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FROM: MAY-JUN 2009 ISSUE | BY JEFF BUCKSTEIN
Nearly two decades after many federal and provincial government responsibilities were downloaded to Canadian municipalities, in the midst of a serious recession that is putting unusually strong pressure on municipal tax bases, the need for municipal accountability in Canada is as strong as it has ever been.
Many municipalities have risen to the task with comprehensive financial, social, and other measurements that have been in place for a decade or even longer, which has given them a solid and growing database of information.
Jurisdictions are “now looking at multiple year trends, and that is certainly putting this information into (sharper) focus,” says Lorne Turner, manager of performance management for the City of Toronto. “Performance measures are becoming more and more important each year in the budget process,” he adds.
One of the most highly regarded provincial programs in Canada is Ontario’s municipal performance measurement program (MPMP), which was unveiled in 2000 and became a mandatory reporting tool for all provincial municipalities in 2001.
Ontario’s 444 municipalities of all sizes are currently subject to 12 core service areas within MPMP, representing 54 measures of efficiency and effectiveness. The core service areas are: local government, fire, police, roads, transit, waste-water, storm-water, drinking water, solid waste management, parks and recreation, library services, and land-use planning.
The Ontario government is also examining the merits of adding four new measurements to that list – building services, housing, long-term care, and museums, says Andrew Balahura, MPMP program lead for Ontario’s Ministry of Municipal Affairs and Housing in Toronto. He notes that MPMP was put in place to “promote public accountability and provide municipalities with a tool to make informed and sound decision making.”
Also in 2000, the Ontario Municipal Benchmarking Initiative (OMBI) was instituted to assist municipal chief administrative officers and city managers to measure progress towards goals in areas such as:
- the efficiency with which resources are transformed into goods and services (outputs);
- the quality of those outputs (i.e. measuring how well they are delivered to residents, and how satisfied they are with those services);
- outcomes, in terms of measuring whether the desired activity of a program delivery has been achieved; and
- the effectiveness of services delivered in terms of meeting program objectives.
OMBI currently has 15 voluntarily participating municipalities representing 9.1 million Ontarians, nearly three-quarters of the province’s population. Eight participants are classified as single-tier – subject to only one level of municipal government, which delivers all services to its residents. These include the cities of Greater Sudbury, Hamilton, London, Ottawa, Thunder Bay, Toronto, and Windsor, as well as the County of Brant.
Seven upper-tier municipalities (which deliver services such as police and social services over a large area, as opposed to lower-tier local municipalities, which deliver services such as fire and parks) are also included. They are the District of Muskoka; plus the Regional Municipalities of Durham, Halton, Niagara, Peel, Waterloo, and York.
“Senior management in these 15 municipalities have said ‘this is an important part of the way that we do business.’ It demonstrates the transparency of our data and our accountability,” says Turner.
OMBI currently uses high level accountability measures on 22 publicly reportable service areas in its annual reports. Some overlap with MPMP measurements, such as fire, police, and waste-water. However, OMBI also provides measurements in additional categories, such as by-laws, child-care, emergency medical services, hostels, long-term care, parking, and taxation, among others. It also provides additional detailed measures to assist front-line managers.
OMBI provides standardized methodologies so municipalities can collect performance information and make it as consistent and comparable as possible. “I really see that as a best practice right now across the country for municipalities looking at benchmarking their performance against other municipalities,” says John Haigh, manager of corporate measurements and reporting for the City of Calgary.
Participating municipalities determine how best to use the data affecting their respective jurisdictions, and monitor municipal activities and improvements made as a result of this knowledge by consulting with senior staff and elected municipal officials about the results.
“There have been a number of novel and interesting uses of the data, and some leading practices developed with the assistance of OMBI Expert Panels,” explains OMBI project manager Ron Gibson, who is based in the Regional Municipality of Niagara in Thorold, Ontario.
For instance, he notes, work has been carried out with respect to energy management and water conservation in the water and waste-water divisions of several municipalities. “Our EMS Expert Panel has been looking at ways to further improve response times, and our Long Term Care Expert Panel members are using the results to track resident satisfaction and safety in their respective facilities,” Gibson adds.
On top of that OMBI continues to “look at ways to improve our benchmarking processes; to improve the quality of the data; and to increase the value of that data to our stakeholders,” Gibson asserts.
Toronto uses 23 different service areas providing valuable data in its annual benchmarking report, says Turner. Take fire, for instance. Toronto’s 2006 Performance Measurement and Benchmarking Report showed that fire related injuries are declining in Toronto. In 2006, there were 82 such injuries, down sharply from 130 in 2005 and 172 in 2004. This measure dates back to 2000, when numbers were much higher still.
