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Municipal Performance MeasuresCorporate Services ~'d = p b f ! p`' 5 °_.! ,~ e. Inter-Department Memorandum Niagara,Falls TO: Mayor and Members of City Council DATE: October 22, 2007 FROM: Ken Burden Acting Executive Director of Corporate Services RE: Municipal Performance Measures On September 24, 2007, Staff presented report F-2007-34 Municipal Performance Measures. The discussion of Council focused on the purpose and usefulness of the information. Staff commented that the report was a provincial requirement and described the difficulties in preparing the report for Council's information. City Council approved the following motion: "That the Province be asked to comment on the collection of the MPMP data and its applicability." Staff checked the information resources relating to the Council's motion and found the latest issue of the Provincial handbook on municipal performance measures. Please find attached, the 2007 issue of the Province of Ontario Municipal Performance Measurement Program Handbook, which is produced by the Ministry of Municipal Affairs and Housing. Also, please note a new section of the handbook which introduces the Municipal Information & Data Analysis System (MIDAS). Also attached is an article printed in the October 2007 issue of Municipal World that further announces MIDAS. Staff was first made aware of MIDAS earlier this year through Marco Melia, the Municipal Advisor with the Ministry of Municipal Affairs and Housing. As none of the information sessions were near the City, the City of Niagara Falls offered to host an additional session for the Niagara Region. On July 25/07, approximately 20 attendees from across the Region, along with City staff, participated in a MIDAS Information Session. Finance Staff is evaluating this tool to improve the usefulness of the annual MPMP report. Staff is also surveying municipalities to learn their presentation techniques that could improve the understanding of the performance measures, and to inquire how other municipal staff are using the MIDAS program. As Council is keenly interested in Municipal Performance Measures, the CAO has directed Finance Staff to prepare afollow-up report to the Council that provides an improved presentation of data. Staff will use MIDAS, a web based tool developed in partnership between AMO and the Province that allows municipal staff to query, view and analyse their MPMP and FIR data and run comparative reports between groups of municipalities. The MIDAS program and the municipal survey will enable Staff to prepare an informative and understandable report on the City's municipal performance measures. cc. John MacDonald, Chief Administrative Officer Ed Dujlovic, Executive Director of Community Services Dean lorfida, Director of Council Services and City Clerk performance measurement THE "MIDAS" TOUCH ti~ ~"® ~° r~ ® ®r Nancy Plumridge and Bohdan Wynnycky Municipal staff and members of council are always looking for ways to improve the delivery of municipal ser- vices to residents through a more effec- tive and strategic use of financial and performance measurement data. How many times have you considered how your costs and performance in a service area have changed over time, and how they compare to other municipalities? sh'Ips" program, have jointly devel- oped the Municipal Information and Data Analysis System (MIDAS). MIDAS is a powerful web-based query and analysis tool that will al- low any municipal staff member to access the data compiled in the Prov- ince of Ontario's Financial Informa- tion Return (FIR) system, including the Municipal Performance Measure- Moreover, they will not require a high level of technical expertise to do so -MIDAS is user-friendly and easy to use. And, most importantly, they will not have to spend money to gain access -access to MIDAS will be free of charge. Assuming a computer with standard web browser software and an Internet connection is avail- able, all a municipality needs is a With the click of a mouse, staff and elected officials can query and report on statistical, financial and operational data, examine their historical records, and make comparisons with peer municipalities using standard and established performance measures and indicators. As a response to the growing de- sire to access more financial and per- formance measurement information, the Association of Municipalities of Ontario (AMO) and the Ministry of Municipal Affairs and Housing (MMAH), with funding assistance from the Ministry of Finance's (MOF) "Strengthening Our Partner- ment Program (MPMP) data.l With user name and password, and they are the click of a mouse, staff and elected ready to start reporting.2 officials can query and report on this statistical, financial and operational data, examine their own historical re- cords, and browse and make compari- sons with their peer municipalities using standard and established perfor- mance measures and indicators. Why Compare? Comparisons are integral to any form of performance management Bohdan Wynnycky joined the Ontario Government in 1990 and has since worked in several ministries, most recently Municipal Affairs and Housing. He is Program Manager for Ontario's Municipal Performance Measurement Program,.in- volved in the ongoing development of performance measures with various profes- sional municipal associations. Nancy Plumridge is the Director of Administration and Business Development for the Association of Municipalities of Ontario, President of Local Authority Services Ltd., and Executive Treasurer of the Rural Ontario Municipal Association. MPMP is a mandatory program, established in 2000, which requires municipalities to collect and publicly report on a prescribed set of performance measures in 12 different service areas. For a more detailed descrip- tion of the program and its requirements, see: <www.mah.gov.on.ca/Page314.aspx>. To set up a MIDAS account, email Deborah Hannah at <dhannah@amo.on.ca>, or call (416) 971-9856 x 310. Municipal World OCTOBER 2007 27 and analysis system. MIDAS allows three basic forms of comparison: year-over-year analysis of a particu- lar municipality's results; compari- son of a particular set of results to those of other municipalities; or comparison to aggregated statistics. While many municipalities regu- larly practice their own year-over-year comparison, the act of comparing their own FIR and MPMP results to others has not 1 been explored by everyone. ` In the past, some municipalities had expressed concern that im- proper data comparisons by the me- dia or politicians would make it more challenging for municipal staff to highlight any unique condi- tions that could explain the variabil- ity among performance results.3 However, as familiarity with perfor- mance measurement grows, this concern is replaced by a desire to benchmark and compare. Consultations with municipal user groups reveal an overwhelming inter- est in allowing comparison between municipalities. Thus, to facilitate meaningful information/knowledge exchange between and amongst mu- nicipalities, MIDAS must enable, not restrict, the ability to compare. Users will decide the level of comparison and which of their peers qualify as "fair" comparators. MIDAS will allow notes that form ~ part of the municipality's FIR sub- mission to be easily extracted and turned into a report. If more clarifica- tion is needed, FIR and MPMP in- structions for individual performance measures can also be accessed and downloaded. Finally, municipalities will be encouraged to link to the On- tario Centre for Municipal Best Prac- tices (OCMBP) to learn how munici- palities with superior efficiency and effectiveness results are delivering service. 28 OCTOBER 2007 Municipal World Background MIDAS began as a response to the desire of many municipalities to be able to browse and compare their own MPMP results with those of other municipalities. Municipalities invest a lot of energy in gathering and re- porting FIR and MPMP data, so it is only natural they would be interested in using this information in a more strategic and effective manner. For example, many municipal of- ficials are being asked to show their results in comparison to their peers, to identify trends and provide sup- porting data to council or their bud- get committees. Sometimes, they gather FIR and performance mea- surement data in the course of a ser- vice delivery review. Historically, 3 By limiting access to municipalities, provin- cial ministries and professional associations, it is felt that these concerns can be somewhat mitigated. however, for municipal staff in small and medium-sized municipali- ties, collecting and analyzing com- parative data has been laborious and expensive. If a municipality was in- terested in comparing its perfor- mance with the results in other mu- nicipalities, it had to contact those municipalities by phone, or visit in- dividual municipal websites and search for MPMP results. MIDAS responds to this legitimate demand for greater access to municipal fi- nancial and performance data, and the desire to conduct better analysis using this data. Highlights of MIDAS Key highlights of MIDAS include: - user-friendly and intuitive web-based query and analysis tool, requiring only browser software to use; - custom-built data management and analytical software solution with access to MPMP data from 2001 and FIR data from 2000 (access to this data is free to Ontario munici- palities); - database can be expanded in the future to include other data sources, although user fees may be introduced to access these en- hanced services; - separate database stores FIR and MPMP data in a geographic format so that results can be mapped; - access to standard/common reports for the FIR and MPMP data, in- cluding any explanatory notes; - custom reports that can be tailored to specific user needs, with que- ries/reports saved in user folders for repetitive use; - report results can be displayed in a