IMPROVING EFFICIENCY

AND

CONFIDENCE
IN

LOCAL GOVERNMENT

BY WAY OF A

GOVERNMENT SERVICES STUDY COMMITTEE

Thomas R. Creamer, Selectman Town of Sturbridge 21 June 2012 1

Introduction Section 4-2, paragraph c, Powers and Duties in General of the Sturbridge Town Charter states that The executive powers of the town shall be vested in the Board of Selectmen, and may be exercised by them jointly or through the town agencies and offices under their general supervision and control. The Board of Selectmen shall cause the laws and orders for the government of the town to be enforced, and shall cause a record of all their official acts to be kept.... As the Executive Branch exercising its powers jointly or through the town agencies and offices under its general supervision and control, the Board of Selectmen have an inherent obligation to ensure that the taxpayers of the Town of Sturbridge are provided with the best services in the most efficient, productive, and professional manner possible. To that end, the Board of Selectmen has a responsibility to ensure a top-down structure of policy development and implementation that provides our various departments and employees with the support, resources (both human and technological), professional development, management, and environment (i.e. working conditions) that contribute to the highest level of professional service and productivity in the most cost-effective manner. To ensure a level of government efficiency that recognizes and achieves the highest return on investment to our taxpayers, we must be sure our fundamental approach recognizes that the business of government is accountable to its stockholders (i.e. taxpayers). As such, it must manage, invest, and spend funds collected from same in a manner respectful to, and reflective of, the expectations and sacrifices of those who shoulder our communitys tax-burden. Specific to that point, a comprehensive study titled Defining and measuring productivity in the public sector, outlines three core rationales supporting the position that public sector productivity is crucial to the role of government: 1) the public sector is a major employer, 2) the public sector is a major provider of services in the economy, which in turn impact the financial flexibility of residents and the cost of doing business within our community, and 3) the public sector is a consumer of tax resources. As such, changes in public sector productivity may have significant implications for the economic stability and vitality of a community. In recognition of such, a 2007 wide-ranging government productivity analysis conducted on behalf of the State of New York identified that Research and local initiatives have shown that for many functions, local services can be provided more efficiently or effectively on a broader scale. Cynicism Surely, during times of economic uncertainty there is greater focus on, and skepticism of government productivity and efficiency. As residents working in the private sector experience wage freezes or cuts, benefit reductions, increased contributions to health care, underemployment and/or unemployment, coupled with the increasing cost of government each 2

year, there arises a greater awareness of, and/or connection to an often echoed belief unfounded or otherwise - that government is filled with fat at the expense of struggling taxpayers. Undoubtedly, recent excesses highlighted at the federal level within the General Services Administration (GSA) and those at the State level such as the Big Dig, which has been called Americas greatest highway robbery do little to dispel any assertions to the contrary that government is inefficient. Though clearly these excesses are well beyond the scope of any irregularities one might witness at the local level were such even to exist, there is always skepticism in terms of local governments efficiency and effectiveness in managing taxpayer funds. Such a position is clearly supported by grass roots organizations emerging across the country such as the Government Efficiency Movement (GEM), which strives to identify and implement new approaches to municipal cost-cutting by rethinking the nature of local government structures. Corroborating this lack of faith as it relates to local governments management of taxpayer funds has been glaringly evident this past year in Sturbridge, as witnessed by the effort to repeal the Community Preservation Act, the Citizen Petition to level-fund the fiscal year 2013 budget, followed by line-item challenges to the overall budget and our Town Meeting Warrant. Rather than review these citizen challenges with any level of cynicism, we should welcome the fact that they exist and embrace the idea of responding to them with a measurable means of quantifying the services we offer as a community. It is only through such an approach that we can truly understand our net worth as a governing entity and improve upon the business of governing. Not only however, are we challenged with a growing level of cynicism among residents, but equally, albeit somewhat differently, it exists among those who govern. Perhaps more challenging an obstacle than anything else, the lack of support that will manifest, and in fact does exist among colleagues - both elected and appointed, is an element that cannot be overlooked. Long-term relationships, emotional ties to particular departments or programs, along with the comfort-level that accompanies the status-quo will serve to hinder and dispute the very idea of an independent review. These impediments however, do more to substantiate the need for a thorough review of our practices and productivity than they do to diminish such. Despite any views to the contrary and there is little doubt that many will be provided one cannot escape the simple fact that we as an entity have a moral, ethical, and professional responsibility to the stockholders of this community the taxpayers to ensure that we are providing them the very best return on their investment. Productivity/Efficiency Measurements In consideration of our responsibility to the public, one must question the benchmark or systems we currently employ to demonstrate a return-on-investment for residents. More directly, do we in fact even have a means by which we are able to demonstrate our overall effectiveness and efficiency to residents? If so, what is it? If not, then why? Further challenging the manner by which we justify services we provide our customers at the local level (the taxpayers who fund all operations), is the lack of a definitive cost-based accounting approach with respect to the value our tax dollars provide in terms of a cost-perresident ratio. For example, the Burgess Elementary School budget for FY13 is $9,095,756. The 3

