Across the country, municipalities are struggling to find the right way to manage looming budget deficits. While budget cuts are an inescapable reality, public managers do have options as they determine what to cut. But to make informed decisions, officials need to know what is working and what is not. And, that starts with performance-based budgeting.
Mayor Joseph A. Curtatone has enacted transformative changes in the management of Somerville, Massachusetts, and has done so by championing the importance of cost and efficiency data for all city services to improve accountability and performance. These efforts led to the creation of the SomerStat program. His approach to reform serves as a particularly timely primer on how to establish new norms for tracking and improving service delivery, giving officials the tools to know where to cut costs, where to keep investing and where there are opportunities for innovation.
|Watch Stephen Goldsmith's interview with Mayor Curtatone. More interviews are available on the Ash Institute YouTube Channel.|
Curtatone started his political career by serving as an alderman for eight years beginning in the late 1990s. As chair of Somerville's finance committee, Curtatone became frustrated by the city's traditional line-item budgeting -- there were only inputs and no measurable objectives and goals. Furthermore, he saw a fundamental flaw in line-item budgeting, as it provides an incentive for departments to spend down their budgets each year or risk having their budgets cut the following year. Curtatone's frustration grew as the city's fiscal troubles mounted, especially when Massachusetts sharply reduced aid to cities and towns in fiscal year 2002. Forced to find ways to cut the budget, there was no data available on which to base these decisions. The city's management style was like "driving a car blindfolded." To Curtatone, it seemed obvious that "you can't manage what you can't measure."
Performance measurement and accountability became the cornerstone of Curtatone's mayoral campaign. While these may not seem like revolutionary ideas, performance-based budgeting had only been implemented in a handful of municipalities at the time. Most notably, Baltimore's data-driven CitiStat program had achieved significant improvements in service delivery. Campaigning on a platform of management reform, Curtatone became mayor in 2004. He quickly took action to back up his campaign promises.
Curtatone took staff members on field trips to Baltimore to learn from the CitiStat program. He also took the unusual step of tapping into the world of academia, by visiting Professor Linda Bilmes' public finance class at Harvard's Kennedy School of Government in nearby Cambridge. Curtatone first met Bilmes while serving as an alderman, when he attended a seminar for newly elected officials convened by Harvard's Rappaport Institute. Curtatone asked the students for help, and 60 of them signed on to create a new budgeting system that focused on measurable outputs. This unique partnership provided Somerville with free "consultants" and the students with a real-world learning and working experience for course credit. The students analyzed 17 city departments and created performance measures for each.
Bilmes' students immediately identified Somerville's relatively small population of 80,000 as a distinguishing factor from CitiStat's implementation in Baltimore. As one student put it, "The city's size is both a challenge and an opportunity: a challenge because the city does not have a lot of resources to throw at the problem, but an opportunity because change can be implemented relatively quickly when working at a smaller scale."
Because of Somerville's small size, Curtatone's continued, and vocal support for SomerStat was heard loud and clear throughout city government. This is, arguably, a defining factor for any successful public management reform. Without dedicated executive sponsorship, it would have been impossible to get active participation from all of the city's agencies. The strong and consistent message that Curtatone sent to city agencies was that change was coming and that change was good. By framing performance-based budgeting in a positive way, Curtatone was able to overcome resistance to the status quo. Curtatone and SomerStat's director, Stephanie Hirsch, created a framework of regular "Stat" meetings with department and city leaders, which helped project an air of commitment and seriousness about the process.
These meetings drive the SomerStat program. They are extremely structured. They are used to set goals, measure progress and solve problems; they start and end on time; and the agenda and any relevant materials are sent out by midnight the day before.
SomerStat has now taken Baltimore's CitiStat program one step further by integrating real-time data into its arsenal. According to Hirsch, this has allowed the city "to intensify its reliance on data for decision making." The mayor's office requires that all city data be centrally accessible by the SomerStat office. This means that data from more than 50 sources are reported to the SomerStat office, from enterprise-wide and stand-alone systems. In fact, Curtatone subsequently created a major new source of performance data by implementing a centralized 311 constituent center (the first such center in New England) that tracks and issues work orders for every resident request for city services.
The first success to come from SomerStat's analysis of this data was when it revealed a persistent problem of excessive overtime in the police department. The biggest culprit was that overtime costs were incurred whenever an officer was needed to cover someone who was out sick. Police leadership immediately started working with the mayor's office and the union to create a solution. By increasing the number of officers assigned to each shift, the police and the mayor were not only able to rein in overtime costs, but were able to improve their community policing efforts by maintaining higher staff levels for each shift. "We've reaped one of the first rewards of the SomerStat process," Curtatone said. "This is part of our overall effort to modernize city government, cut waste and improve services."
Early successes like this built confidence within the city's government that the new era of data-driven decision making was not going to mean punitive measures and runaway cutbacks. In fact, city workers and elected officials were being invited to the table to find ways to serve their community better.
Jessica Engelman assisted in the research and writing for this article.
Series introduction: Lessons from Our Best
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