numerical/tabular format and/or graphically, or geographically; - report results can be exported to Excel and other file formats; - report group statistics. can be se- lected for each variable in a report, eg. average, median, standard devi- ation; - group aggregate statistics can be generated, and these reports in- chide the functionality to drill down and identify results for indi- vidual municipalities; - reports for pairs of efficiency and effectiveness measures can be cre- ated, with results displayed in scat- ter graphs; - online help and other reference materials, including the instruc- tions for the FIR and MPMP schedules, are available on the website; ~~ MIDAS will operate in a secure en- vironment. Auser name and pass- word system will be managed by AMO; and -' •raw MIDAS data will be automati- cally refreshed regularly, so users can work with the latest figures. because municipal performance measures are reviewed annually and undergo changes, generating a trend report poses unique challenges. To address this issue, only those mea- sures in effect in the most recent year selected are available for inclusion in a MIDAS trend report. This rule means municipalities will not be able to create a trend report that contains measures not compara- ble because the formulas differ. As an example, the formula for operating costs was revised for the 2005 report- ing year. (Operating costs are used as the numerator for efficiency mea- sures, which are defined as cost per unit.) A trend report that includes a 2005 efficiency measure may include 2006 results, but not results for previ- ous years. Benefits MIDAS has been designed as a management tool for Ontario's mu- nicipalities and municipal organiza- tions. It promotes the strategic objec- tives of the provincial government and AMO: to support and enhance strong and effective municipal gov- ernment in Ontario. To ensure that MIDAS is used appropriately, munic- ipal users are required to state they agree to terms and conditions with every login. This includes agreeing to accountability provisions and a mu- nicipal data sharing protocol. MIDAS will enable municipal staff to generate timely reports that will help municipal managers evaluate service delivery and assist council and the budget committee in setting municipal priorities. More and more may be easier than you expected with a 1/adim/CarteGraph solution Municipal Finance Software Asset Management Full Work Management Ready for PS3150 Reporting Optional Real-time Integration One Powerful Partnership CarteGraph V Better Government . . sot :war a Municipal World OCTOBER 2007 29 municipalities are using performance data in their strategic planning exer- of better municipal service deliv- ery. cases. MIDAS benefits the municipal sector Conclusion in the following ways: - timely reports on performance measurement and financial data in the FIR; MIDAS addresses the challenges of accessing and analyzing munici- pal financial and performance mea- surement data. It provides munici- - comparisons have the potential to palities with auser-friendly, foster dialogue between municipal- web-based query and analysis tool ities; - trend data makes it possible to identify variances and investigate results; and - better data contributes to the goal presenting information in straight- forward spreadsheet reports with supporting graphs. It is a powerful tool that allows management to identify internal Four decades of excellencre in infrastructure planning fr engineering ^ inlet' GROUP BARRIE (705) 726-3371 BELLEVILLE _ (613) 966-4243 ~ COLLINGWOOD (705) 445-3451 OTTAWA (613) 822-7052 , www.ainleygroup.com -, ~ „- , Civil /Municipal Land Development ~ ~_ Transportation j,L.Richards Environmental ENGINEERS ARCHRECTS~PIANNERS Solid Waste Management OTTAW7+ Urban & Regional Planning 613-728-3571 Geographic Information Systems 61315 4S1 Oa Mechanical suosuaY Electrical 705-522-8174 Structural 705-3 OM899 Architecture NORTH BAY Project Management 705-495-7597 SULLIVAN, MAHONEY LLP t Barristers and Solicitors MUNICIPAL, PLANNING AND ENVIRONMENTAL LAW SECTION V.F. Muratori T.A. Richardson W.B. McKaig M.J. Bonomi S.J. Premi R. Vacca J.P. Maloney S.E. Wells ~ 40 Queen Street, Box 1360, St. Catharines, ON L2R 6Z2 Telephone (905) 688-6655 Fax (905) 688-5814 4782 Portage Road, Niagara Falls, ON L2E 661 Telephone (905) 357 0500 Fax (905) 357 0501 ~ trends and make comparisons with other municipalities, with reports that can be used by both municipal man- agers and council. MIDAS also im- proves the ability of smaller munici- palities to access individual perfor- mance measurement results and place them in a proper context. To sum it up, MIDAS facilitates ac- cess to, and analysis of, valuable mu- nicipal information, which is crucial to improving services and the reporting and decision-making processes for all municipalities. ~.4 bh' ~ MALONE GIVEN PARSONS LTD..:: •Urban&Regional~Planning ~~~~ ,aor3enfre~ - ~..,- , ~,~ •MasCer Plannin g nn,~kh~m,o ~ ~ ' ~ T90S,S130 ,~ Market & Economic Analysis. : F.eoS. ' " •Geographic Information West 2~4u r ~ i sezrz ~~ Systems , ~ ~ ~ •Project Management ~,~- ~ ~ ~ ~ ' •Economic&Touri~,m ~ »~pca~r~ P~"~•` Development •Urban Design: _ ;~~~~.',~,~ ~~,,,~ ,~~"`~,.~°`® Ontario Municipal Human Resources Association . Represents over 250 members and 135 organizations in Ontario. . Provides leadership and direction on Human Resources issues. . Networking opportunities with other HR professionals to exchange information. . Municipal voice on emerging HR legislation, policies and programs. . Relevant education and training opportunities, and professional development for HR practitioners. For information on becoming a ' , - 1 ~~IHRA member or a sponsor of OMHRA, visit our website. W W W.omh~a.Ca 30 OCTOBER 2007 Municipal World 3. ..- 1$a ~ - ~ - - _- -- _ _ ~ , -_ !F_ E a i N; ,` 3F __ - __ t #I _ L ~ ~ E A ~ ,_ F i i~k - - - f - .Cr:.; i' ) g£a = ~ - - _ _ _ - -- ., r~ .:. _ 1 ~~ - - - ~ ~~ ,~~~ m ,. 't `r st ~ _. ~ ~, t MYH e: ~t/s~ a ~r !z ~ z k' ~ ~_~ ~ J ~ it r~ t ~. - xS ~~~ I ~ ~ ~ ~y _ t . l ~ I 3 p~ r-, ,,}~F ~, t ~" '~' ' ~` fl r x '- `, ~ ~ ) ~ ~ E fi+ f ~~ ~ ~ r.wi~di~`~y'' ~ ~ 3'at ~ ~~ `~' ~ s.~ q° ~'yc"""'~ aa~ -'.'~ ,j' ~ t 3 xI~ i ' K~ ~ t~ t ~ 1 } ~~ .~i y ~`i f = r 4 I - ,~: r ~ Y~E J- - - - ,,',i it a.~, .~ r ., _.. _....._~.~u.. >.vn._.,v.. ~. i..~.,u.:.lAF ra..~ .. Y'.. ~ ..q.) - _ ~-, ~.s.t1.Ar~ _. _ .'. ,Eller ....~ .,ni1G. ..c.J,_ _3.<:'.r.' `S _ ~ Y ~ ~ A ,....~ { Tl s ~~~ ~ ~ < i ~ "ir ~r~~ ~ sir i x. ~.z e ~ ~ r ^~ ~, ~ a ~: ! ~ „gyp ~ 4' l , a ~~ ;i ~ ~_r~' + '~r ~~r ~ ~ ~ y a" a ' ~ V i Vim _ .. C _} ~ 1 - ~ _ _ ~ ~~C~~ ~ t~ l j ~' 4 ~ ~"~ ~ h, ~ ~ -- tea. T ~ 1 ~ Y~~~ K i ~ f 5~ ~ ~ _j a+k•"'~jl ~ "i"ii R ~.~~ ~~ ~ s . ~ ~'~`~ _~ _ _ - --s _ ~ Y r Y ,cv ~ ~ t f ~i t F _ ti y" jr, 161`. ~ .., .. _ `~ v 4,r.--.s ... ~ -- - -_ -. 1. T~ - _ ..:. H A N D B O Q K Municipal T /~ Program Issued by Ministry of Municipal Affairs and Housing 2007 ~- ~_-~, . ~~~ 3 „+S v ~~~$~ {{ , ~ ~rT r_ * s-7 I~ ~;~ . Y' ~ i ~, ~ ~ t ., t 4. _ ':4; " ig 3 ;3 ~_ r -a i~.r yi 3 ~_-, ~~; >~ ,.....+ ~i S. ~~~ ] 3 ~.. ~'; ~~ E_ .f ~ ~ ;~ ;. 5 ~` ~~~ ~. u ~t ~:. ~, , ;. ~ .~..; This handbook is an advisory guide that provides information for reporting municipal performance measures only. The handbook may not account for particular or local facts or circumstances, and it reflects laws and practices that are subject to change. Accordingly, this guide should not be relied on as a substitute for legal or professional advice, and the user is responsible for how the handbook may be used or applied. Every year the minister writes to municipalities, informing them of the formal requirements of the program, including a list of performance measures. Municipal performance measures are authorized under the Municipal Act, 2001. The minister's letter to municipalities and the annual list of performance measures is posted on the ministry's web-site at wwwmah.gov.on.ca under the heading: Municipal Performance Measurement Program. Municipal Performance Measurement Program ~ ~ ,'.r Contents `: Part 1 -The Municipal Performance ~~ Measurement Program ~` L Introduction to Performance Measurement ......................... 4 Why is Performance Measurement Important to Municipalities? ............. 5 Performance Measurement in Action .................................. 6 ll. What is the Municipal Performance Measurement Program (MPMP)? ... 7 Program Requirements for Municipalities ............................... 8 Measuring Operating Costs ......................................... 14 Implementing the Program ......................................... 14 Indirect Costs ...................................................15 Reporting to Taxpayers ............................................16 Sharing Performance Measurement Results ............................. 18 Ontario Centre for Municipal Best Practices ............................ 19 Ill. Making Sense of Performance Measurement Information .......... 20 Analyzing Results ................................................21 Municipal Information & Data Analysis System ......................... 23 Summary .......................................................24 e Part 2 -Developing Customized Performance Measures 1. How to Develop Customized Performance Measures ............... 25 Defining the Service Mission ....................................... 25 Stating the Key Results the Service is Trying to Accomplish ................ 26 Selecting Performance Measures for the Desired Results ................... 28 ll. Benefits of Performance Measurement for Municipalities ........... 30 Helping Municipalities ............................................ 30 Linking Performance Measures and Budgeting .......................... 30 Contacts Municipal Services Offices .......................................... 