most recent No Child Left Behind Act (NCLB) report lists the Burgess enrollment at 939 students, which equates to a cost-to-educate ratio of $9,686 per student. The Massachusetts Department of Education lists the student number at 953, which equates to a cost-to-educate ratio of $9,544 per student. Regardless of the figures used, we can identify a cost of approximately $9,600 to educate a child in Sturbridge. Within the educational system there exists a measurement criterion that helps to provide a basis for determining the effectiveness of dollars invested in our schools by way of the Massachusetts Comprehensive Assessment System (MCAS), as well as the graduation rates and college-placement rates achieved beyond elementary school. Whether one is a supporter of said approach or otherwise, it provides a foundation for measuring some level of student and teacher productivity, something not similarly available as it relates to Sturbridges general government cost-ratios. Were one to utilize a strict and rather broad budget-based approach in determining fiscal efficiency on the general government side, one might be led inaccurately so to believe that general government operates more efficiently and provides a higher return on investment than does the education side. For example, excluding the Burgess School budget and the Tantasqua share of the Regional School budget, the Towns general government budget for FY13 is $11,873,588, which at approximately 9,800 residents, equates to a cost-per-resident ratio of $1,211 for general government services. If you include both school budgets, the cost-perresident ratio, based upon the FY13 budget of $26,750,919, would stand at $2,729 per resident for overall government services including education. The question, however, is the reliability of these numbers considering they do not include all of the fees residents pay for other services that are not associated with general taxation, as well as the difficulty in measuring the productivity and efficiency of government services. For example, the ability to measure snow operations within the Town is not something that could be quantified with an MCAS type qualifier, nor could one MCAS grade our permitting process in the various departments. Equally, the school cost-per-student ratio is based solely upon those utilizing said services thereby reflecting a more accurate cost comparison, whereas the costper-resident ratio referenced model is based upon an entire population, not all of whom benefit from or use all town services. Thus, any attempts to compare the education side of our budget with the general government side of our budget would be disproportionately unfair to our education system as an apples-to-apples comparison simply does not exist. That said, we do have the ability to rate our productivity against other communities by way of cost-comparing services provided against funds (taxes/fees) leveraged for same. The often used 10-Town Comparison may provide a basis for measuring our cost-per-resident ratios if the data in those communities completely aligns with and is available for comparison. Equally, one might find some value in utilizing the widely-referenced Cost of Community Services (COCS) model that compares a communitys revenues/liabilities as related to commercial/industrial operations, acquired open space, and residential demands, to formulate a benchmark with which to measure some level of costing out a community. For example, the August 2010 COCS study reports that for every dollar raised by way of residential taxes in the Town of Becket, MA, it costs them $1.04 to provide services to same 4

