costs.

There is a popular sentiment that government should run it like a business. I admit I find this viewpoint simplistic in the sense that for profit businesses and governments have very different purposes.

Businesses exist to profitably provide a product or service to a voluntary market. Governments exist to build and maintain a social framework.

Businesses can choose to stop operating. Governments can't, well not usually.

Businesses can decide to not serve certain market segments. Governments can't.

Businesses can change their product line and services, and can pick up and move to friendlier or more profitable locales.
Governments... well you get the picture.

But that is not to say that practices and disciplines, particularly in terms of planning, investment, management and financial stewardship, are so very different and usually that's what people mean when they say government should be run more like a business. I can't argue with that.

There has been a lot of work done on Outcome Based Costing as a primary budget tool and there's a great short explanation of the subject at the American City and County Website. Particularly in hard times, we have to look at the cost and effectiveness of the city services provided.

The interim city manager, Bob Pushkin, has created a traditional, relatively easy to understand group of alternate budget scenarios. These don't go far enough. Using the police department, you can see what the total costs are projected to be, but that doesn't show what the cost per service is, or what the services provided are.

How much does it cost to have local dispatch per call and what is their utilization rate? For our money, how many patrols of the streets does this buy? How many public safety incidents are responded to and how much does it costs? Where are the community policing programs? All of these are valid questions, not just for the police but for each service the city provides. Our city commission will be deciding our budget with no objective measures of how this will impact the citizens.

Aren't the real questions we want answered things like:

1.) Will our police be able to patrol the streets?
2.) What will our sanitation look like?
3.) Can our city administration meet its obligations to citizens?
4.) Can our streets be maintained?

We need to know what services we are getting and at what price.

Now it's hard to change the philosophy of municipal budgeting. But some places have done it, including Broward County. It's a lot of work, not hard complex work, but it requires looking in depth at what the city offers, being willing to set aside partisan concerns and departmental sub-optimization to create a clear and useful view of the services provided and the money consumed. We can do it.

Kevin Vericker
July 11, 2010

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