Search form


Become a Member Today Sign Up

Case Study

BECOMING AN INSIGHT DRIVEN ORGANIZATION
SHAK PARRAN, JOHN MACLEOD & SWATHI SADAGOPAN, DELOITTE

Analytics has exploded as a practice area over the past five years, and while organizations have responded by investing heavily in the latest technology, they would be well-served to consider the larger analytics ecosystem. Maturity in this area can drive growth for an organization, as a recent study by Deloitte illustrates, but it has to be built on a foundation of more than just technology.

 

“Our analysis revealed that organizations that are analytically mature are significantly more likely to have exceeded their corporate goals in the past 12 months than less mature ones. Canadian organizations have begun to welcome this notion, as our results found that business analytics is identified as their most important business priority over the next few years.”

 

A global team of Deloitte analytics experts recently developed a proprietary framework for measuring analytics maturity in organizations. Known as the Insight Driven Organization (IDO), this framework uses five levels of maturity to evaluate how mature or developed organizations’ capabilities are with respect to analytics:  

Level 1: Ad hoc analytics organizations. These are those that are aware of analytics, but have little to no infrastructure and a poorly defined analytics strategy. Analytics capabilities are either non-existent or mostly informal.
 
Level 2: Localized analytics organizations are those that are adopting analytics, building capability, and articulating an analytics strategy in silos. Analytics capabilities are scattered among one or two teams in the organization.
 
Level 3: Organizations with analytic aspirations are those that are expanding ad-hoc capabilities beyond silos and into mainstream business units. At this level, analytics capabilities are well-developed within at least one business unit. Standards for analytics have emerged and are used at the business unit level.
 
Level 4: Analytical organizations are those that are industrializing analytics to aggregate and combine data from broad sources into meaningful content and new ideas to feed the entire organization. At level 4, we see business units that are key to the organization’s win strategy, using analytics as a competitive differentiator.
 
Level 5: Those that are most developed are Insight Driven Organizations (IDO)—that is, they embed analytics, data, and reasoning into the overall decision-making process of the organization. These are organizations that are transforming to streamline decision-making across all business functions and creating an insight-first culture; i.e., no decision is made without data-driven insight. At level 5, analytics is used across all business units in an integrated fashion.

 

An IDO, the most mature of the states, relies on five fundamental pillars that need to be in place and informed by an overarching analytics strategy. These are:

 
1.        People: An ecosystem with the required competencies to deliver analytics insight in a timely manner.
2.       Strategy: A clear direction and mandate at the corporate strategy level to guide and prioritize analytics transformation.
3.       Process: A robust and accepted process across the analytics ecosystem to:
a.        Capture and certify the quality of data
b.       Certify the production of reliable insight
c.        Act on insight in an appropriate manner
d.       Measure, refine, and pivot strategic and tactical priorities
4.       Data: The use of internal and open structured and unstructured data to generate new ideas and insight.
5.       Technology: The use of traditional and new big data architectures and appliances across an ecosystem of suppliers, including those onsite, and digital applications to generate and distribute insight and collect new data.

 

Deloitte adapted the IDO framework into a survey that was fielded among 200 senior analytics professionals in organizations across North America. For the purposes of this survey, we used the following definition of business analytics: 

The pace and complexity of business is ever-increasing and finding new areas of growth, efficiency, or competitiveness means ensuring that the right people have access to the right information and the right insight at the right time to make the right decisions across the organization. For these insights to be discovered, businesses and public sector bodies need to appropriately process and protect their own data at the same time as taking advantage of data that is external to their organization.

The key results of this survey are outlined below.

 

I. Does analytics maturity matter?

 

The central question we sought to answer was whether or not there is a demonstrable impact to the bottom line by embracing analytics. To measure this, we asked respondents to identify if they felt their organization had met or exceeded their corporate goals in the past 12 months (we defined corporate goals in terms of financial targets, expanded product/service offerings, or overall size). Our analysis revealed that organizations that are analytically mature are significantly more likely to have exceeded their corporate goals in the past 12 months than less mature ones. Canadian organizations have begun to welcome this notion, as our results found that business analytics is identified as their most important business priority over the next few years.

 

II. Analytics maturity is not just about data and technology

 

Organizations were asked to rate their maturity on each of the five pillars by assessing their overall development on five or six attributes for each pillar, for a total of 28. The results of this exercise allowed for a correlation analysis to determine which attributes have the highest impact in terms of driving overall analytics maturity. While it is true attributes related to data and technology are key considerations, the number-one attribute in our assessment is related to strategy. Having a formal analytics strategy in place across the organization was determined to have the most impact. Moreover, more than half of the top 15 attributes were under the pillars of stage, process, or people.

 

III. Purple teams are key to achieving success

 

People is one of the key pillars of the IDO framework and one that is often overlooked. Deloitte has found that part of the reason for people being less valued is that often organizations are not hiring the right teams to work in this field. In our view, success hinges on organizational ability to create purple teams—those that combine technically savvy people (red skills) with seasoned business communicators (blue skills) to deliver business insights. Simply stated, organizations that try to win at analytics by hiring predominantly red talent—data scientists, quants, technology architects—are doomed to failure. It has now become eminently clear that blue people—change managers, political navigators, subject matter experts—are required to promote a culture that embraces analytics insight to actively drive decision-making.

 

 

“While it is true attributes related to data and technology are key considerations, the number-one attribute in our assessment is related to strategy. Having a formal analytics strategy in place across the organization was determined to have the most impact.”

 

IV. Canada lags behind the US

 

One impetus for conducting this study was to understand the development of organizations in Canada compared to those in the United States (later this year, the IDO survey will be given in other jurisdictions to broaden our understanding of how our organizations measure up to those of other countries).

We developed an index score based on the five pillars to create the IDO Index, which is used to understand the relative differences in development across industry and country. Our analysis reveals that only one in 20 Canadian organizations consider themselves to be an IDO, whereas 17 percent of US organizations make such a claim. 

Canadian organizations fall behind their US counterparts across all five of the pillars; the gap is widest in those of technology and process. Encouragingly, the smallest gap between the two countries is in strategy. Given the importance of this pillar in terms of driving analytics maturity overall, we expect Canadian organizations should be able to close the gap, assuming the other pillars continue to be supported. 

 

 

V. Public sector: a steeper path to navigate

 

Using the IDO index, we were able to take a category-level view of analytics maturity. While a relatively small number of organizations classified as public administration were included in the sample frame, we are able to provide a number of directional findings about the public sector overall:

  • The overall score for public administration lags behind most other sectors in Canada; public administrators score an average of 78 on the IDO index (100 is average).
  • The pillars of technology and process are the least developed overall for this sector.
  • The people pillar is also well below average, suggesting the notion of purple people may need to be developed at many public sector organizations.

 

VI. Next steps

 

The transition towards becoming an Insight Driven Organization is a bold one. It requires a change in mindset, one that encompasses all five building blocks: strategy, people, process, data, and technology. 

It is critical that an organization seeking to become an IDO has both an aspiration for its analytics vision and is cognizant of its current state. Once agreed, launching small pilot projects to take the organization on the journey towards that aspiration one step at a time is the key. Pilot projects allow organizations to generate proof points, evaluate performance, and, on occasion, fail quickly, iterate, and move forward with confidence and the lessons learned.