32 Municipal Performance Measurement Program Part 1 -The Municipal Performance Measurement Program Tn 2000, Ontario municipalities began participating in a new program of performance measurement -the first comprehensive program of its kind in North America. Specifically, municipalities are now required to provide the Ministry of Municipal Affairs and Housing with performance measurement information annually, and then report performance results to their taxpayers. This handbook is meant to provide municipalities with information about the program. Part 1 of the handbook explains the concept of performance measurement and describes the steps municipalities can take to implement the Municipal Performance Measurement Program (MPMP). Part 2 details how municipalities can further develop their own comprehensive performance measurement systems. 1. Introduction to Performance Measurement uring each winter from 1985 to 1993, the former Regional Municipality of Ottawa-Carleton experienced frost penetration that averaged 180 centimetres and handled about 200 frozen water services (frozen water in the pipes, which cuts off the water flow). But in 1993-94, the weather was extremely cold. Frost penetrated to almost 200 centimetres, and the region reported 2,344 frozen services. The water supply to thousands of residents -one of them the prime minister -was disrupted. To thaw the frozen services, the region incurred almost $2.2 million in unanticipated spending and issued 7,000 notices to run water to prevent further damage. In response, the region developed a performance measurement and monitoring system, which measured the occurrence of frozen services, the occurrence of run-water notices, the cost of thawing frozen services, revenue loss, population affected, etc. This system allowed the region to predict when and where frozen services would occur. This prediction, in turn, allowed the region to give its residents selective warnings to run water. It also enabled the region to prioritize its capital program for replacing water pipes. The region experienced another severe winter in 1995-96. Thanks largely to its performance measurement system, only 94 frozen services occurred that year, and the region issued just 1,500 notices to run water. The bottom line is that cost was reduced, revenue loss was avoided and service was maintained to residents. Performance measurement and monitoring had done its job. The goals for local governments, on behalf of taxpayers, should always be to provide the best and safest services at the most efficient cost, with clear accountability. One ~ way to ensure these goals is through the use of performance measurement. 1 ,; :._ Municipal Performance Measurement Program Why is Performance Measurement Important #or Municipalities? ~~unicipal decision-makers want to be efficient and deliver value for local services. Taxpayers need to know how their tax dollars are spent and how their services compare both year-to-year and in relation to others. Governments choose to use performance measurement for four main reasons. Figure 1: Benefits of Performance Measurement ~3 ~~ `~~ `Municipal Performance Measurement =Quality { Service r 1. Performance measurement strengthens accountability. Government today is very complex, so it is important that elected officials and public servants inform taxpayers what the government plans to achieve, what it is actually accomplishing and what public services cost. With this information, taxpayers can make informed decisions about the level of services they desire. This notion of accountability is fundamental to our form of government. Measuring performance and setting targets effectively establishes an understanding between municipal staff and council, under which all parties develop a clearer understanding of the expected results or standards for each service area. The result is a shared accountability framework between staff and council, which benefits everyone. It helps focus council's decision-making and helps municipal staff understand the level and type of service delivery required. For the most part, municipalities already serve their taxpayers well, and that is something the public has a right to know. Performance measurement demonstrates to taxpayers how they are being served and the value they are receiving for their tax dollars. 2. Measurement helps improve performance. Sports teams track scores and important performance statistics to make the changes they need to win. People who own IZRSI's follow how their portfolios are performing 5 Municipal Performance Measurement Program ~ ~ and adjust their investments to ensure adequate retirement income. Businesses monitor costs, production, customer satisfaction and profit to stay in business, earn reasonable rates of return and report results to their shareholders. It is the same in government. Government programs exist to provide services and improve the quality ~ of life. Performance measurement identifies ways for municipalities to provide high-quality, efficient and effective services. 3. Performance measurement stimulates productivity and creativity. Performance measures can be used to create new incentives and rewards to stimulate staff creativity and productivity. A growing number of municipalities have pursued this approach, including Ajax, Brampton, Kingston and Owen Sound. In fact, many municipalities have been able to cut costs while maintaining or even improving service because they implemented the creative ideas of staff directly involved in service delivery. 4. Performance measurement improves budget processes. Performance measures can help municipalities develop budgets that are based on realistic costs and benefits, not just historical patterns. Performance measurement can also improve the monitoring of municipal budgets by measuring whether the budget and expected service levels are being met. Performance Measurement in Action Performance measurement is not new It has been in place for several years in different forms in many jurisdictions around the world. Every country i.n the Organization for Economic Cooperation and Development (OECD) has a policy at the national level supporting performance measurement. In the United States, the federal government and more than 30 states have legislated performance measurement for their departments and agencies. In Canada, the federal government, eight provinces and two territories have formal systems of performance measurement. Ontario is one of the leaders in this area. In the municipal sector, there are many examples of commitment to performance measurement. The municipalities of Calgary and Winnipeg in Canada, and Seattle and Sunnyvale in the United States, are well known for having adopted performance measurement systems. Smaller municipalities are also developing or have implemented performance measurement systems, including Maple Ridge in British Columbia, Grande Prairie in Alberta, Walnut Creek in California and Burnsville in Minnesota. In Ontario, many municipalities have been using forms of performance measurement for years. For example, the Ciry of Ottawa and the regional municipalities of York, Halton and Peel have active performance measurement programs, as have Toronto, Thunder Bay, Guelph and Burlington. Many other Ontario municipalities use elements of performance measurement by measuring work volume and the cost of maintaining services such as roads, water, sewers and parks. G ii.~~.z '~ r- Municipal Performance Measurement Program '~ ,,:` ,..,- ~; Ontario municipalities in rural and northern Ontario are involved in, or are exploring, opportunities for using performance measurement in their operations. Many municipalities ~ 3 include reviews or assessments of their results in their budget planning processes. ,; Ontario municipalities also share comparative performance data among themselves on an informal basis. A significant initiative in municipal service benchmarking has been led by a group of chief administrative officers from Ontario's upper-tier and single-tier municipalities. The Ontario Municipal CAO's Benchmarking Initiative (OMBI) has been instrumental in developing a new approach to benchmarking municipal performance in service delivery. Municipal associations such as the Ontario Good 1 Roads Association have also been very active in promoting the use of performance measurement as a management tool. The provincial government has made performance measurement a high priority. . Government ministries and agencies are required to develop and report performance ~ measures showing planned and actual results as part of the annual business planning cycle. The provincial government has worked with other parts of the public sector, such as school boards, hospitals and local housing authorities, to implement performance measurement. /l. What is the Municipal Performance Measurement Program (MPMP)? The Municipal Performance Measurement Program (MPMP) requires Ontario ~ municipalities to measure and report to taxpayers on their service delivery performance. MPMP currently consists of 54 performance measures in twelve core municipal service areas.l'he program involves a dynamic process of defining and refining measures that are relevant to municipalities and the public. The program will , benefit from the improvements and refinements that municipalities and others suggest. MPMP includes both efficiency and effectiveness measures. The services selected for the program meet the following criteria: • Reflect major expenditure areas for municipalities. • Reflect areas of provincial-municipal interest. • Reflect high. interest and value to the public. • Have data that is relatively easy to collect. - • Fall under municipal responsibility. l The charts on pages 8 to 13 summarize the performance measures for each service area, including the broad objective of each measure. l' 7 ~. 