Fix it First
Public messages can be confusing. But it is very clear, the public wants their money to be spent wisely. Where this gets complicated, is when doing the right thing, costs more than the public is comfortable in spending. We have been working to articulate five simple strategies intended to make good use of our resources.
- Plan for the Future;
- Fix it First;
- Employees who are treated well do excellent work;
- Create a culture of service; and
Some public messages convey that as a low-income community, taxes need to be low. How do we reconcile the need to keep taxes low with the need to maintain our assets or risk greater future costs?
COMMUNITIES OF EXCELLENCE (Creating the Community of your dreams). Time marches on and some problems cannot be solved in a lifetime. But, rest assured, they will never be solved, if we don’t work together to make it a priority. We are starting our third year with Communities of Excellence. This coming year we will define our Opportunities for Improvement (OFI) and organize to develop action plans. Our OFI include Housing, Health, and Economic Development. We have recruited community members from a broad cross section of business, industry and social agencies to ensure we select doable strategies together for improvement.
RAINY DAY FUNDS (Build and Maintain adequate reserves). I was recently asked if it was true, that the city has $4 million in savings, as if this was a bad thing. We are not-for-profit, so we do not strive to have higher taxes than are needed. The City’s current policy is to maintain 15% ($1.2 million) in reserves. Reserves play a significant role in maintaining financial stability. I wouldn’t mind if we could maintain a reserve equivalent to six months ($4 million) of general fund operating expenditures. We are working to eliminate raids on these reserves by strengthening the departments that have been borrowing from the general fund, so they can support themselves. This practice is not a recent development, so it won’t completely change overnight. It has required us to have some difficult conversations. I have had employees ask to use these reserves for salaries, and more recently it was suggested that if reserves were used to fund water and sewer needs, a utility rate increase would not be needed. It should be obvious, but to use reserves consistently for operating expenses is unsustainable.
PLAN FOR FUTURE (Prepare long-range financial operating plans). Long-term financial plans identify critical items often left out of annual budgets, these can include deferred costs, impacts of lost revenues, future salary and benefit agreements. A long-range plan serves as an early-warning system and allows localities to take corrective actions before the problems become unmanageable. We have been focusing on capital replacement and maintenance but need to expand this to include salary and benefits and revenue streams.
FIX IT FIRST (Protect capital assets). We spend millions of dollars acquiring and developing capital assets — buildings, grounds, water, sewer and storm water facilities, and streets. Unfortunately, infrastructure maintenance dollars are some of the first things cut or diverted in favor of other more visible programs. The result is not seen immediately. In some cases, it takes years before problems begin to appear, but eventually they show up in noticeable ways. Neglect leads to deterioration and can require expensive replacement instead of repair. Good budgeting requires that a percentage of current revenues always be devoted to preserving a department’s investment in its capital assets. Failing to protect assets not only costs more in the future, but also exacerbates community deterioration. We have created a 20-year capital plan to identify the annual minimum investment needed to sustain the plan.
IMPROVE VALUE (Marketability). To enhance community attractiveness will increase property values, will increase investment. This is a mixture of incentives and enforcement. Investments in neighborhoods, Community Center, Golf Course Clubhouse and in parks and other amenities are also important to building up our community.
The successful use of Chapter 353 in the downtown area has attracted over $300,000 in private investment this year, which improves the enjoyment of our residents and visitors alike. I heard on shop owner say, 75% of his sales were from out-of-towners. The Golf Course increased membership by 145 new memberships this year and more rounds of golf were played this year than memory allows, with two record months. Sixty percent of our memberships are from out-of-town. The Community Center continues to keep it fresh and inviting with something for all ages and abilities. Our Park & Recreation Department is leading the nation by creating gaming opportunities for non-athletes to compete. This is just one of the latest ways our students are qualifying for college scholarship opportunities. I read somewhere that school activities give our children an opportunity to be somebody, and that is the very thing that creates successful adults. The investments we are making in these amenities are just as important as the necessities given the social benefits derived.
MINIMUM STAFFING. Workflow is seasonal, but there are generally offsetting priorities in every season. We currently staff at minimum levels and utilize contracted services or part-time seasonal workers as needed to meet demands. While this is necessary to balance the budget, it can be more difficult to provide a consistent level of service and is a source of frustraction for the public, who has a high demand for service and our employees who bounce between competing priorities.
SALARY & BENEFITS. Identify the true cost of employee salary and benefit packages. Employee salaries and benefits can consume from 70 to 90 percent of the budget. Salaries ideally are based on what the competition is paying. The competition usually consists of neighboring local governments that recruit in the same market for the same skills and experience. Over the last year, we experienced the greatest increase in cost with our health plans and adjusted to control costs. We have recently completed a salary market study and are working on the benefit and total compensation portion of this effort. We found we do a much better job than we have been telling ourselves in keeping pace with our competition.
CUSTOMER SERVICE. We are working to streamline our internal processes and interdepartmental procedures. We are looking for ways to improve our knowledge sharing in order to improve problem solving and the customer experience. This is how we create a culture of service; it isn’t just up to the front line to make a good impression; it takes all of us for the front line to be winners. For too long we have left customer service the responsibility of just a few of our employees, but it takes all of us to make a difference. Every job regardless of whether we interacted with the customer or not made an impression. We need to make sure that lasting impressions is a good one.
CULTURAL CHANGE IN COMMUNICATION. People rely upon those they trust to shape what they believe, which is also how inaccurate information spreads. We will continue to look for many ways to reinforce accurate information, actions matching words. The picture below illustrates the different tribes we belong to and how false information spreads based on our casual relationships. We want to do better to keep the community informed and plan to experiment until we find the successful combination.