With appropriate metrics and feedback mechanisms, organizations can also adjust their analytics aspiration in real time, embedding an element of agility to ensure that both the value and impact of the analytics program is unlocked sooner for organizational success.

 

 

SHAK PARRAN is a partner in the Strategic Analytics and Modelling team at Deloitte with over 20 years of experience. As the leader of Deloitte’s public sector, health care and life science analytics team, Shak has broad knowledge in predictive analytics, optimization, analytics strategy and modelling.

JOHN MACLEOD is a Senior Manager in Deloitte Strategic Analytics & Modeling practice in Toronto.  John has over twenty years of market research experience, covering a broad range of topic areas including innovation and product development, retail customer experience/satisfaction and stakeholder management.

SWATHI SADAGOPAN is an analyst in the Deloitte Strategic Analytics and Modelling practice in Toronto. Swathi has served clients across multiple industries including retail, healthcare, and transportation with a focus on analyzing large datasets to derive meaningful and actionable insights.

 

Case Study

CIVIL ANALYTICS: HOW BIG DATA IS REDEFINING EVIDENCE-BASED DECISION-MAKING
DON LENIHAN & TOM PITFIELD, CANADA 2020

The Age of Big Data is upon us and with it comes huge opportunities to improve public decision-making. While these tools certainly will strengthen evidence-based decision-making, they will also usher in a new era in policymaking, based on expansive data sets, analytics, and open dialogue. Policymakers have relied on evidence-based decision-making for decades. Their approach rests on a traditional distinction between means and ends. Suppose a government is clear on a goal, but unclear on the best way to achieve it. It can use scientific methods to assess the different options and find the best means to the end.

Become a member today to continue reading...

Case Study

KANSAS CITY’S OPEN DATA INITIATIVES
PSD’S SLOANE SWEAZEY IN CONVERSATION WITH ERIC ROCHE, KANSAS CITY

Open data is quickly becoming a common feature of municipal government. In the present political climate, citizens demand that their governments are transparent and accountable, and open data is the most practical way of achieving that. Yet developing and implementing an open data program is a hefty endeavour. To learn how open data initiatives are created and implemented, PSD sat down with Eric Roche, the Chief Data Officer of Kansas City, MO – a municipal champion of open data initiatives – to learn how they have carried out such an expansive open data program so successfully.

 

Become a member today to continue reading...

Case Study

DATA: THE ENGINE OF SMARTER CITIES
LEAH HANVEY & HERMAN CHANDI, URBANLOGIQ

Cities across North America are grappling with the goal of becoming a world-leading smart city, and they are implementing dozens of strategies to do so. Each of these strategies is important in becoming a smart city: a city that is economically, environmentally, technologically, and socially advanced as an outcome of the widespread adoption of innovative technology and digital infrastructure. However, many cities are missing the value of one of their most powerful natural resources: data.

In fact, data has the potential to be the engine of smart city strategies, it just has to be utilized in the right way. Cities already generate a lot of data from everything that passes through their functions, touching everything from household incomes and demographics to businesses clusters, industrial zones, transportation patterns and development permits.

The City of Surrey’s traffic department alone produces over a gigabyte of traffic count data on average every month. Furthermore, this data – data that has been collected for years – is being enriched by a new proliferation of alternative sources of private data: IoT devices and infrastructure, mobile phones, and even social media.

Aggregating these datasets can give valuable insights into how people interact with their cities. With the technologies available today, such as artificial intelligence and data science, cities could push every boundary that exists in delivering comprehensive, real-time, and data-driven government-to-resident (G2R) services.

Imagine having the ability to predict the average unemployment rate of youth to the granularity of a square city block, 15 years from now. How about layering traffic count data with weather projections, school day times, and social media engagements to accurately predict exactly where and when accidents will happen before they even happen?

Artificial intelligence has opened up worlds inconceivable until now and it has the potential to change the way cities operate forever. The problem is the way cities collect data today funnels it deep into government silos. As a result, public officials struggle with simply accessing data and IT departments are overburdened with requests. Despite its power and potential, data has become a cumbersome exercise, leaving public servants ill-equipped to carry out the demands of their job.

Like many municipal governments, the City of Surrey in British Columbia is finding it increasingly challenging to manage their ever-growing data inventory and continue to look for innovative solutions to do so. Driven by Surrey Mayor and Council’s goal of being an open and transparent City, Surrey has developed an open data program which not only enabled the City to share highly sought after data sets with the public, but also highlighted opportunities to mature their data management practices.

The City’s open data program created the perfect ecosystem to breed a use case that focused on layering existing datasets to build a crystallized vision of traffic and congestion patterns within city limits:

  • The goal: to better understand and accurately visualize how Surrey’s transportation network was being used.
  • The result: a prototype solution that provided the foundation for a new kind of startup; one seeking to eliminate those silos so that data could be more accessible and useful to public servants. That startup was UrbanLogiq.

Data is a tool that can be leveraged to achieve grand and ambitious smart city goals. However, it is important to be cognizant of looming challenges that could hamper efforts to execute a comprehensive data strategy.

 

"Aggregating these datasets can give valuable insights into how people interact with their cities. With the technologies available today, such as artificial intelligence and data science, cities could push every boundary that exists in delivering comprehensive, real-time, and data-driven government-to-resident (G2R) services."

 

I. Old Challenges are Preventing New Solutions

 

Data is fickle. It has the power to do incredible things but only if it is accessible, clean, and aggregated in the right way. Many private corporations tout the potential and benefits of data, all of which are equally available to government, but unfortunately, government can be handicapped by unique challenges that prevent them from capitalizing on their data resources.

Data access: Leveraging existing resources

For governments, access to existing data can be a huge challenge. Governments, often confined by tight budgets and constrained resources, use out of date methods to collect data and once they acquire it, it is stored in incompatible formats (e.g., paper, PDF, SQL databases, proprietary vendor databases to name a few).

Variations in data format can create more silos that obstruct information sharing and prevent public officials from utilizing their own data to its full potential. Some cities find it can be too costly to access old datasets and may resort to re-collecting data that could otherwise be at their fingertips.

Data infrastructure: Building the right environment

Of course, we know it is not always so simple. Secure storage and management of large datasets requires substantial investment in data infrastructure such as servers or cloud storage. The Brookings Institution’s , “Modernizing government’s approach to transportation + land use data” report from July 2017 argues that:

 

"The secure storage and management of large data sets require substantial investment in the necessary data infrastructure such as servers/cloud storage. However, many agencies demonstrate conservative approaches to hardware and software, holding on to current products longer than private sector peers and acting more risk averse to testing new products."

 

Conservative approaches create a risk aversion cycle within governments - the longer governments cling to old technologies, the less likely they are to adopt new ones. Technology adoption should be synonymous with “little bit and often”. With this approach, cities will start to see more significant returns on capital investment and innovation will become a core value of organizational culture.

Data sources: Scoping perfect urban intelligence

There has been a proliferation of data sources from new technologies, which can have a major positive impact on urban planning. Valuable data is generated not by city interactions alone but also external datasets, which includes but is not limited to zoning and land use data, large events, social media engagements, demographic growth, weather, and car accidents. When layered, internal and external datasets can give a comprehensive understanding of a city’s patterns of behaviors and engagements, or in other words, it can give cities perfect urban intelligence.

