Researching efficiency in local governments.

• Author: Meyer, Betty

In recent years, many local governments have found that sustainable levels of revenue growth and expenditure trends do not match up. Closing the gap to ensure a structurally balanced budget has required a combination of tax rate and fee adjustments, and expenditure adjustments achieved through service-level changes or increased efficiency and effectiveness measures.

To address similar challenges, the City of Norfolk, Virginia, set up research teams to identify ways in which the government can work more efficiently. Using a five-step process, these teams have identified, studied, and overhauled a wide variety of research areas, including:

* Consolidation of maintenance in departments providing culture and entertainment services.

* Transition of waste management to a special revenue fund.

* Sharing facilities for human services and mental health services.

* Centralization of data on city-owned assets.

* Staffing alternatives for library operations.

* Improvement of records management workflow.

* Analysis of required shift staffing for the fire department.

* Privatization of all custodial services.

In the first year of the research, the findings and related recommendations led to a combined $1.7 million in ongoing operational savings. The second year focused more on process improvements and therefore produced less in measurable savings than the first year--a total of $341,853. Some of the changes will lead to additional savings in future fiscal years. These savings helped balance the city's budget and improve efficiency.

BACKGROUND

Norfolk faced a $30 million gap between annual revenue and expenditures for its fiscal 2012 operating budget, primarily due to declines in housing values and related property taxes. In addition, the Hampton Roads economy, of which Norfolk is a part, generates 42 percent of its gross regional product from defense spending, so trends in federal spending caused by the decrease of military action in the Middle East and automatic budget cuts created further challenges.

While one strategy is to raise taxes, Norfolk's ability to do so is limited because it has many low- to moderate-income residents. The city has many assets, including a vibrant economy and neighborhoods, but it also faces many challenges and was concerned about ensuring a vital future. As a historic port city, Norfolk has extensive service and infrastructure needs. Moving toward a structurally balanced budget--creating strategies to address resource gaps while retaining core services to citizens--led the Norfolk City Council to six prioritized areas of focus (see Exhibit 1).

Exhibit 1: Norfolk's Citywide Priorities * Accessibility, Mobility, and Connectivity: A comprehensive network of accessibility and information-gathering options addressing all traditional transportation modes as well as new...