4, PART ~ Municipal Performance Measurement Program Program Requirements far Municipalities Tlie measures in MPMP are indicators of a municipality's performances in selected core service areas. No single measure can fully represent every activity associated with each of these service areas. Over time, and with feedback from municipalities and others, the province expects to add measures to reflect the full range of activities associated within each of the current set of municipal services. New service areas may also be added. Summary of Municipal Performance Measures 2DD5 Reporting Year ~;,~~ .~ ~ ,~, ~ ,tom is~ ~ a .. ....:.. ~.ts..~~... .....,~ .., ., , Local Government: Governance and Efficient municipal Efficiency Operating costs for corporate management government governance and corporate management as a percentage of total municipal operating costs. dire: Fire services Efficient fire services Efficiency Operating costs forfire services per $1,000 of assessment. Police: Police services Efficient police services Violent crime rate Property o-ime rate Total crime rate Youth crime rate Roadways: Paved roads Uripaved roads Safe communities Safe communities Safe commw~ities Safe communities Efficient maintenance of paved roads Efficient maintenance of unpaved roads Efficiency Operating costs for police services per household. Effectiveness Violent crime rate per 1,000 persons. Effectiveness Property crime rate per 1,000 persons. Effectiveness Total crime rate per 1,000 persons (Criminal Code offences, excluding traffic). Effectiveness Youths crime rate per 1,000 youths Efficiency Operating costs for paved (hard top} roads per lane kilometre. Efficiency Operating costs for unpaved (loose top) roads per Kane kilometre. 8 Winter rnaintenance of roacJv/ays Pavement condition Responseto winter storm events Transit: Conventional transit Municipal Performance Measurement Program PART 1 Efficient winter rnaintenance of roadways Pavement condition meets municipal objectives Appropriate response to 1Ninter storm events Efficient conventional transit Efficiency Conventional transit ridership Maximum utilization of conventional transit services Wastewater (Sanitary and Combined Sewage) Wastewater collection Wastewater treatment and disposal 1iVastewater collection, trcatrnent and disposal (Integrated System) Efficient municipal wastewater collection services Effectiveness Effectiveness Efficiency Effectiveness Efficiency Efficient municipal wastewater Efficiency treatment and disposal services Efficient municipal wastewater system (Integrated System) Wastewater main backups Municipal sewage management practices prevent environmental and human health hazards Efficiency Effectiveness Operating costs for winter maintenance of roadways per lane kilometre maintained in ~nnnter. Percentage of paved lane kilometres where the condition is rated as good to very good. Percentage of winter events where the response met or exceeded locally determined road maintenance standards, Operating costs for conventional transit per regular service passenger trip. Number of conventional transit passenger trips per person in the sen~ice area in a year. Operating costs for the collection of wastewater per kilometre of wastewater main. Operating costs for the treatment and disposal of wastewater per rnegalitre. Operating costs for the collection, treatment, and disposal of wastewater per megalitre (Integrated System). Number of wastewater main backups per 100 kilometres of wastewater main in a year. J PART 1 Municipal Performance Measurement Program R-.~_ , y ... .. ,~ Wastewater by-passes Municipal sewage Effectiveness Percentage of wastewater treatment management practices estimated to have prevent environmental by passed treatment. and human health hazards Storm Water Urban storm water Efficient urban storm Efficiency Operating costs for urban management water management storm water management (collection, treatment, disposal) per kilometre of drainage system. Rural storm wate~ Efficient rural storm Efficiency Operating costs for rural management water management storm water management (collection, treatr-nent and disposal) per kilometre of drainage system. Drinking Water Water treatment Efficient municipal water Efficiency Operating costs for the treatment services treatment of drinking water per megalitre. Water distribution Efficient municipal water Effidency Operating costs for the distribution services distribution of drinking water per kilometre of water distribution pipe, Water treatment and Efficient municipal water Efficiency Operating costs for the distribution system (Integrated System) treatment and distribution (Integrated System) of drinking water' per megalitre (Integrated System). Boil water advisories Water is safe and Effectiveness Weighted number of days meets local needs when a boil water advisory issued by the Ntedical Officer of Health, applicable to a municipal water supply, vvas in effect. UVater main breaks Improve system reliability Effectiveness Number of water main breaks per 100 kilometres of water distribution pipe in a year. 10 Municipal Performance Measurement Program PART 1 ~., r :~ ~-, 7~,. Solid Waste Management {Garbage}: Garbage collection Efficient municipal garbage Efficiency Operating costs for garbage collection services collection per tonne or per household. Garbage disposal Efficient municipal garbage Efficiency Operating costs for garbage disposal services disposal per tonne or per household. Solid waste diversion Efficient municipal solid Efficiency Operating costs for solid (Recycling) waste diversion services waste diversion (recycling) .per tonne or per household. Solid waste management Efficient solid Efficiency Average operating costs (Integrated System) .waste management for solid waste management (collection, disposal and diversion) per tonne or per household. Complaints -collection Improved collection Effectiveness Number of complaints of garbage and recycled of garbage and received in a year materials recycled materials concerning the collection of garbage and recycled materials per 1,000 households. Total number of solid vvaste Context for solid waste Effectiveness Total number of solid management sites owned by management facility waste management sites municipality compliance measure owned by the municipality with a Ministry of Environment Certificate of Approval. Solid waste management Municipal solid vvaste Effectiveness Number of days per year facility compliance facilities do not have when a Ministry of an adverse impact on Environment compliance environment order for remediation concerning an air or groundwater standard was in effect for a municipally owned solid waste management facility, by facility. Diversion of residential Municipal solid waste reduction Effectiveness Percentage of residential solid waste programs divert waste from solid waste diverted landfills and/or incinerators for recycling. 11 PART ~ Municipal Performance Measurement Program ~ ~ ~ _ ~ -~ Diversion of residential Municipal solid waste Effectiveness Percentage of residential solid waste (based on reduction programs divert solid ~niaste diverted for combined residential and waste from landfills and/or recycling (based on ICI tonnage) incinerators combined residential and ICI tonnage). Parks and Recreation: Parks Efficient operation of parks Efficiency Recreation programs Efficient operation of Efficiency recreation programs Recreation facilities Efficient operation of Efficiency recreation facilities Parks, recreation Efficient operation of Efficiency programs and parks, recreation programs recreation facilities and recreation facilities (Subtotal) Trails Trails provide recreation Effectiveness opportunities Open space Open space is adequate Effectiveness population Participant hours for Recreation programs serve Effectiveness reo~eation programs needs of residents Indoor recreation facilities Indoor recreation facility Effectiveness space is adequate for population Outdoor recreation Outdoor recreation facility Effectiveness facility space space is adequate for population Operating costs for parks per person. Operating costs for recreation programs per person. Operating costs for recreation facilities per person. Operating costs for parks, recreation programs and recreation facilities per person. Total kilometres of trails per 1,000 persons. Hectares of open space per 1,000 persons (municipally owned). Total participant hours for recreation programs per 1,000 persons. Square metres of indoor recreation facilities per 1,000 persons (municipally owned). Square metres of outdoor recreation facility space per 1,000 persons (municipally owned). 12 Municipal Performance Measurement Program PART 1 Library Services: Library services Efficient library services ~~ I4 Efficiency Operating costs for library services per person. Library services Efficient library services Efficiency Operating costs for library services per use. Library services Increased use of library Effectiveness Library uses per person. services Type of uses Eetter information on Effectiveness Electronic library uses as library usage a percentage of total library uses. Type of uses Better information Effectiveness Non-electronic on library usage library uses as a percentage of total library uses. ';'Land-Use Planning Location of new development New Lot creation is occurring in settlement areas Preservation of agricultural Preservation of land during the reporting year agricultural land Preservation of agricultural land relative to 2000 Change in number of .agricultural hectares during the reporting year Change in number of .agricultural hectares since 2000 Preservation of agricultural land Preservation of agricultural land Preservation of agricultural land Effectiveness Effectiveness Effectiveness Effectiveness Effectiveness Percentage of new lots, blocks and/or units with final approval which are located within settlement areas. Percentage of land designated for agricultural purposes which was not re-designated for other uses during the reporting year. Percentage of land designated for agricultural purposes which was not re-designated for other uses relative to the base year of 2000. Number of hectares of land originally designated for agricultural purposes which was re-designated for other uses during the reporting year. Number of hectares of land originally designated for agricultural purposes which was re-designated for other uses since January 1, 2000. 