One of the prerequisites for having quality internal and external data is maintaining robust collection methods. All data collection technology is not created equal and mass technology adoption is not necessarily the solution to all problems. In fact, over-correcting from no technologies to many can cause even more problems, chief among them: it can reinforce government data silos. Technology adoption should be woven into a city’s long-term strategic plan and priority should be given to products that support cross-department information sharing and compatibility across multiple city functions.

Data strategy: Diving in

While the task might seem daunting, the technology to aggregate, store, analyze, and visualize city data exists today. Here are some good questions to consider before diving into decision-making.

This process will involve trial and error, but that is how innovation happens. The process of trying new technologies and practices is integral to reaping innovation’s benefits and making it a core organizational value.

 

II. The City of Surrey: The Champion for Open Data

 

The City of Surrey in British Columbia has been a pioneer of smart city strategies in the Canadian context. A relatively young city faced with unprecedented population growth and booming development, Surrey realized that it must continue to innovate in order to remain a competitive place for people to live and work. A suburb of Metro Vancouver, Surrey has a large proportion of its population commuting to the downtown core every day – a number that is steadily growing. As a result, a pain point began to emerge: low visibility on overly congested roadways. The solution would be hidden in their data.

Surrey’s open data portal launched with 300 datasets in September 2014 and with its launch came 21 specified objectives and an established governance policy. Since then, Surrey has garnered numerous awards as the number one rated municipal program in B.C. for 2015 - 2017, one of the top five cities in Canada for open data according to Public Sector Digest, and just last year, Surrey was named the winner of the Canadian Open Data Excellence Award and Open Data for Democracy Award at the 2016 Canadian Open Data Summit.

Today, Surrey has one of the largest municipal catalogues in Canada with public access to over 350 datasets and near real-time access to data to support developer apps and map visualizations through APIs (application program interfaces). Surrey has achieved success for all 21 of the specified objectives which included: to support the Smart Surrey Strategy, to increase the efficiency and productivity of staff, and to use technology in innovative ways.

Surrey’s approach to open data was a launching pad. The organizational culture and built environment that encouraged innovative practices for data allowed for a city-wide openness to new technologies, and even more importantly, a city-wide shift in how Surrey framed its problems to encourage innovative solutions.

UrbanLogiq was one of the outcomes to this way of thinking. UrbanLogiq was able to utilize Surrey’s open datasets to create a platform that could enhance Surrey’s approach to urban planning. UrbanLogiq knew that traffic congestion costs residents and the City hundreds of thousands of dollars every year in time and money. They also knew Surrey, like many other cities across North America, has a growing population and has to support more and more cars, trucks, and bicycles on their roads every day. The concept to create a tool that gave single window visibility to Surrey’s entire network of traffic would help the City better manage current flows in real time, and it would help them access the data that would help make even better informed long-term planning decisions. Per Bill McKay, GIS Manager at the City of Surrey,

                                                                                  

"Having the ability to analyze and consider multiple data sources, particularly those that are near real-time, in one application significantly improves staff ability to make sound decisions that affect all aspects of our transportation network. UrbanLogiq has developed a tool that will be used by the City well into the future and illustrates how sharing data can benefit an organization in new and unexpected ways."

 

Combining urban planning datasets and then applying machine learning algorithms will fundamentally change urban and community planning. The approach pioneered by the City of Surrey demonstrates that cities are encouraged to internally lay the foundation for successful technology private-public partnerships to bring data innovation to government. 

 

LEAH HANVEY is Business Development manager for UrbanLogiq, a data analytics platform for urban planners and municipal governments. With extensive experience in government and politics, Leah has worked for the Government of Canada as policy advisor to a federal cabinet minister of Innovation, Science and Economic Development Canada. Leah also has worked in corporate finance advisory services for a Big Four firm, city-level economic development, and political campaigns. Leah is a graduate of the Gustavson School of Business at the University of Victoria.

HERMAN CHANDI is a Co-Founder of UrbanLogiq, a data analytics platform for urban planners and municipal governments. With extensive experience in starting and building software companies, Herman brings insights into product development and user needs for public servants. Herman is also a Chartered Professional Accountant and has worked in accounting and advisory services.

URBANLOGIQ unlocks the value of data trapped in government silos to make urban planning faster, cheaper and more efficient. We do this by aggregating government data from across departments, adding external information sources and applying machine learning analytics to automate city workflows and provide actionable urban planning intelligence. Today, UrbanLogiq offers intelligence solutions for traffic, economic development, and urban planning departments.

 

Case Study

OPEN DATA AND ITS IMPACT
BETH NOVECK & ANDREW YOUNG, THE GOVLAB

In 1983, the U.S. Government gave the public access to the data signal from the Global Positioning System (GPS), originally developed by the Department of Defense. In 2007, they made that commitment permanent. Over the past 20 years, GPS technology has led to a proliferation of innovative commercial applications across industries and sectors, including agriculture, construction, transportation, aerospace and – especially with the increased use of portable devices – for everyday life. In addition to creating new efficiencies and reducing operating costs, the adoption of GPS technology has improved safety, emergency response times and environmental quality.

Become a member today to continue reading...

Case Study

OPEN SOURCE, OPEN DATA AND OPEN GOVERNMENT
TARA HOLLAND, SAS CANADA

Data journalist Nate Silver is perhaps best known by the general public for his success at predicting U.S. election results based on statistical data. But his background is in sabermetrics—the statistical analysis of Major League Baseball. Baseball provides a fertile field for such analytics. The box score, invented in the late 1800s, records every statistical point of every single at bat, and is a format ripe for digitizing. Silver leveraged this vast pool of information to create PECOTA, an empirical system for forecasting the performance of pro baseball players. Silver sold PECOTA to Baseball Prospectus, which now markets the product for fantasy baseball leagues, and his 538 blog is licensed by the New York Times.

Become a member today to continue reading...

Case Study

Letter from the Editor
Tyler Sutton, Editor-in-Chief

TAX & SPEND

Social media in politics, changing demographics, and the rise of populist movements are just a few of the mega trends contributing to the swell of anti-government spending rhetoric around the world. Calls for tax cuts and reducing wasteful government expenditures are amplified by Twitter and by boisterous world (and local) leaders.

Balancing fiscal prudence with strategic public investments is an important endeavour – one that is buoyed by the ongoing constructive debate between the “right” and the “left.” Unfortunately, this discussion is often soured by the simplification of public service delivery as the “spending” of taxpayer money. The statement “tax & spend” leads one to believe that the purpose of taxation is solely to provide governments with the ability to buy things – staff time, tangible capital assets and so on. Really, the purpose of taxation (along with other forms of government revenue generation) should be to pool resources for strategic long-term public investment: Tax & Invest. After all, the goal of public service delivery is not to spend money, but rather to invest in outcomes.

For public servants operating at all levels of government, navigating the murky waters of partisan politics, limited capacity, and constrained fiscal resources makes strategic financial management that much more elusive. This issue of the Public Sector Digest features case studies, best practices and insights meant to facilitate long-term financial decision-making in the public sector, despite the many impediments.    

