Vancouver: reporting service metrics helps with strategic budget decisions.

• Author: Munro, Melinda
• Position: [PM.sup.2] Connections: PERFORMANCE MEASUREMENT & MANAGEMENT

This article was originally published in the GFOA's Canadian Finance Matters Newsletter, Volume 13, Issue 2.

When the City of Vancouver, British Columbia, faced lower development charges in 2009, for the first time in recent memory, it became clear that the city could no longer rely on steady growth, and the city would need to examine its service delivery and decision-making processes. In 2012, that process led the city to focus on the level of detail in the budget presented to the city council for approval. The chief financial officer engaged a consultant to research best practices in public-sector budgeting and offer options on how Vancouver could improve and become a leader in transparent and participatory budgeting. The city decided to focus on two key improvements: combining the capital and operating budgets into a single document and adding performance metrics to illustrate the relationship between the financial investment and the outcomes for citizens.

Combining the capital and operating budgets enables the council to see the relationship between the city's immediate operational focus and its long-term service-building decisions. Adding performance metrics illustrates how the investment decisions relate to the quantity, quality, and results of the services, in both the immediate and the long term.

BUILDING PERFORMANCE METRICS INTO THE BUDGET

Under the leadership of the CFO and the director of financial planning and analysis, the city's general managers and directors of the largest departments (by budget) were asked to provide performance metrics showing the quantity (volume of effort), quality (efficiency and satisfaction), and result (outcome) of their services. Of course, it wasn't as easy as it sounds. Identifying metrics requires a precise, detailed understanding of the services provided.

Each department provides a number of services; for example, in Vancouver, the Engineering Department is responsible for the water, sewer, solid waste, and neighborhood energy utilities as well as street construction, street cleaning, street activation (closures for community events), transportation planning, parking, and corporate equipment management. Within the solid waste utility, there are also multiple services such as curbside collection of recyclables, organics, and garbage as well as landfill management. Setting metrics at the departmental level is too general; the data can't be used to make meaningful decisions. On the other hand...