13 i....-. ' ~_ Municipal Performance Measurement Program '' Measuring Operating Costs ~'. Operating costs are used as the numerator for all efficiency measures in the Municipal Performance Measurement Program. The denominator consists of total units, such as households, tonnes or kilometres. The resulting efficiency measure represents unit cost. MPMP defines operating costs as selected categories of operating costs less revenue received from other municipalities. Subtracting revenue received from other j municipalities isolates expenditures pertaining to the reporting municipality. The operating cost categories used are: salaries, wages and employee benefits, materials, ~ contracted services, rents and financial expenses, external transfers, interfunctional adjustments and the allocation of general government -program support. Long-term debt charges and transfers to reserves and reserve fiords are not included in the numerator to ensure that the manner in which a municipality finances its capital projects does not affect performance measurement results. ' Note that user fees, provincial grants and other forms of revenue are not netted from operating costs because the MPMP efficiency measures are broad brush measures based on gross operating costs. Efficiency measures based on net operating costs would be less comparable since local governments differ on user fee policies, and provincial grants include unconditional grants which are used at the discretion of the municipality. For more information about operating costs please see the instructions to Schedule 91, Performance Measures: Efficiency, posted in I'DF format at: http: //oraweb. mah. gov, on. ca/fir/Welco me. htm. Implementing the Program erformance measurement data is collected through the annual Financial Plnformatlon Return (FIR). The FIR includes MPMP schedules for efficiency (Schedule 91) and effectiveness (Schedule 92). A schedule for notes (Schedule 93) allows municipalities to qualify their information and explain local conditions that may have influenced efficiency and effectiveness results. The FIR web-site also contains detailed instructions for completing MPMP Schedules in PDF format. Please see http://oraweb.mah.gov.on.ca/fir/Welcome.htm. Municipalities currently input cost and statistical data into the FIR schedules which are designed as Excel worksheets. Where the service area measured for MPMP purposes is defined in the same way as the FIR schedule for operating costs (Schedule 40), operating costs are automatically carried forward to the efficiency measure schedule (Schedule 91). Where the MPMP service area is snore narrowly defined, l4 t. Municipal Performance Measurement Program INDIRECT COSTS When h~1PMP was designed, the ministry recognised that the issue of indirect costs would need to be addressed to enable true comparisons between municipalities and to flcilitate year-over-year comparisons within a numicip~ilin~. For the first year of the program, Ontario municipalities tiverc instructed to allocate operating costs for general bo~Fernment m other functions using their choice of allocation method. At the request of municipalities, the ministry continued to etamine the. definitions of the .general government categories used in nc~ Financial Information Rcnirn andconsider ,methodsfor standardizing the allocation of operating costs for general government. ~y' ~s." ~;x . ~.-. i'- . r-~; .. y'~ 1. Zo address the issue of indirect costs, the ministry looked at work being done by the Ontario Municip~rl CAO's 13enchmarking Initiative (OMI3I). O1~'IF~l proposed new categories for general govermncnt and a model for allocating the program support u e;r of general government to other functions. T'he C)h~fBI model was accepted bythe province, .and starring in the 2002 reporting year, allniunicipalities'tivith populations over 100,000 are required to apply the O11'tI3I allocation method. Under the OMI3I method; the amount allocated to each function is haled on the amount of program support services consumed. Mitnicipalitics with populations under 100,000 will allocate general goverm7ent `pro; ram stFpport based on costs for a service area as a pcrcent:age of total rmmicipal operating costs. hot more information, please see "Alloc:ation of General Government" in the Introduction to the F1R instructions. The instructions are posted at httn://ot;aweb.mah.~oy.on.cilfir/~~'Ielcome.htm. municipalities enter operating costs directly into open cells in the efficiency measure schedule. Municipalities also enter data that is not collected elsewhere in the FIR directly into the efficiency and effectiveness schedules. Different levels of local government have different responsibilities for local services. The level of government that delivers the service is responsible for reporting the performance measurement data in the FIR and reporting to taxpayers. For example, upper-tier governments will report performance data as they relate to their roads, whereas lower- tier municipalities will report only on local roads for which they are responsible. In implementing MPMP requirements, municipalities should take the following steps: • Consult instructions and schedules to the FIR (Schedules 12, 40, 42) and MPMP. • Determine what information already exists and what information needs to be collected. • Assemble data. (FIR data is not audited. The data for performance measures should be relatively easy to collect by staff within municipal departments.) 1 S F r'"_i ~' f~.w._ - Municipal Performance Measurement Program E:. • Complete and submit FIR and MPMP schedules to the province in the second .' quarter following the end of the reporting year. • Report performance measurement results to taxpayers by September 30 following ~" the end of the reporting year. t S, It is important that municipalities record how data was collected and the source. { Keeping records helps municipalities avoid inconsistent and incompatible procedures from year to year and ensures greater data integrity. Reporting to Taxpayers Information to Report Municipalities publish for taxpayers all efficiency and effectiveness measures completed in the MPMP schedules of the Financial Information Return. Municipalities report a measure when their level of government is responsible for a service. For a list of performance measures, please see the summary of measures on pages 8 to 1 1. Reporting Methods Municipalities may choose how they publish performance measurement results for taxpayers. Below are examples of common methods: • By direct mail to all taxpayers and households. • Through the property tax bill. • In local newspapers. 9 • On the municipality's web-site. Municipalities inay use more than one of these reporting methods or a method of their own choosing. Reports should be concise and written in plain language.' * The Public Sector Accounting Board (PSAB) has developed a Statement of Recommended Practice (SORP) that is an example of a general framework for public performurce reporting. SORPs serve to provide information for municipalities about the development and acceptance of performance reporting recommendations. They can he found at http://www.psab-ccsp.ca/index.cfm/ci_id/15602/la_id/1. IG The City of Brampton makes good use of visuals in its MPMP communications. ._~~ f~ , Municipal Performance Measurement Program ~.~ ~. . ;Y3~ - ~~- ~`(~ „yam ~ J.¢~¢j. •'. i f,' j ~ ~:~. _ ~. `4~` It ;'~ ,3C. ~~' , ° .- pie _ , i ; ,r ~° ~ rye, Pert;ilr~aef~as~a~s-H~i3tuN~tstEffeotrrenessl _ ;~» ~ _ 7Ya4 u.t CUB-P~.4: v_ fAkT4 wiRT A~~4~4??\".Kt~l, .:~.!~.CA~T!l4iW I {.=N't.14Y:7te'K7ieF: ~3~f1n~AQ i1!lG.?' s '512~"'~s.. .~: i lily feq~(µ.r•wwY. L.r:r :tl K4n j;Vll pr'~:ry I r >:.'~t yNV,ir I 1', IfY'i '',wit~rµ. ?t:XS'{,~, itt~iM ~n» ~ :.~w 4 w ~:,xM ~~r~wx..~v,ir ~ fI Mrl i~1: ~. err ]: r_?A'fii i»~war ?.d L'J9R5 WCws+ - '~i +.ik+_llh7 ~c~~s„a:~.~~~~aw~:K.M«,,~,.s.,»-.n.... tia;a>r ?wa7. s..:~c~. - ~r~.~ The Town of Deep River reports performance measures on its web site - using a table format. Principles of Good Reporting When publishing performance measurement information, municipalities should keep the following points in mind: • Reports should focus on results, highlighting the value of the service. • Information should be meaningful, clear and understandable. • Numbers alone may be misleading, it is therefore best to include comments explaining the numbers. • Keep comments simple -operational detail may obscure the real story and cloud municipal transparency. Reporting Templates The Ministry of Municipal Affairs and Housing has provided a reporting template municipalities may use which meets the above principles. The template is posted on the ministry web-site: www.mah.gov.on.ca (From the list of Resources for Municipalities, click on the link to Municipal Performance Measurement Program). Municipalities may augment the information they are required to report or add the results to other municipal publications, such as annual reports. Municipalities may also choose to use their own template if this better suits their needs. .~~ a ~ _: ' ~.. <; ~ ` & & S: - . - 1 ,, ii. ~`; r ~~ '. ,. Municipal Performance Measurement Program Ptttu f 1~:~ f~~t.Ll~ ,, . _r_ ~ ~- . s~,_ _ ~.: ~ `kx;. ~; sk 9C~3~4 ~-+~ k91~ 1.I~tReYZ t i ~r sSas c~ ~C J~2'f{ ~4St ~ Ui~'s74`E~ ~YIO`-~ ~~}}` ,}.... - d'k RA fCkulS j.~'3~7Q ~4 i~:ld(If't8. j ,~ :o ~a~s <}~ratr~3 nxs ~r war"3;a mar~~l~r:~~~ cir~]~ard~+sC:~Wr,Eker!rNre `~> x~ ',! :rs3tr~'~etEt7ar~1ri4x. ~ ...~:tS. l'T ~krl"8f7~#~G'F2+LF31~R~YI~fl12tr~S. ', w~r~e fi~ CDf~1Fiditi ca5~ ak ;~~ b x'a ~r~ i'ab x"~ vary?~3ti3 •~ ~ sR z~°a r ~ P.~r e1'C`~~2 of ~a,vr e.~i9s i~t~N~ lr~ IC`,{1Cr4~§IGt4r FY;[~j~';r~fj 1.31 ,~. ' ~•P 5`,~f~ F`i~ #;irr dL$ItrP1!'~8s~ IfllYi~~S@(ihCF27F1~'CafS'~EM ; vim ~_ ~. . _.~-. ., . ..R:. .