For the municipal finance manager of a small community – trying to keep up with legislative requirements while meeting the demands of city council – Trevor Pinn of the Town of Parry Sound offers tangible recommendations in his piece: Municipal Financial Policies Aren’t Just for the Big Guys. For the finance officer of a major state or provincial government – looking for innovative solutions to the intractable challenges of a fiscally-strapped government – I recommend the latest editorial submission from the Government Finance Officers Association (GFOA) entitled A New Approach to Financial Sustainability. Finally, for those hoping for a brighter future in municipal finance, Trent University’s Harry Kitchen and PSD’s Stefanie Fisher both explore current debates and opportunities in introducing new sources of revenue for local government.

As we approach elections in 2018 across several jurisdictions and levels of government, it will be imperative that government finance officers lay a foundation now for sound fiscal management. Regardless of whether incoming elected representatives campaign on tightening up government expenditures or making strategic investments in new programming, a strong framework for long-term financial planning will help build continuity and sustainability in public sector organizations. 

 
Tyler Sutton, Editor-in-Chief
Public Sector Digest 
 

 

|

Case Study

COMMUNICATING MUNICIPAL ASSET MANAGEMENT
ALEKS DZINTARS, PSD RESEARCH

A strong municipal asset management program requires the support and buy-in of multiple departments, senior management and city council. Furthermore, the broader community must be aware of the role asset management plays in supporting strategic long-term decisions regarding infrastructure investments. PSD is now assisting communities with asset management community engagement and internal communications efforts.

Together with our team of researchers, policy analysts, and former municipal executives, municipalities will have the opportunity to build a coherent and informed engagement and communications strategy meant specifically for communicating asset management to relevant stakeholders. PSD will work with your municipality to develop and execute engagement exercises to determine the level of awareness of asset management among council, staff and the community. Following the engagement process, PSD will assist your municipality in designing and delivering tailored presentations, workshops and tools to help address identified gaps in asset management communications competencies.

PSD Asset Management Communications Activities

  • Development and execution of asset management community engagement workshops
  • Development and execution of asset management council presentation and/or workshop
  • Assessment of asset management communications competencies with recommendations

Contact us to learn how we can assist your municipality with your asset management communications efforts. 

Aleks Dzintars, Research Analyst

E: adzintars [at] publicsectordigest [dot] com   T: 519.690.2565 x 2719   

 

Case Study

BE A SMART ASH: DENVER PREPARES RESIDENTS TO BATTLE EMERALD ASH BORER
SARA DAVIS, CITY OF DENVER

By combining big data, ash trees and a city government hell-bent on winning the attention of its residents, the Denver City Forester has encouraged residents to embrace their inner Smart Ash. The Be A Smart Ash movement - an unexpectedly irreverent, city-driven, five-year campaign launched in 2016 – has rallied citizens to protect Denver’s ash trees from the Emerald Ash Borer (EAB). The goal? To encourage residents to be smart about their ashes — take action, identify ash trees and (when necessary) treat or replace them.

 

 

“One in six trees in the city and county of Denver is an ash tree, so it’s vital that residents understand how they can save their ash trees and protect the city’s urban forest.”

 

Become a member today to continue reading...

Case Study

RISKY SECURITIES: BILL 68 AND EXPANDED MUNICIPAL INVESTMENT
ALEKS DZINTARS, PSD RESEARCH

Infrastructure funding is a serious challenge for many municipalities in Canada. Even with the benefits of taxes, rates, and supplementary programs like the Federal Gas Tax Fund (GTF), many communities have a sizeable infrastructure gap to reckon with. Since the emergence of the importance of asset management, municipalities are realizing the burden of both funding new capital projects and maintaining existing infrastructure. Simply put, the majority of these communities lack the sufficient funding to narrow and close their infrastructure deficits.

In Ontario, lawmakers are proposing legal amendments to provide another lever to help municipalities fund their infrastructure.

 

I.  New Investment Legislation

 

Become a member today to continue reading...

Case Study

MANITOBA TAKES INNOVATIVE STEP FORWARD WITH NEW SOCIAL IMPACT BOND STRATEGY
HON. SCOTT FIELDING, MANITOBA MINISTER OF FAMILIES

The province of Manitoba is facing many challenges in addressing problems affecting our most vulnerable citizens. Our government is interested in taking innovative approaches to solving those complex social issues.

Under the previous NDP administration, Manitoba’s debt doubled in eight years. Yet the increase in spending failed to deliver meaningful progress on persistent social problems. Statistically, Manitoba continuously ranks among Canada’s highest rates of violent crime, child poverty and the highest rate of children in government care. We strongly believe that government needs to think outside the box about evidence-based initiatives that will provide real results for the Manitobans who need it most.

(For a complete audiobook version of this article, please visit our Digest Audiobook page)

Manitoba has the highest rate of children in care in the country at more than 11,000 children as of March 2017. That number increased by 87 percent over the past decade. The child welfare budget exceeded $514 million in 2016/17, an expense that has become uncontrollable as the number of children in care continues to increase year over year without positive outcomes. 

We know that far too often, current social programs measure the number of people they serve instead of how well the program addresses the problem that created its need. As a government, we want to start addressing the underlying causes of social issues, rather than waiting to react to issues after they become a crisis.  We believe the best way to accomplish this goal is through innovative social financing strategies that bring more money and resources to prevention and early intervention initiatives, as opposed to crisis management. One way we plan to do so is through the implementation and use of Social Impact Bonds (SIBs).

SIBs are social financing mechanisms that attract more money to address social issues through partnership with community, non-profit organizations and the private sector. Governments enter into agreements with organizations who wish to deliver a social program focused on prevention, as well as investors who are willing to pay for the operating costs and delivery of pre-defined social outcomes.

SIBs encourage partnership with government to deliver prevention programs designed by experts and front-line service organizations. The government sets a specific outcome to achieve in collaboration with service providers, secures private investment and repays investors only if the service provider meets the project’s outcome. These types of arrangements focus more on outcomes and successful programs through effective measurement.

By creating a new channel for philanthropy, we hope to help solve costly, complex social issues and benefit the broader community. SIBs are a new tool to tap into Manitoba’s potential to find creative solutions and foster new business, social and community partnerships.

SIBs find a way to use private capital for the public good. While traditional government programs may be funded regardless of whether they are working, SIB projects would only receive tax dollars based on success. This type of innovation will give Manitobans better value for their money and provide an efficient addition to current funding, not a replacement.

If outcomes are achieved, government proceeds with payments to investors. Those can range from basic repayment to market-beating returns. These payments generally reflect the level of government savings that the program was able to create.

Our goal is to have better long-term outcomes for vulnerable citizens through an approach centred on prevention and a focus on high-cost, historically-challenging issues.

We recognize the adoption of SIBs requires a major change in the way government does business. This includes a shift from tracking activity to reporting outcome. It requires the formation of new partnerships that cut across the philanthropic, investment and social sectors. The success of future SIBs must also involve education and increased capacity among service providers.

There are more than 200 Social Impact Bonds world-wide and some in use in Canada. In Saskatchewan, a successful partnership created the Sweet Dreams support home for single mothers, which has already shown important results. The provincial government, Conexus Credit Union, EGADZ Saskatoon Downtown Youth Centre and a private donor partnered on the project, which is expected to save the province up to $1.5 million over five years by reducing the number of children in government care. By 2019, Sweet Dreams aims to teach 22 children and their mothers the necessary skills to move into the community and stay together as a family unit for at least six months. The payment scale stipulates if 17 to 21 children remain out of foster care, investors will receive repayment plus five percent interest. They will not be reimbursed if fewer than 17 children stay with their mothers.