These statistics are key outcome indicators in fire services, and the results reflect advances in the area of public education and fire prevention, which are likely key factors behind the decline in these numbers, explains Turner.
Other provinces and cities also have municipal performance indicators in place. The province of Quebec has a program with approximately 120 municipal indicators covering broad areas such as finance, road maintenance, snow removal, drinking water, and the management of waste-water. Fourteen of those measures are mandatory.
Nova Scotia has a set of municipal indicators which Service Nova Scotia and Municipal Relations describe as “financial, community, governance, and performance indicators” designed to help citizens and government “better understand the challenges facing municipalities” in that province.
Nova Scotia’s municipal indicators include financial measures such as: taxes as a total percentage of revenue; expenditures per dwelling unit, liquidity ratio, debt service ratio, capital infrastructure derived from revenue, and operating budget funds. Community measures include average household income and demographic statistics; and performance measures with respect to police and fire services; transportation; waste-water; and solid waste management, among others.
The goal of these measures is to “provide accountability to the public and encourage a more strategic approach to policy development and management in municipal government,” says Service Nova Scotia’s website.
British Columbia’s Community Charter, which came into effect January 1, 2004, is more broadly based. The Charter requires each of its communities to report annually to their citizens about community objectives and what measures have been and are to be used to mark progress during the current and following year.
Alberta does not have mandatory measurements in place; however, individual cities and towns within the province are free to pursue their own initiatives. Calgary, for instance, introduced a series of performance measures in 1995 after municipal revenue streams were cut by the Alberta government and municipal managers wanted to keep a tighter rein on managing their operations.
Calgary currently uses a tiered approach to measures related to community outcomes. On a strategic level, that involves a three-year business planning cycle, which is connected to a performance measurement framework. On an operational basis, “we’re trying to instil a culture of utilizing performance measurements as a management tool,” explains Haigh. The goal is to “encourage development of performance measures and key indicators so managers have the tools they need to make quicker, more accurate management decisions.”
For example, Calgary is tracking the achievement of performance targets connected to each of the approximately 500 services offered through its 3-1-1 telephone system. This system covers a wide range of activities, such as transit, property assessment values and taxes, pet licensing, recreation program registration, waste collection, and contact information for municipal officials, among myriad other offerings.
Calgary also makes judicious use of citizen surveys as a framework for achieving desired outcomes. These findings are statistically correlated to help develop measures with respect to improved service and program delivery.
Canadian municipalities have come a long way towards asserting their importance as a level of government that delivers key services and programs. As we approach the end of the first decade in the 21st century, many municipalities and provinces have also recognized they have a commensurate responsibility to hone and refine the sophistication with which they measure and report on those activities to the citizens they serve.
Municipal Accrual Accounting Affects Performance Measurements
The requirement for municipalities to adopt full accrual accounting for their financial reporting, which began January 1, 2009, will also significantly impact municipal performance measurements.
Accrual accounting “will give a more wholesome picture of the municipalities’ numbers,” says Andrew Balahura, program lead for Ontario’s municipal performance measurement program (MPMP).
For example, under Public Sector Accounting Board (PSAB) standard 3150 – Accounting for Tangible Capital Assets, MPMP will, for the first time, be able to record efficiency measures for the total cost per output for every service involving both capital and operating costs, not just operating costs, Balahura points out.
Accrual accounting should also provide municipalities and those in charge of individual services within those jurisdictions with a better idea of how capital assets are being managed over the longer term, adds Ron Gibson, project manager for the Ontario Municipal Benchmarking Initiative.
Municipalities are currently engaged in significant financial exercises as a result of PSAB 3150, which will require amortization of capital assets based on historical cost.
For the City of Toronto, that means billions of dollars are being put on the books, as assets are valued at historical cost. “We’ll be setting up assets previously written off as capital expenditures as the money went out the door,” explains Mike St. Amant, the city’s director of accounting services.
Furthermore, “it’s not the typical assets a business would have. We’ve got road, water, and sewer networks that aren’t as easy to value. Some of these networks we spent money on 120 years ago, so the best we will get for the initial number is an estimate,” adds St. Amant.
Vancouver currently records its land at assessed value; consequently, “a significant adjustment” will be required to bring those values down to historical cost, notes director of financial services Esther Lee. To date, Vancouver has been capitalizing most capital assets, and depreciating “most but not all classes” of such assets, she says. |
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