- ..... . , . , ~ ~ Y . - . , _ w.~. . . ~~~Q . .... .. .... . . .~.., _ „ :~ ... A.... . .wu.+.-+... . - Municipalities may use the template provided by the ministry to report MPMP results to the public. Sharing Performance Measurement Results x`~ ~{'r ~. omparisons make it possible to discover which municipalities have practices that may be emulated. Raw numbers that only address last year's performance may mean very little unless they are compared with other numbers. For example, actual performance for a year can be compared with the performance a municipality had planned to achieve. This is the most common type of comparison used by municipalities which have performance measurement programs. Performance can also be compared over several years to determine trends. Municipalities that have had performance measurement systems in place for several years usually do this. The Municipal Performance Measurement Program also gives municipalities the opportunity to make comparisons among themselves using a set of common performance measurement data. Thus, to find opportunities for improvement, municipalities are encouraged to share and compare their performance results with those they consider similar to themselves. Sharing results allows municipalities to discuss service levels and how other municipalities deliver services. The notion of discovering best practices has special significance in this program. Comparisons may show that some municipalities apparently have lower unit costs or better effectiveness results. Certain differences may be attributed to factors beyond anyone's control, such as location, topography, climate and economic conditions. However, some municipalities will achieve better results for efficiency or effectiveness measures because of the management strategies and methods of service delivery used. Other municipalities could benefit from those strategies to achieve better performance measurement results. IS Municipal Performance Measurement Program Ontario Centre for Municipal Best Practices The Ontario Centre for Municipal Best Practices (OCMBP) has been established to seek out best practices in municipal service delivery using MPMP data as a starting point. The centre also uses other data sources, such as the Ontario Municipal CAO's Benchmarking Initiative (OMBI), and sends detailed surveys to municipalities with better than average efficiency and effectiveness results. The centre actively showcases and promotes best practices. MPMP data is used by OCMBP to research and publish best practices in municipal service delivery. To date over 40 best practices in four service areas have been discovered using MPMP data. As a virtual centre, the Centre for Municipal Best Practices uses its web-site to share information on municipal best practices (http://t ww.amo.on.ca//AM/Template.cfm?Section=What_s_NewS). ,a~~~~~~,~. ~.~ ~n~u.. ~ ~?r if,~tlQ a.`r~llfr• fix' till rtii~ ij kil lk~: i 1'1ai'It('f~ti ~a ai+ta rncaei.~a6 ~cm~ ~v ... Azr_ . ~r `, r~~ ~ ~ 1 .~ ~ }~. ~~ ~- ,.i arm f~ .~.~~ ~~r ~~ ~' ~~ ~ , Ste' ~' ~~~ _ ~ ~- . - ; '~i~) il'. x,15 ~"1 I~i '. 4'~~~ i3i. ~ ~1° ~ ~ ~ ~i~ - ~~ _ ,,,,yyc~~~ ~ ~Q.€I~Pn .... .. - i~,n.rNes>>gn _--.__ ~;roi cl~rSerms at The =ur,:aoa s'entre Fir i~tur~~c'~p_I ~_~ ~F~ct;c~s (nr~#~iC~i~~< a part~,~hip L,atwe R:cEr ronrr,; _ tha ;;;.saciatian cif' f~4urnri~aiti~+s fff r,n'an~, 5.gt<?4j ari t'.he i-!r~vncv of ~:~r~~._r _!,r .~ ,~rptHr ------ ct~mman~advprr,'xtkrn ;n uur~ Uf ::tiia: t ~[~tad Links., ~..~._ Ttie f~e^~tra ~s gui~eci ~y 3errns ~t Ref~?rer,ce~ ~~,4Fri~;h ~;t~tZlis~s ti,~ ~~ ~ ~ ~3s~s ~t Ulrr.~tir~n kit !~i,jv~ te?~:I?~~t In the iJ~rR4ifi,_3ti0tt, ~a~iti;siriv~ 2+~itl ~;11~21e,_3t<;n fhtr.,r sTit,;liC?j,%~~ b~SY. pr~Ct~Bg ~ rtL?? ~:i1n,3, Tf`ia ~r,rtiCC'S :.+r~ baSea dr1 tht; J'.~ ~~ ~,,,,tr3~u, r~.,r~t, C~Ii~~l~r~ ~4' the Cvliral5lPY' ~~ ~tiErri~'~fy31 zel~~~a ~ tt~~~5ir7g ~3,aF+LAHI, n its ;.fi~i-~iCiF Home page for the Ontario Centre for Municipal Best Practices The Ministry of Municipal Affairs and Housing has actively supported the establishment of the centre and in March 2002 provided the Association of Municipalities of Ontario with $100,000 in start-up funding for the project. A further commitment to provide ongoing funds was made in the June 2002 provincial budget. ~/ F'-- -~ . ~.. ':~ t:~- .: rr- _ .. ~_ i. ~, ~. 4 ' _ ,~ - _= :.. ; I Municipal Performance Measurement Program 11i. Making Sense of Performance Measurement Information he Municipal Performance Measurement Program addresses both the efficienry and effectiveness of municipal service delivery. Municipalities should concentrate on both aspects because there is often atrade-off between the two. For instance, a municipality might be able to reduce its unit costs to the lowest level in the province - but only by providing a quality of service that taxpayers find unacceptably low. Similarly, a municipality could provide the highest quality service in the province - but only by means of tax rates or user fees that make the municipality uncompetitive in the long term. Thus, efficienry and effectiveness measures are needed to ensure a balanced approach to service delivery. There are several ways to improve overall performance by making trade-offs between efficiency and effectiveness: • Increasing effectiveness by increasing unit cost. • Increasing effectiveness while holding unit cost constant or reducing unit cost. • Keeping effectiveness constant while reducing unit cost. • Reducing unit cost by reducing effectiveness standards. Most municipalities would likely view the second method as the most preferable and the last method the least preferable, but all methods represent opportunities for improving overall performance. Performance measurement encourages municipalities and taxpayers to ask why actual performance differs from planned performance. Consider the scenario in Figure 2 and ask yourself, "Is performance good in measure A and poor in B?" Figure 2: Performance Scenario Planned Actual Performance ' Performance Measure A 100 125 Measure B 100 75 The answer is that we do not know without further investigation. Most people recognize that financial data alone do not tell the whole story. It is important to understand the forces that underlie financial statistics before forming judgments and deciding how to improve financial results. Performance measurement works exactly the same way. Differences between actual and planned performance, trends over time, and differences among municipalities must be investigated to determine what, if anything, can or ought to be done to change performance. Performance measures help identify areas that need attention. 20 Municipal Performance Measurement Program In the scenario illustrated in Figure 2, the target in Measure A may have been underestimated, or the municipality may have experienced unexpectedly favourable conditions. On the other hand, the municipality may really have done a good job. Maybe it employed new methods or concentrated on a specific segment of the population, and that brought about better than expected performance. In Measure B the target may have been overestimated, or conditions beyond the control of the municipality may have prevented it from reaching its target. Alternatively, the municipality could have made errors (e.g., used inaccurate data) which led to suboptimal results. Snap judgments suggesting that results are simply good or poor are not appropriate in performance measurement. A municipality needs to determine why performance exceeded expectation in one case and why it was below target in another. It is also important to understand that both situations depicted in this scenario are worthy of investigation. Certainly a municipality would be interested in identifying performance that was below expectation because it would want to discover ways to improve results. But it ought to be equally interested when performance exceeds expectation because it would want to repeat good performance and identify performance practices that it could copy elsewhere in its operations. Municipalities need to determine why their performance exceeds or falls below expectations. Analyzing Results In the early stages of this program, municipalities may be limited in terms of the complexity of analysis they can apply to performance data. That limitation may be due to a lack of past data for purposes of internal comparison or a lack of experience in inter-municipal comparisons. There are, however, straightforward analytical techniques that can be very useful in identifying areas where performance can be improved. Comparing Performance Sharing performance data is very useful. It is reasonable to ask why some municipalities are able to achieve apparently better efficiency or effectiveness results and determine whether they use management or service delivery methods that could be copied. Even if differences are due to factors beyond a municipality's control, sharing the data is useful for both taxpayers and municipal officials to understand local performance in light of local circumstances. Planned Versus Actual This method, depicted in Figure 2, is a simple but useful method of analyzing results To use this method, municipalities must set performance targets. Performance targets can be estimated by referring to the following sources: • Past performance -even if performance has not been historically measured, data from which past performance can be reconstructed is often available. 