The Heart and Stroke Foundation partnered with the Public Health Agency of Canada in 2017 to launch a $4 million Community Hypertension Prevention Initiative. Its goal is to enroll 7,000 pre-hypertensive Canadians in a six-month program to teach healthy behaviour and control blood pressure. Eleven investors are on board, a mix of corporations, charitable foundations and individuals. Upon successful completion, investors will be paid principal and 6.7 percent interest.

The Progressive Conservative Party of Manitoba first introduced the SIB concept in 2015 as a proposal to improve outcomes of front-line social services through innovative financing options for non-profit groups. The concept became a component of the 2016 provincial election campaign.

Once elected, Premier Brian Pallister mandated his Minister of Justice and Minister of Families to find new ways to reduce and mitigate social issues through the implementation of SIBs. The departments of Health and Education have also met with stakeholders to discuss opportunities for SIBs. Implementation could occur in the areas such as of recidivism, at-risk families, green initiatives and Indigenous skills training. The premier established a caucus working group to assist and make recommendations to ministers and caucus to find opportunities to use SIBs.

 

“We know that far too often, current social programs measure the number of people they serve instead of how well the program addresses the problem that created its need. As a government, we want to start addressing the underlying causes of social issues, rather than waiting to react to issues after they become a crisis.” 

 

As a government, we have done our homework. After carefully studying examples around the world, we took a major step in July 2017 towards the launch of our first SIB. As Minister of Families, I announced the posting of a Request for Proposals for a consultant to help create a made-in-Manitoba approach to fund social programs.

In the months ahead, we will hire an intermediary to connect organizations such as service providers, non-profits and charities with investors that could range from community foundations to major financial institutions.

We will welcome the intermediary’s help to lay the groundwork for a solid plan our government will eventually assume and operate. We see this as a smart spending plan several years in the making here in Manitoba that will have a meaningful impact on the lives of vulnerable citizens.

Our plan will have professionals lead and teach government officials best practices and design and deliver a landmark Social Impact Bond in the coming months, as well as issue a call for proposals for many more SIBs.

Our government knows this new strategy must recognize existing challenges and acknowledge lessons learned in the past. We must consider the unique characteristics of our communities and leverage professional expertise to ensure that Manitoba gets SIBs right.

Rather than accepting the status quo, we are embracing this exciting work to make Manitoba the most improved province in social innovation. We anticipate a strong plan that ensures SIBs deliver positive, long-term benefits that serve Manitobans in need and strengthen our communities. 

 

SCOTT FIELDING is Manitoba’s Minister of Families and Member of the Legislative Assembly for Kirkfield Park in west Winnipeg. He graduated from the University of Manitoba with an advanced bachelor of arts in economics and political studies and served as a Winnipeg city councillor, where he chaired the finance committee and Winnipeg Police Board. 

 

Case Study

MIND THE GAP: ONTARIO’S INFRASTRUCTURE DEFICIT
PSD’S STEFANIE FISHER IN CONVERSATION WITH LYNN DOLLIN, AMO PRESIDENT

As the infrastructure gap is becoming increasingly apparent, so too is the need for an effective solution. At the 2016 Association of Municipalities Ontario (AMO) conference, members were tasked with just this, coming up with a solution to an issue affecting every Ontario municipality. However, when they presented their proposal for a 1 percent HST increase dedicated to municipal infrastructure at the 2017 AMO conference in Ottawa, they were met with overwhelming “no’s” from provincial party leaders. PSD sat down with Lynn Dollin, President of AMO and Deputy Mayor of the Town of Innisfil, to discuss the proposed HST increase and the future of infrastructure planning in Ontario. 

 

Last year the Premier had asked AMO to come up with ideas for alternative municipal revenue tools that would help Ontario's communities with their funding gaps. What options did you explore? Was there a consensus on your board and among AMO members to focus in on the 1 percent HST increase dedicated to municipal infrastructure? 

Yes, we did have consensus on our board. However, before that we spent a lot of time – most of the year – discussing several options (there were over forty of them). All of that material – the discussion papers, background studies, etc. – are publicly available and they talk about all of the options we considered, including the status quo, which is just to do nothing. We looked at all the options based on a set of criteria. We not only had the board look at it, but also an expert group that consisted of people from municipal finance organizations, a retired TD bank analyst, and a wide range of individuals with varying expertise. We did this because we had to come up with a problem statement and figure out just how big the infrastructure gap was. Because we all now have asset management plans – because it is a requirement of the province – we were able to put a better figure on just what that gap was.

So, we have to look at closing that infrastructure gap, as well as all that work that we have on the books but have deferred because property taxes are so high. But we also have to look at our operating costs – the fact that they are increasing as well. We have heard a lot about hydro costs this year – municipalities are huge energy consumers. Our water and wastewater plants and pumping stations are a good example. These all require a lot of energy, even when we retrofit with our LED and all of those energy saving measures. So, we have that cost increase, coupled with government legislation, or what we like to call “the unfunded mandate,” which are all the costs to municipalities that come from new legislative requirements.

First, we had the problem statement. Then we looked at a set of criteria to judge every option. We then narrowed it down from there to around seven options. Following this, we did our first round of polling with Nik Nanos to look at where the public was on these issues. Once we made the decision on increasing the HST by 1 percent, we went out to each of our members and provided them with a short executive summary with the work that we had done, along with a guesstimate of what it would mean for them. We did this because one of the questions that the board had struggled with from the very beginning was “what does a 1 percent increase mean for my specific Ontario municipality?”

We sent out an individualized letter to each AMO member, so they were able to read all of the material, and fill out a survey and send it back. We had a fairly positive response. We also wrote to the three party leaders around the end of May, informing them that we are having this conversation with our members. We said we would really like it if they would resist the urge to jump into the discussion at this time, so that we can have a discussion with our own members first. During that time, we also went to about thirty or forty different areas of the province and spoke with senior staff and elected officials, both about the problem statement and what the proposal was, as well to conduct two more rounds of polling.

A lot of work went into this but I do think there is more that needs to be done. And, regardless of what the opinion is of the three leaders, we have said that this is our option going forward. If you don’t like our option, and you have a better idea, we would love to hear it.

 

“People don’t understand who does what – that education is a provincial responsibility and that fire is a local responsibility. But when they start talking about that and then start looking at the numbers and realize that municipalities are the biggest owners of infrastructure, and are only getting 9% of the tax revenue, I don’t think anyone can say that there is a balance there.”  

 

When you presented the plan for a 1 percent HST increase, were you expecting to hear “no” from each of the party leaders?

I have been in municipal politics for twenty-three years, so I didn’t expect that we were going to get a big high five this close to an election. I know that with other big asks that AMO has had (the Federal Gas Tax being a good example), it didn’t happen overnight. I think realistically everyone knows that this is not going to happen quickly, and that there has to be more discussion. Based on how the leaders answered the questions during their interviews, I don’t think they have actually read all of the material in depth. Not that I am suggesting that they will change their minds before June, but we need more than just ‘no.’

