Posted tagged ‘responsibility’

Should Local Government Be Profitable?

April 8, 2010

At the SCAPA conference in Greer two weeks ago (3/26/10), the last speaker of a warm, sunny Friday was the most thought provoking. Beaufort City Manager Scott Dadson applies his finance background to his role as the City’s chief executive officer. Dadson equates taxpayers to investors and users of public services as customers.

Alas, Dadson has not posted the presentation he gave to South Carolina’s city and regional planners, as promised, yet the Beaufort City Manager’s web page offers plenty of resources. Here are my takeaways.

In Dadson’s “Getting Our Heads out of the Sand” (That’s right, Dadson wrote, presented, and delivered a document to the Beaufort Chamber of Commerce titled “Getting Our Heads out of the Sand!”), Dadson defines profit, in local government terms, as desired results, which furthermore equate to the net present value of a decision and the cost of the future.

Dadson quotes author Ken Miller (We Don’t Make Widgets: Overcoming the Myths That Keep Government from Radically Improving, Governing Books, 2006), “To say we’re not here to make a profit is akin to saying we’re not here to achieve results… When we are not focused on results, we get bogged down in how we do things (policies, procedures, and process) and forget why we are doing them in the first place.”

Dadson applies this thinking to capital budgeting, a responsibility common to both, business and local government. He points out that local government councils rarely consider the increase or decrease in cash flow due to a capital project; rather, a decision to implement is based strictly on initial cost. Operating costs and changes in revenue (due to altered property values or new permit fees, for instance) are neglected; and what are the costs (in unrealized revenue) of forgoing the improvement altogether?

In his presentation to SCAPA, Dadson highlighted the cost burden of the cul-de-sac to taxpayers. Cul-de-sacs are typically constructed by the private sector, so local government incurs no capital cost. The design, however, requires public service vehicles to double back on each service call (trash pick-up, school bussing, etc.), thus raising costs to taxpayers for labor, fuel, and vehicle maintenance.

In “Getting Our Heads out of the Sand,” Dadson raises the example of firehouses. Clearly, increased fire protection has tangible and intangible benefits to taxpayers; however, local government must consider the costs of staffing and equipping each firehouse in addition to initial capital costs incurred for construction, even if these costs are nil, as in the recent environment of “”pay to play” residential growth (i.e., developer-funded infrastructure to serve proposed land development).

If local government were to function more like a business, customers (residents, merchants) would demand effective service delivery, investors (taxpayers) would demand return on investment (taxes paid), and the board (city council) would make the most profitable decisions (yielding optimal results) based on informed professional leadership of the CEO (city manager), recognizing that the most profitable (efficient, beneficial) course of action is only sometimes the cheapest up front and occasionally to refuse or reduce service. The sum of decisions that account for the cost of the future will profit the taxpayer, the resident, and the merchant in the form of better public services and/or lower taxes (the desired outcomes) over time.

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“Leadership in Tough Times”

April 5, 2010

Myriad volumes of text have been written about leadership. I received this in an e-mail from Rodney Hall of the Talon Group. I have no affiliation with Mr. Hall except that I’m on his distribution list. Hall credits a ULI discussion for his content. I found this brief insight straightforward and unpretentious and advice most of us can put to work right away.

Leadership in Tough Times

The burden of the economic recovery extends beyond unemployment statistics, business failures and the erratic financial markets. It forces us to modify our behavior on several fronts, personally and professionally. How it impacts the leadership role was a topic of discussion at a recent ULI meeting. Here are the highlights:

Communicate- more often!

  • It’s not enough to simply communicate with your team- for maximum effectiveness it must occur frequently. This goes a long way to curbing speculation and helping team members stay focused.
  • Withholding relevant information leads to speculation, rumors and hearsay. If bad news lands on the doorstep, better to share it than not.
  • Share only what needs to be shared; don’t over-inform. People deserve to hear the truth, but not beyond the facts that pertain to them.
  • Take internal audits to gauge team members’ state of mind: what are they feeling, what are their needs, what can you do to support them?
  • Tip: It’s perfectly fine to not have answers to every question or comment; listening is the first step to being an effective leader (and probably the most difficult for people in leadership!)

Model the Right Behavior

  • You don’t have to be the first to arrive and the last to leave every day, just make sure you’re not a LIFO- Last in, First out.
  • Do more than is required and not just in your area of responsibility. Pitching in to help others- above or below your rank- is the at the heart of servant leadership.
  • Remember, nothing kills morale more than a leader labeled as “Do as I say, not as I do.”

Engage the Team

  • The ability to adapt to changing environments or market demands is critical to the success of any business. The same is true of the people on your team. Help them break free from the routine by encouraging feedback.
  • Step 1: make certain everyone understand the basics well and are pursuing those standards consistently. No need to try building on a weak foundation!
  • Step 2 : keep everyone focused daily on the “work at hand” or in Zen terms, “being in the moment”. This helps minimize distractions, gossip and needless speculation.
  • Step 3: ask for input, ideas and feedback then, actually try some of them. Celebrate the successes (loudly), no matter how small the impact. In times like these, your team needs every win it can get!

Source: The Talon Group
16801 Addison Road, Suite 410
Addison, TX 75093