1 ?:t~'-, i 2~ 1 >. _ -- ~~ Municipal Performance Measurement Program `s ~~,~ i ~' `. • Comparisons to other similar organizations or municipalities'. :~ '' _ Performance standards established through detailed technical studies. • Private and public sector association data that might give averages or comparative information. • Research into client needs in the form of surveys, consultative panels, focus groups, etc. h Setting performance targets does not mean that a standard will always be met. Performance targets and standards have to be realistically set. When setting targets for ' the next fiscal year, municipalities have to consider their long-term or strategic plans, how much money is available, council's policy priorities, service demand and environmental variables. Figure 3: Trend Over Time (Council Take Warning Scenario) 40 30 .,. EJ j, 20 i r.: _ i 10 - '- 3 ~ Year 1 Year 2 Year 3 Year 4 Expenditures • Service Area/Department Results Trend Over Time This is another valuable analytical technique. Municipal performance normally does not change radically from year to year. Instead, it tends to change gradually, either positively or negatively. If a small change is persistent over time, however, it can become significant. Consider the scenario depicted in Figure 3. A service that spends within its budget typically attracts little detailed scrutiny. When increased spending is proposed, people pay more attention. But what if the results achieved have been declining over time while costs have remained constant? The results are just as important as the cost of providing a service, but an important trend could be missed if department results were not reported over time. Measures chosen for the Municipal Performance Measurement Program were selected, in part, because data already exists in most municipalities. That means, for some measures, municipalities can reconstruct past performance and determine trends. Generally, a measure will have to be included in the MPMP schedules for two or more years before year-to-year comparisons can be made. * The Municipal Information & Data Analysis System (MIDAS) enables its users co make comparisons with similar municipalities. 22 _~ - ~- •-~ Municipal Performance Measurement Program } fr ~> I . $ j Municipal Information & Data Analysis System ~ ` _ ,3 ~' _ `, In an effort to meet the current needs of municipalities to access operational and G,- `1:k financial data, the Municipal Information & Data Analysis System (MIDAS) was launched in May, 2007. MIDAS was developed under a joint partnership between the ~ L ' Association of Municipalities of Ontario (AMO) and the Ministry of Municipal Affairs , ~ and Housing (MMAH). ` ~~; ' `' ~ MIDAS is a query and analysis tool that provides Ontario's 445 municipalities with the ability to browse and extract Financial Information Return (FIR) and MPMP data in a restricted section of the AMO web-site. MIDAS enables municipalities to work with both individual results and comparative statistics, either in a numerical/graphical format or by using Geographic Information Systems (GIS) software functionality, e.g., thematic mapping. Using MIDAS, municipal staff can: • Extract MPMP results and create their own municipal comparisons, or extract data for past years and graph trends; • Generate aggregate statistics for municipal groups and drill down to individual results; • Use advanced features to set conditions and create custom reports. MIDAS promotes greater knowledge transfer among municipalities to support municipal staff and council in making more informed decisions concerning municipal service delivery. With the capabilities of MIDAS, Ontario is assisting municipalities toward effective strategic performance management. ~ MIDAS is a powerful, user-friendly, web-based data analysis tool designed for municipal performance management purposes. While it is available to all municipalities, it will be of particular benefit to small and medium-sized municipalities, most of whom have experienced difficulties accessing this kind of data in the past. MIDAS will improve the ability of municipal staff to conduct analyses using performance measurement data. This expanded capacity assists municipal staff to generate timely and accurate reports to municipal council and to the public. MIDAS ~ promotes greater accountability and transparency in municipal government. MIDAS improves the ability of all municipalities to do fair and meaningful comparisons and will secure some of the larger benefits of applied performance measurement in the municipal sector. t Municipal Performance Measurement Program - _ ,"'~ ~~ .~ ~ : ~. a ~` .. Summary ~' Think back to the case of Ottawa-Carleton described at the beginning of this h k Th l db f i i d h . an oo e per ormance measurement an ann ng system t e reg on p ~. I established for water service maintenance in winter was very helpful in improving operational performance. It also provided guidance for the region's capital replacement ~: program. The Municipal Performance Measurement Program provides municipalities with a common set of performance measures for some key municipal services. The measures will evolve over time, and new services will be added to the program. Since the year 2000, Ontario municipalities have been able to start measuring their performance and develop a common base of data. The measures assist municipalities in identifying ~ potential areas for improvement and best practices to emulate. This program also strengthens local government accountability to taxpayers. MPMP results allow taxpayers to see how their municipalities are performing and enable ~ municipalities to set targets for continual improvement. The goal of local government, on behalf of taxpayers, should be to find an optimal balance between efficiency and effectiveness in the delivery of local services. Performance measurement is far more than the annual reporting of past data. It has many uses and can contribute directly to improving the quality of life in Ontario municipalities through improved service delivery. In its commitment to assist municipalities, the Ontario government has developed support materials such as this handbook, and through its MPMP Advisory Committee will continue to respond to feedback and advice on how to refine the MPMP measures and the program. Municipal Performance Measurement Program Part 2 -Developing Customized Performance Measures To complement MPMP measures, municipalities may wish to develop performance measures to address unique local situations or measure services in more detail. This section describes a generic method for developing performance measures beyond those included in the ministry's Municipal Performance Measurement Program. The method can be applied to any type of service delivered by any level of local government. The method consists of a three-step process for examining a service (or program): 1. Defining the service mission. 2. Stating the key results the service is trying to accomplish. 3. Selecting performance measures for the desired results. 'T'his is the most commonly used method for developing performance measures in government today. It can generate many different kinds of performance information to support a variety of municipal decision-making processes, including strategic planning, operational planning, budgeting, and service or performance evaluations. 1. How to Develop Customized Performance Measures Defining the Service Mission Before measuring performance, municipalities must be clear about the purpose or mission of a particular service because performance measurement must contribute to achieving that end. Sometimes a mission is referred to as a goal, a vision or an outcome. No matter what term is used, a mission should be a succinct statement understandable to someone not familiar with the service. (See examples in Figure 5). A mission is not normally time constrained or quantified, nor does it address how service is delivered. Rather, it states what the service is trying to achieve over the long term and should respond to three questions. WHAT is the product or service provided? WHO is the intended client, customer or target group? WHY is the service needed? The questions what, who and why are answered below for three sample service areas. Landfill Operations WHAT and WHO To receive and manage solid waste from residents and industrial, commercial and institutional users in the municipality. WHY To ensure a safe environment and protect public health. 25 ~` B~ tea. _:~_ {" a ? ?', ~~ .~cr _ r__ ~ ~, k;. h; i. f. w:, ~, ~,, - ~ ,~ z , Y. ._. ~~ - Municipal Performance Measurement Program Es ~n ";°' Recreation Services ` C' WHAT and WHO To provide aquatic and fitness opportunities for enjoyment, and t ~ skills development for all residents. ~ ~'` WHY To contribute to a healthy community. Information Services - Helpline WHAT and WHO To provide cost-effective centralized municipal information and ~ problem-solving services to the public and other users. y : WHY To improve access to municipal services. Stating the Key Results the Service is Trying to Accomplish ~(unicipal services are complex. We could develop an endless number of performance measures, but doing so would create more information than could possibly be absorbed. The point is to identify the outcomes that need to be measured. It is essential to realize that any government service produces many different kinds of results. The results can be grouped into three categories: service outputs, client benefits/impacts and strategic outcomes. The three categories of results relate directly to a service area's mission as shown in the following chart. Generic Method for Developing. Performance Measures Defining the Service Mission Results .What is the service? • Service outputs (efficiency) Who. is the client? • Client benefits/impacts (effectiveness) Why is the service needed? ~ Strategic outcomes (effectiveness) All three categories of results are important because together they encompass the concepts of efficiency and effectiveness. Service outputs can be evaluated by efficiency measures that are often expressed as unit costs. Client benefits address effectiveness in terms of quality or benefits from the client or taxpayer's point of view Strategic outcomes address effectiveness in terms of the benefits of the program or service over the long term for the entire municipality. Client benefits and strategic outcomes can be evaluated by effectiveness measures that are often expressed as percentages or ratios. See Figure 4 for an overview of performance measurement results. Figure 5 illustrates the link between defining the mission and results in three different service areas: landfill operations, recreation services and information services - helpline. In Figure 6, performance measures have been developed for each desired result. 