We know the gravity of where we are right now. We have done the homework, we’ve talked to our members, and we have to talk to our members more. There were a lot of members who just hadn’t seen it or read it yet, and quite frankly I get it. We are inundated with material every day, and sometimes some of it doesn’t get the attention it deserves. We hope that by having this conversation – and now that everybody is talking about it – that we can get some good feedback. We are having such a great discussion. I was speaking with one of the servers at the conference, and he had watched the discussion on the big screen while he was working. We had a twenty-minute conversation about what a regressive tax is, and he felt that wealthier people got away without paying enough income tax. I think that if you can get everybody talking about it, that is already a huge win for us.

People don’t understand who does what – that education is a provincial responsibility and that fire is a local responsibility. But when they start talking about that and then start looking at the numbers and realize that municipalities are the biggest owners of infrastructure, and are only getting 9 percent of the tax revenue, I don’t think anyone can say that there is a balance there.  

Now that you have received this feedback from party leaders, are you planning on still going ahead with the proposal as planned? Or, are you planning to try a different strategy?

We don’t have a plan B; the plan is that the ball is now in their court. You asked us to come up with an idea that we think will work. We have done that - if you don’t like that, then what is your plan? That is currently where we stand. We have a board meeting at the end of September, and that will be the first time we regroup since the conference, and it will be interesting to get everybody’s feedback. But as far as I can tell through emails, social media, phone calls, etc., the board is still steadfast in moving forward with this proposal, and laying it at the feet of the leaders, and saying if you’re going to stomp on it, you better have something good or better to offer us.

 

Municipalities in other provinces have shown interest in having something like an HST increase adopted, as they are also struggling with funding infrastructure needs. Have you been in contact with FCM or any other provincial associations to discuss a united front?

As President of AMO, I sit on a group that has all of the provincial and territorial association leaders. We meet four times a year, and the last time was in June. At that time, we did present the group with a copy of our executive summary and the work that we had done on the proposal. We have not formally requested that we do anything across Canada for several reasons. One of the main reasons is that what each province and territory is responsible for is very different. For example, we are the only province in the country that is responsible for affordable housing. In Nunavut, there is only one community that has property taxes – they work mostly on grants. Each province and territory is just so different, and I think it would be difficult to adjust [this proposal] to fit across the country, and to get everyone on board, especially because some of them already have something in place. We are happy to share information, and I think that certainly the other provinces and territories are watching us, waiting to see how we make out. But, at this point we think that it has to be a made-in-Ontario solution. Getting 444 municipalities or 3,300 elected officials to agree on something is enough of a challenge, especially when you have such diversity; some municipal governments in Ontario employ over 1,000 people and some only employ 1 person.

 

“Everyone can point to a need within their municipality and something that they have been waiting for.”

 

Would the 1 percent increase in HST alleviate some of the pressure to increase property tax at the local level or will there still be a need for an increase? 

That is definitely why the proposal was put forward in the first place. In order to close the gap, collectively we would have to double property taxes in the next ten years. And, certainly there are a number of reasons why that is not a good idea. One of them is that households are shrinking. You have the same property but less people are in it, particularly in Northern Ontario. You also have assessment growth, or in my case, seasonal properties and lakeshore making the assessment so much higher than it would be if it wasn’t on the shore. So, property tax is more of a regressive tax.

The other good thing about HST as opposed to property tax is that the HST would allow you to build in protection for low-income Ontarians, which property tax does not. We already pay some of the highest property tax in Canada. I am constantly hearing about people in my municipality who are going to have to sell their homes because it is two people in their household who are retired, and they have owned the home for 50 years and the property tax is now more than what they paid for the house. They can’t stay there anymore because they are on a fixed income. There would be protection for those people under HST. Plus, visitors pay HST, whereas currently visitors don’t pay for any municipal infrastructure. These are a number of good reasons.

The key to what we were asking, and it is how we laid it out in the polling, was we asked if people were supportive of a 1 percent increase on HST dedicated to municipal infrastructure, and that was the important question. If you did the same polling, and asked what do you think about a 1 percent increase that will go into general provincial funds, it got next to no support – something like 20 percent. But as soon as you said the words municipal infrastructure, the poll bumped up to close to 70 percent. The reason is because they read the news, they see the flooding and the pot holes in the road. They are clamouring for a new sidewalk or this or that to be fixed. Everyone can point to a need within their municipality and something that they have been waiting for. I think it resonates with people because it supports municipal infrastructure.

We even supported that property taxes would still rise to the rate of inflation – this isn’t about trying to get a zero percent property tax increase. We are trying to accelerate infrastructure work that is on the books but hasn’t been affordable, while keeping property taxes at the rate of inflation. And, even with the HST increase, we figure that it would raise about $2.5 billion, which is only half of the gap. So, it wouldn’t stop municipalities from looking for further efficiencies and making sure that they are stretching every dollar. But it would go a long way with allowing municipalities to get going on things that they have been postponing for years just because of fiscal restraints.

 

STEFANIE FISHER received her honour’s bachelor’s degree from King’s University College at Western University in Political Science and her master’s degree from the Norman Paterson School of International Affairs at Carleton University. Previously, Stefanie has worked as a research assistant, contributing to several different projects, including one on the Futures of Terrorism. In addition, as a part of her master’s research she looked at municipal critical infrastructure and the different regional infrastructure funding programs such as the Ontario Gas Tax Fund.    

 

 

Case Study

IMPLICATIONS OF THE WANNACRY CYBER ATTACK FOR THE PUBLIC SERVICE
GRIFF JAMES, DAMROD ANALYSIS

May 2017 saw the United Kingdom’s National Health Service (NHS) struck down by an indiscriminate cyber-attack dubbed WannaCry. The ransomware exploited vulnerabilities in outdated information technology (IT) infrastructure and software to lock down over 70,000 computers, forcing the world’s fifth-largest employer to operate on pen and paper. In the immediate wake of WannaCry came Petya, a data-destroying attack disguised as ransomware. These far reaching attacks were preceded by many more, including the detailed and sophisticated Bank of Bangladesh heist of 2016, in which hackers made off with $81 million. Cyberspace is heating up, driven by increasing technological prowess and global instability. 

Become a member today to continue reading...

Case Study

A NEW APPROACH TO FINANCIAL SUSTAINABILITY
SHAYNE KAVANAGH, GFOA

Up until now, the efforts of local government practitioners and researchers to promote financial sustainability have tended to emphasize technical measures, such as longer-term forecasting, better financial management policies, and strategic budgeting methods. Certainly, these are important, but a body of Nobel Prize winning economic research called “common pool resource theory” posits that sustainable decision-making systems comprise an interrelated system of leadership strategies and institutional designs. In this article, we will describe how the Government Finance Officers Association (GFOA) has translated common pool resource theory into a practical set of tools and techniques for local government.

Become a member today to continue reading...

Case Study

FINANCING CANADIAN CITIES: IT IS TIME TO DIVERSIFY REVENUES
HARRY KITCHEN, TRENT UNIVERSITY

Never have Canada’s largest cities faced so much uncertainty when it comes to future fiscal sustainability. Changing demographics, increasing income inequality, growing social service needs, deteriorating infrastructure, the impact of climate change and federal immigration policies will push municipal expenditure needs well beyond anything experienced in the recent past. When this is combined with a revenue base that is largely controlled by provincial legislation and has remained virtually unchanged for decades (user fees and property taxes being the mainstay), concerns over financing services and fiscal sustainability are becoming a major concern.

