Grading the Cities introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Virginia Beach Revenue Rank: 31 Form of Government: Council-Manager Mayor: Meyera E. Oberndorf (took office 1988) City Manager: James K. Spore (appointed 1991) City Council: 11 members, including mayor (7 elected by district, 4 at large) FINANCIAL MANAGEMENT: A- Call it the Umbrella City. Virginia Beach has one of the strongest rainy day funds around, at 10.7 percent of general fund revenues as of 1998. Minimum and maximum balances are clearly spelled out by written rule, and formal city council action is required for use of the reserve. The fact is, though, this consolidated city/county isn’t counting on its rainy day fund to keep it out of trouble. It has solid investment policies, pays close attention to the fiscal impacts of current actions, and has been increasingly accurate with forecasts as the economy has stabilized. One weak spot in its overall financial picture is slightly underfunded pensions, a consequence, in part, of the city’s decision to fund raises for its employees. Managers here are somewhat stifled by controls over their ability to move money from one activity to another. A transfer of more than $25,000 requires city council approval. “We tried to change that to provide more capacity for managers,” says Walt Kraemer, director of management services, “but the council wasn’t comfortable with that.” HUMAN RESOURCES: B Virginia Beach does particularly well in communicating with employees and seeking their feedback. Employee surveys are done regularly, there is an active staff suggestion program, and much feedback comes in through e-mail, which is handled by a “member communications coordinator” hired recently to enhance the dialogue with employees. Although Virginia Beach doesn’t reward superior performance through salaries or bonuses, it’s one of the best at finding other ways to recognize workers for doing well. For example, it has what it calls a “Class Act Award.” “We get $15,000 a year,” says Human Resources Director Fagan Stackhouse, “to buy awards for less than $10 each for someone who does a classy thing. The employees really appreciate it. We give it to them in front of others.” The big weakness here is in planning for future work force needs. This should be a matter of concern, because many employees joined the city in the mid-1960s, after its merger with the county, and will be reaching retirement age at about the same time. “We are going to have to plan for that,” says Stackhouse. This job is made somewhat more difficult by weak information technology in human resources. INFORMATION TECHNOLOGY: B The city has a solid set of standards in place for IT, developed by a Department of Information Technology advisory committee. This committee consists of 40 members, representing most of the city’s agencies (including some you wouldn’t expect, such as courts). Managers benefit from relatively strong financial management and capital management information systems. Only human resource technology lags somewhat. “It is basically a payroll system,” says Sullivan. “I wouldn’t even call it an HR system.” Virginia Beach is now looking into upgrading it. Some cities have simply taken their senior official assigned to information technology and called him a CIO. Virginia Beach did not do that. “The IT director already had 60 hours’ worth of work to do every week,” says David Sullivan, who was promoted to the newly created CIO position last summer. “I want to be dealing with strategic issues, not the day-to-day operating issues.” A new IT director was brought in for overseeing daily operations, while Sullivan develops the city’s first genuinely strategic long-range plan. CAPITAL MANAGEMENT: A- Unlike many cities, Virginia Beach prepares its capital improvement plan as if someone is going to read it. The document is one of the most informative and well-organized ones around. It includes an array of summary tables, a detailed discussion of the capital selection process, useful maps and a helpful glossary. The document is based on an annually updated six-year capital improvement program, with a one-year budget. Public facilities, schools, roads, parks and other public needs are included, with a set of carefully laid out criteria used to prioritize similar projects. Limits, based on funding ability, are provided for each project category. In the past, the city hasn’t been particularly strong at evaluating the condition of its existing facilities. But it has begun a five-year project to alleviate that. Buildings have been rated A to F based on age, operational life and appearance. This will be followed up with inspections by engineering students and city maintenance employees. Then the city will determine its backlog of maintenance needs. MANAGING FOR RESULTS: B Virginia Beach has made a largely successful effort at keeping a variety of independently elected department heads involved in managing-for-results initiatives. “If you isolate them, you should expect that they’re not going to play,” says Walt Kraemer, director of management services. “If you see them as part of the solution and tell them that, they have more of a tendency to participate.” The city just finished a five-year-long strategic planning process. The completed plan does not have a set time horizon but is being updated constantly. The city council conducts a retreat every year to establish its “destination points, the targets it wants to achieve for the consolidated city/county in the short and long term. The city is moving toward effective use of measures to inform its decision-making process, but most of the measures are currently output- or efficiency-related. While performance data is a key part of the city’s annual resource-allocation process, managers have had difficulties making their measures useful to the city council. AVERAGE GRADE: B+ Copyright © 2000, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.