excluding any and all education costs. Conversely, for every residential tax dollar raised in Deerfield, MA, it costs them $1.16 to provide services to same excluding any and all education costs. Note that these are dollar-to-dollar comparisons as opposed to the previous dollar-perresident comparison. This contrast serves to beg the question as to why it costs more in Deerfield to provide services than it does in Becket. Certainly there are many factors for the disparity but the key element for consideration is that no business can adequately quantify or qualify the services it provides without conducting a regular inventory of its overall operations. To be clear, the costing examples provided are not offered as the template or solution to addressing the challenge of government efficiency/productivity, but rather as a starting point for dialogue, debate, and challenge. It must be understood that any measurement system - as identified in the works of Arie Halachimi and Geert Bouckaert in their study of Organizational Performance and Measurement in the Public Sector, consists of practices, procedures, criteria, and standards that govern the collection of data (input), the analysis of the data (throughput), and the compilation of the results into quantitative or qualitative forms (output). Thus, if one is to ensure an accurate, objective, and reliable outcome, it is critical that the input, throughput, and output are based upon hard data that minimizes dependence upon averages that unintentionally tend to mislead or misdirect the outcome. To highlight this point, Halachimi and Bouckaert reference the story of a man who drowned in a lake whose average depth was only 12 inches; the data on the average depth ignores the additional information that many parts of the lake were much deeper and dangerous. Clearly, the failure to have a more complete picture of the challenges we face, is done at the peril of our community and the future of Sturbridge. Though there are many factors that comprise a community as well as the costs associated with providing services some of which are quantifiable, others perhaps not so, there is little doubt that the failure to implement a quantifiable means of measurement - as it relates to government productivity and efficiency - is a disservice to those whose hard-earned incomes are the revenue source from which all services are provided. To that end, an objective, fact-based, measurement-minded, detailed-oriented, fearless review of our organization and the services we provide should be welcomed, embraced, and encouraged as a means of proofing the structure and effectiveness of the government of the Town of Sturbridge. Roles/Responsibilities Generally, the Government Services Study Committee (GSSC) will conduct an overall efficiency/productivity study of all Town departments that includes the following: Overall Government Services offered o Staffing review associated with those services o Hours associated with those services o Staffing & experience levels associated with those services & departments o Cost/benefit to overall community o Cost/benefit Ratio o Cost per resident ratio

More specifically, the GSSC will compartmentalize its study to include a detailed analysis of each Town department/service to include the following: A review of each town department to include o Department responsibility o Services provided o Manning/Staffing levels o Total personnel/work hours o Compensation (e.g. salary, hourly pay, etc.) o Job Classifications associated with each position o Department overtime and policies associated with use of overtime o Existence and use of compensation/flex time o Sick days expended o Vacation days allotted/expended per department o Impact of sick days/vacation days on overtime where applicable o Overtime costs, compensation time or flex time liabilities associated with each department where applicable o Compensation/Flex time accrued/expended where existent o Effectiveness of fulfilling overall department responsibilities o Department Requests/Needs o Cost/benefit of services provided and recommendations attendant to same o Current in-place collective bargaining agreement review (where applicable) o Cost/benefit of current collective bargaining agreement o Cost/benefit Ratio o Cost per resident ratio o Recommendations/considerations for future collective bargaining approaches Recommendations consistent with a best-practice return on investment approach for services provided. o This would include recommended increases, decreases, consolidation of services/departments/personnel, or status quo staffing, as well as recommendations for outsourcing or in-sourcing where applicable. Recommendations consistent with a best-practice return on investment approach for town department staffing levels. o This would include recommended increases, decreases, consolidation of services/departments/personnel, or status quo staffing, as well as recommendations for outsourcing or in-sourcing where applicable.

Process The Government Services Study Committee (GSSC) would function as a Special Committee of the Board of Selectmen reporting directly to the BOS and be charged with providing quarterly updates to the Board as well as being assigned and/or developing a schedule defining benchmarks and a timeline for initiation/completion of each departments review. In support of 6