Become a member today to continue reading...

Case Study

REFLECTION ON U.S. STATE TAXATION TRENDS IN 2017
RYAN MANESS, MULTISTATE ASSOCIATES

At the beginning of 2017, many tax policy prognosticators thought this could be a banner year for tax reform. Thirty-one states[1] were facing budget deficits, a record number of states were under unified Republican control, most states would be crafting their budgets, and federal tax reform was the talk of Washington, D.C. Change seemed to be in the air and many speculated that this could be the year that states really shook up their tax policies.

 

Become a member today to continue reading...

Case Study

MUNICIPAL FINANCIAL POLICIES AREN’T JUST FOR THE BIG GUYS
TREVOR PINN, TOWN OF PARRY SOUND

Continuous policy development is integral for a governance structure that can adapt to changing political and regulatory environments. While it may not be entirely misconceived that too many rules and regulations weigh governments down, governments of all sizes must still critically reflect upon their own existing policies and their shortcomings. In a policy climate where municipal governments face high retirement rates and succession challenges, greater demand for transparency and accountability, as well as significant funding challenges, the implementation of comprehensive financial policies is critical. Evaluating its own financial policies – recognizing policies that were needed and those that needed to be re-crafted – the Town of Parry Sound improved its budget process to be more sustainable, consistent and efficient.

(For a complete audiobook version of this article, please visit our Digest Audiobook page)

 

I. Why We Need Policies

 

Having existing policies in place is critical to ensuring transfer of knowledge from one generation to the next. With a significant number of municipal staff retiring in the next five years, it is important for municipalities to start documenting policies so that they can continue operations with minimal impact and loss of knowledge, ensuring uniformity between generations. Usually there is not a long overlap between the retiring staff and the replacement staff, if there is any overlap at all. This issue is heightened in smaller municipalities where one person may equate to 25 percent or more of a government department. Larger cities, on the other hand, often have some redundancies where a single person leaving does not take all of the knowledge of the operations of the department.

Similarly, policies provide for consistency in how the municipality operates and handles situations. This ensures that all ratepayers and stakeholders are treated equally and provides staff with support to use in situations when customers have discrepancies. Not only does this ensure consistency from customer to customer, but also for the same customer from time to time. For example, if a policy dictates that interest is charged monthly, then a customer knows to expect that interest is charged each month and that it is not charged periodically or on a different schedule from one year to the next. In smaller municipalities where everybody knows everybody, treating customers inequitably or inconsistently becomes instantly and widely known throughout the municipality.

In the present environment, residents demand that their local governments are transparent and open and the development and publication of municipal financial policies provides a level of transparency. By documenting and sharing your policies you provide to your ratepayers, there is increased accountability to use taxpayer funds responsibly. Knowing how their tax dollars are being used provides a level of comfort to residents. For this reason, the Town of Parry Sound has a separate webpage to publicly provide all of its financial policies.

Finally, policies provide for long-term decision making. Policies that are designed with sustainability in mind improve financial decision making. Policies also mitigate the chance that short term “wins” that are not beneficial in the longer term (for example zero percent tax increases) occur. In smaller municipalities, where $20,000 to $100,000 is a 1 percent tax hike, every dollar counts and the importance of sound financial management is even more important (arguably) than in larger municipalities where $20,000 is not noticed.

 

II. Key Policies to Have

 

One of the first policies that we adopted in Parry Sound when I started was an Operating Surplus and Deficit Policy.  This policy outlined how year-end surpluses (or deficits) would be allocated to reserves at the end of the year. Prior to this, the surplus was used to offset the next year’s budget. The downside with this approach is that it delays the development of the budget as you are waiting for the audit to be completed.  By allocating surpluses, (our policy puts 30 percent to each of a rate stabilization reserve and a capital replacement reserve fund as well as 10 percent to a capital contingency reserve and 30 percent is discretionary) there are built in contributions to capital reserves for future years.  This also makes the following year’s budget easier as we budget based on known reserve balances rather than waiting to see how the surplus works out.

 

“… policies provide for consistency in how the municipality operates and handles situations. This ensures that all ratepayers and stakeholders are treated equally and provides staff with support to use in situations when customers have discrepancies. Not only does this ensure consistency from customer to customer, but also for the same customer from time to time.”

 

Another key policy that has improved our budget process is the development of a Budget and Financial Controls Policy.  A key area of this policy is the establishment of the target tax levy increase. The range tries to tie an inflationary index (we use CPI, however other indices may be used) as well as our known wage increases to the annual levy increase. This ensures that the levy (our first version used “tax rate” however with the varying impacts of assessments shifts this proved to be unsustainable) increases with the cost of providing services to residents. Since the adoption of this policy we have been able to reduce the budget process to one overview meeting and two deliberation meetings. We have also gone to Council both years with a proposed budget within the target range which improves efficiency during the deliberation process.  The policy also outlines a rating system that is used to prioritize capital and operating requests, improving consistency as well as allowing the most important projects to be included in the budget. Since 2014, the Town has reduced the budget process from April to the first week in February, in part due to the policy as well as improvements to the budget document.

Policies tend to be interrelated and require periodic review to ensure there is a consistent message.  The Town’s Reserve and Reserve Fund Policy sets target ranges for balances of the Town’s reserves and reserve funds. These targets periodically need to be reviewed in order to meet the strategic plan requirements, but also operational changes as well.  The Town’s reserve and reserve fund policy came out of a review of our reserves which had almost 100 different active reserves. These have been significantly reduced. The policy outlines requirements for how and when reserves and reserve funds are established, as well as requiring that each reserve has a stated purpose.

Other policies that we have created since 2014 include: Debt Management and Capital Financing, Donation Revenue, Tax Collections, Accounts Receivable Collections and Asset Management.  The Town also reviewed and modernized its Investment and Procurement policies.

 

III. Don’t Recreate the Wheel

 

For small municipalities, the idea of having multiple policies may seem daunting given the resources that are in place to create them. However, often you don’t have to “recreate the wheel” when it comes to financial policies. An internet search, phone call, or email is often sufficient to get a copy of another municipality’s policies. Many policies have core components that will be the same for every town or city, however each policy should be tailored to the individual needs of the municipality. Drafting a new policy can be daunting, but using examples helps with the majority of the policies and allows those who don’t have policy departments to focus on the local tailoring.

As mentioned earlier, a policy cannot be something that sits on the shelf. In a world of ongoing changes and increased focus on asset management, policies affect one another and need to be adjusted in order to all be focused on the same goals. If your capital financing plan requires that certain assets must be funded through Pay-As-You-Go, it would make sense that your reserves policy has target levels which ensure that there will be sufficient funding available (e.g. don’t have a target level for fleet replacement reserves of one-year replacement if you are trying to save for a ladder truck over 20 years).

At the same time, a sustainable plan should not be something that is constantly changing. Changes should be strategic and make sense for the municipality’s long term financial planning goals and philosophies.

 

IV. Conclusion

 

Financial policies are important to municipalities of all sizes because they provide for consistent dealing of stakeholders and situations, providing for transparent and predictable decision making. Documented policies also ensure a transfer of knowledge when staff change.

Finally, financial policies don’t have to be thought up from scratch; there are many available resources that can assist in the foundation of a policy for your municipality. Between the internet, municipal associations, research groups and personal contacts, a good policy is not hard to find and adapt to your municipality.

 

TREVOR PINN is a Chartered Professional Accountant (CPA, CA) and Director of Finance and POA Court Services for the Town of Parry Sound, ON.  Trevor has been with the Town of Parry Sound since February 2014, prior to that he spent 5 years in public practice where he has a background in business valuation and municipal auditing.  Trevor has presented to the Federation of Northern Ontario Municipalities and the Municipal Finance Officers’ Association on improving municipal budget processes.

 

Case Study

FOOD FOR THOUGHT: IMPLEMENTING A FOOD INITIATIVE IN YOUR MUNICIPALITY
SLOANE SWEAZEY, PSD RESEARCH

Food is increasingly becoming a critical concern in an era overwhelmed by climate change, population growth, and rising obesity rates. Ensuring that citizens have access to adequate and nutritious food is a core responsibility of municipalities. After all, food is fundamental to the wellbeing of residents, and residents are central to municipal policy planning.

Become a member today to continue reading...

Case Study

HOW THE CITY OF CHARLOTTE IS ACCELERATING MINORITY-OWNED BUSINESSES
BRITTANY VAN DEN BRINK, PSD RESEARCH

The Citi Foundation and Living Cities has selected the City of Charlotte, North Carolina to participate in the City Accelerator for Procurement for Inclusive Economic Opportunity. In addition to a $100,000 grant, the City of Charlotte will receive a combination of coaching, technical assistance and implementation resources.

 

“Our City leadership is dedicated to economic development and ensuring that all citizens have equal opportunities, and they are very open to exploring creative options to increase economic mobility. We have been working toward this goal for many years, and the assistance that the City Accelerator provides will help us to expedite the process.”

 

Become a member today to continue reading...

Case Study

REBUILDING THE FAMILY: WESTCHESTER COUNTY’S R.E.A.L. PARENTING PROGRAM
BRITTANY VAN DEN BRINK, PSD RESEARCH

Westchester County, New York is taking a new, refreshing approach to collecting child support from non-custodial parents – usually fathers – who are behind on child support payments. The R.E.A.L. (Responsible. Employed. Active. Loving.) Parenting pilot program was launched in April 2016 to simultaneously help low-income, unemployed fathers who have difficulty meeting their child support obligations become self-sufficient and actively participate in their children’s lives.

 

"We need to take a different approach because this country has spent trillions of dollars on the so-called war on poverty, with results that have failed. So, we can continue to pour money down a hole without actually fixing the program, even though people’s lives are at stake, or we can take a new, humanistic approach.”

 
Rob Astorino, County Executive

 

I. The R.E.A.L. Parenting Pilot Program

 

The R.E.A.L. Parenting program is a 10-week program that meets twice a week to teach parenting, employment, and life skills. If participants successfully complete the program, the arrears they owe to the county government will be reduced by 25 percent. The program also provides job search assistance, and if gainful employment is maintained for 90 days, another 25 percent reduction is applied. Finally, if participants pay their child support in full for at least a year, outstanding debt is reduced to $500.

This incentive-based approach is key to the program’s success, according to the county’s Commissioner of Social Services Kevin McGuire. “Everyone talks about dead beat dads who don’t pay their child support,” said McGuire. “But my experience is that many of these dads are simply dead broke – they just don’t have a job. They would happily pay if they could, so we wanted to find a way to incentivize that.”

However, the program is a far cry from a giveaway. Program participants must work together with county officials to meet certain milestones. They have to participate and begin paying their child support going forward. If they do so, nearly all their debt will be forgiven if they are in fact fully and actively meeting the program’s requirements.

The arrears range anywhere from $2500 to well over $80,000. Some of the fathers who participated in the program owed so much in arrears that they had little incentive to work because more than 80 percent of their take-home would go to child support. The program therefore represents a light at the end of the tunnel, incentivizing fathers to gain the necessary skills to get back on their feet and reunite with their children.

But the R.E.A.L. Parenting pilot is much more than a debt forgiveness program. It helps fathers become involved in the lives of their children, of which the benefits are many. Not only is the family unit strengthened, but by helping to bring families together, there are less incidents of child maltreatment, children are less likely to get into trouble with the law, they’re more likely to stay in school, and they are less likely to have children out of wedlock.

County Executive Rob Astorino pointed out that the United States has continually tried and failed to address such social issues. According to Astorino, continuing to cut welfare checks is not the solution. Instead, the R.E.A.L. Parenting program addresses the root issues. For one, program participants articulate time and again that they often lost hope because debt continues to pile up and they saw no way out.

“We wanted to address that,” said Astorino. “In these classes, my eyes were opened because fathers are obviously there because they care. They want to get back on their feet and be in their children’s lives.” Accordingly, rather than continuing to hand out welfare checks every other week, the program teaches participants new skills and helps them become productive members of society – reuniting families in the meantime.

 

II. Successes to Date    

     

So far, the pilot program has been hugely successful. Of the 25 volunteer participants, nearly three-quarters will have their debt reduced. While 12 have completed the classroom component but have not yet met the program’s employment and child support requirements, another five are on track to have their debt reduced to $500, as they have met all three milestones.

Deputy Commissioner of Social Services, Joe Kenner, said that each of the program’s participants are on public assistance. Addressing obstacles to employment was the initial hurdle. “Preparing them for the workplace was the first step. The second step is finding them sustainable employment, so they can start providing for themselves, as well as provide child support to the custodial parent and their child(ren).” Once the first two items are adequately addressed, the fathers are on their way to becoming self-sufficient and contributing to society. Therefore, the county is aided by addressing some of the administrative problems it faces with arrearages, while also affecting families in very deep ways.

In fact, many of the men who have successfully completed the classes continue to attend, simply because the program has turned into a kind of peer support group. Some even bring their children and their children’s custodial parent. Essentially, there are a wide range of resources available even after the program is completed. The program is part of a larger initiative that the county has taken in recognizing the role of fathers in the lives of children.

Given the positive outcomes to date, the program could be expanded throughout the state. For other cities and counties outside New York State looking to implement a similar initiative, McGuire suggests “doing your homework,” by ensuring there is sound research to support the proposed initiative. Additionally, he pointed out that the U.S. federal government allows such programs to move forward, but many states do not take advantage of them. Finally, the family court system has been a critical partner for Westchester County when, say, a father needs a petition revised, ultimately helping him reintegrate with his family. Therefore, exploring which resources and partnerships are available is key.

While finances are certainly a concern of the R.E.A.L. Parenting program, it is, more importantly, a way to strengthen families, which Westchester County officials recognize as the building blocks of society. Participant fathers want to get back on their feet and be involved in the lives of their kids. At its core, the program helps participants help themselves, resulting in a self-sufficient citizenry and families who are reunited because struggling fathers are given a second chance. 

 

BRITTANY VAN DEN BRINK is a Research Analyst for Public Sector Digest. She received her honor's bachelor degree from the University of Western Ontario in 2012 and her master's degree in Political Science from the University of Windsor in 2014. Beginning September 2016, Brittany rejoined Western's Political Science department to complete her PhD in local government. She can be reached at bvandenbrink [at] publicsectordigest [dot] com