same, the GSSC will be granted the authority to access and review all financial and nonconfidential personnel records necessary to fulfill their charge. The scheduling/determination of each department's review will be determined by the Board of Selectmen after a public meeting with the Finance Committee, Personnel Committee, and Department Heads so as to allow input with respect to the process. This all-hands meeting, as well as continued dialog with all stakeholders is a critical component of the process as it provides opportunity to vet concerns, allay fears, and promote positive participation in the process, thereby nurturing or where appropriate developing the necessary emotional and intellectual investment in our Towns customer service approach. Additionally, it might be wise to consider securing the services of a productivity sciences firm to solicit some initial guidance/input with respect to the process. These services (provided by numerous professional organizations), could help jump-start the process, while providing a framework for industry best-practices with which the GSSC could benchmark its continued operations. Upon completion of individual department studies, the reports would be publicly reviewed by the Board of Selectmen, followed by a joint meeting with the Finance Committee for additional review and commentary prior to action by the BOS. If adopted, the GSSC Report would guide the process for consideration of any future requests and or initiatives specific to town departments. In addition it would provide a valuable tool for the Board of Selectmen and the community when assessing resources/needs/wants plus serve as a potential guide in support of the Boards development of collective bargaining strategies and future planned expenditures. Appointments As this is a Special Committee, appointments to the GSSC will be made by the Board of Selectmen for an indefinite period. Restructuring/Discharge The Board of Selectmen maintains the right to at any time restructure the committee as deemed necessary or appropriate to its special assignment, or to discharge members unable to fulfill their charge in a manner best suited for the committees ability to function independently, objectively, and transparently. In addition as this is a Special Committee with a specific responsibility, the Board of Selectmen will determine upon completion of the project, the necessity or lack thereof for any continued role in support of its primary roles/responsibilities. Composition As the role of the GSSC places significant demands upon its members in terms of employing a systems-based approach to productivity and efficiency measurement, it requires individuals

willing/able to undertake a Systems Thinking1 model. Additionally, this body requires the credentials/credibility to command the level of universal cooperation necessary for success. In recognition of such, experienced members of the Executive Branch and the Finance Committee form the basis for a strong foundation with which to staff the GSSC. Equally, the comprehensive nature of the responsibilities associated with the GSSC would suggest a working group capable of multi-functional research that at times may require cross-disciplinary analysis. Thus, the following composition is recommended: 2 Members of the Board of Selectmen 2 Members of the Finance Committee 3 Residents-at-large The resident-at-large positions are to be filled by individuals not serving the town in any paid capacity or related to employees of the town. It is preferable that residents-at-large have a professional background in business/personnel management and/or a professional financial/accounting background. Additional preferable experience may include individuals with a strong background in statistical analysis and/or data base management systems-analysis. Organization As the GSSC will be established as a Special Committee of the Board of Selectmen, its organization in terms of its chairmanship shall be appointed by the Board of Selectmen, consistent with Parliamentary Procedure. As such, in that the vice-chairman must assume the responsibilities of chairman in the event of absence and/or resignation of the chairman, the second-serving BOS member of the GSSC shall serve as its vice-chairman. Additionally, the committee shall elect a clerk, responsible for the maintenance of all records, reports, and minutes of meetings. NOTE: This document is intended to provide the basis for constructive and meaningful dialog focused on producing the best model by which to analyze/measure our communitys productivity and efficiency. There is little doubt that the very thought of analysis can spur fear, anxiety, and distrust among those subject to such review, while equally creating skepticism among public officials or others who may be generally inclined to support the current system or structure as is. More often than not, the reluctance to consider or support analysis of a system stems from emotional attachments and/or a level of comfort with the known; this is certainly understandable. It is however worth noting that the strength of any system or organization comes not from what we think we know about ourselves, but rather from what we have proven we know about ourselves by way of an objective, honest, and rigorous self-inventory. To that end, in recognition
1

Systems Thinking has been defined as an approach to problem solving, by viewing "problems" as parts of an overall system, rather than reacting to specific part, outcomes or events and potentially contributing to further development of unintended consequences. Systems thinking is not one thing but a set of habits or practices[2] within a framework that is based on the belief that the component parts of a system can best be understood in the context of relationships with each other and with other systems, rather than in isolation. Systems thinking focuses on cyclical rather than linear cause and effect.

of the high regard we all maintain for our community, we should embrace this review as a testament that speaks to just how good we really are at what we do.

Thomas R. Creamer, Selectman Town of Sturbridge