2G Municipal Performance Measurement Program PART 2 Figure 4: Overview of Performance Measurement Results ,emu. _ ~ .~ ,w ~.. a.'°b ~, r ffi yj - ~z s Description Direct outputs or word: Results from client`s Results from community's processes. point of view. point of view. Main Users Municipal staff and management. Municipal staff and management, senior management, councilors, public. Senior management, councilors, public. Degree of Control Measurement More difficult to measure. Effectiveness measures compare results achieved to goal Measures expressed as percentages, ratios, counts. Figure 5: Steps 1 and 2 -Defining the Service Mission and Key Results ~ ~ - ~ -; 6'^' LANDFILL OPERATIONS Processing solid waste Service time minimized Environment and public health protected Relatively direct control Measurement is relatively Measures must be defined straightforward. carefully. Efficiency measures expressed Effectiveness measures as ratio of inputs to outputs. compare results to goal Measures often expressed as Measures expressed as unit cost.. percentages, ratios, counts. Less control, but can still be Indirect, outside influences. strongly influenced. are strong. Mission: To receive and manage solid waste from residents and industrial, commercial and institutional users in the municipality to ensure a safe environment and protect public health. RECREATION SERVICES Mission: To provide aquatic and fitness opportunities for enjoyment, and skills development for a(I residents to contribute to a healthy community. Providing instruction for fitness and swimming programs Providing recreational swimming Services meet demand INFORMATION SERVICES - HELPLINE Mission: To provide cost- effective centralized municipal information and problem- solving services to the public and other users to improve access to municipal services, Improved levels of fitness Public satisfaction Providiny help-line services Services meet demand Response tune improved Public satisfaction 27 Landfill capacity maximized Healthy life-styles encouraged Improved public access to municipal services Municipal Performance Measurement Program 9 Selecting Performance Measures for the Desired Results Having first defined the mission and then identified the desired results, it is now necessary to develop performance measures. After completing the first two steps, many performance measures will become obvious. It may be difficult to measure a result directly, but possible to measure it indirectly. One example of an indirect measure is assessing the effectiveness of a fire prevention program through the change in the number of fire incidents. Performance measurements can be expressed as raw numbers. For example, efficiency measures are usually expressed as unit costs. Percentages and ratios are often used to express effectiveness results. As noted earlier, performance data is most meaningful when comparisons can be made. Such comparisons include planned-to-actual, trend over time and comparisons among municipalities. Performance can be measured after considering a variety of methods: • Satisfaction or opinion surveys. • Inspection reports. • Observer ratings. • Demand statistics, e.g., waiting lists. • Utilization statistics. • Time-recording devices and systems. • Test scores. • Progress reports. • Participant evaluations. • Demographic, social, economic and cultural data from Statistics Canada and other organizations, e.g., Ontario Good Roads Association, Canadian Urban Transit Association. • Occurrence reports, e.g., crime occurrence rates. • Self-reported data that may be required from clients. • Readouts from measuring and monitoring machines. It is important to measure quality as well as unit cost. Results should be seen in terms of how much is achieved and how well. Quality has different connotations in different programs but it boils down to this -meeting client or taxpayer expectations. The approach to performance measurement described here explicitly addresses client benefits or impacts. Typical examples of quality measures include error rate, complaints or compliments, frequency of service and waiting time. 28 Municipal Performance Measurement Program PART 2 Figure 6: Step 3 -Selecting Performance Measures for Desired Results ~ .~~„ - i ~ ~ ~ • .,~xaun z~..~ n...,v~.!` ti E J! w ~-Ad.~Yx t. .Be'..vc&. .. +ACi~ ., i ~ ~ rd,~, <.e^&. .. ~~ s ~ .. :~ i t ~, .~x r ra ~°S+.w e, w. ..r.u9....x, t~?~'e. ..a3.ta. sSrs%_<1 LANDFILL OPERATIONS Processing solid waste Service time minimized Environment and public health protected Mission: To receive and manage solid waste from residents and industrial, commercial and institutional users in the municipality to ensure a safe environment and protect public health. RECREATION SERVICES Mission: To provide aquatic and fitness opportunities for enjoyment, and skills development for all residents to contribute to a healthy community. • Percentage of participants surveyed who are satisfied or very satisfied with recreational programs. INFORMATION SERVICES - HELPLINE Mission: To provide cost- effective centralized municipal information and problem- solviny services to the public and other users to improve access to municipal services. • Cost per tonne processed • Equipment hours per tonne. Providing instruction for fitness and swimming programs Providing recreations! swimming • Cost of instruction per swimming r_lass. • Cost of instruction per fitness class. • Cost ofrecreational swimming per hour. Providing help-line services • Cost per hour of service • Average number of minutes per request. • Average waiting time to enter scales. • Average cycle time once scales have been entered Services meet demand •Number of swimming classes per household. •Number of fitness classes per household. • Number of hours of recreational swimming per household. Improved levels of fitness • Percentage of participants in swimming programs that pass level. • Percentage of participants in fitness programs that obtain higher level of proficiency. Public satisfaction Services meet demand • Number of requests for assistance per year, by service. Response time improved • Average elapsed time from initial request to problem resolution. • Percentage of off-site monitering tests that meet environmental standards, Landfill capacity maximized • Average waste/volume. • Estimated number of years to full capacity. Healthy life-styles encouraged • Number of recreational participants per 100 persons in municipality. • Number of participants in fitness and swimming instructional programs per 100 persons in municipality. • Estimated percentage of city households that have used recreational facilities x times or more within the last year. Improved public access to municipal services • For municipal services accessed by phone, number and percentage of clients surveyed vvho say they were directed to service by helpline. Public satisfaction • Percentage of clients surveyed who report information need was met or problem was satisfactorily resolved. 29 z:- x_ ,. . r . w ~' t.,._ Municipal Performance Measurement Program ~' ~. ~ e `` ~ ll. Benefits of Performance Measurement for Municipalities Helping Municipalities Developing, implementing and using performance measures requires a commitment on the part of elected municipal officials and municipal staff. Once ~ ~ this commitment is made, the benefits of performance measurement can be realized. { , First, performance measurement can help a municipality set effective priorities. Activities can be prioritized and resources allocated (including the time and attention of managers) according to the contributions they make toward meeting client needs and expectations. 1 Second, performance measurement changes a municipality's whole outlook. Results become the focus, rather than the activities conducted in the past. Service delivery can ( be regularly altered or tuned to respond to current resident needs. A focus on client I needs causes organizations to rely more on co-operation and partnership. Third, performance measurement encourages innovation. The primary focus for managers is not on how the job is done but rather on what is achieved. This Frees managers to truly manage and motivates employees to develop or try new ideas that will achieve the stated objectives. Fourth, accountability to council, senior management and taxpayers is improved because these stakeholders can be told about a service area's achievements succinctly. Municipal officials, therefore, have an enhanced ability to make more informed decisions. By the same token, performance measurement allows managers to delegate authority with greater confidence, because their expectations are clearly set and they have a method for reviewing actual performance. Moreover, the public better understands how its tax dollars are being spent. Performance measurement helps to improve municipal performance in local service delivery. It helps to set targets and allows those targets to be monitored effectively. Managers can be alerted to situations that should be improved or that might be copied by other parts of the municipality. Improvements in performance often occur simply by setting clear, measurable performance targets. Linking Performance Measures and Budgeting Linking performance measurement and budgeting is an increasingly popular concept. The budget process requires the identification of spending priorities and is often linked to strategic objectives identified in the strategic planning process. Staff, council and citizens all participate in the budgetary process. :; 30 - I r .-'' Municipal Performance Measurement Program y -~~ ~ 7 s ? Traditional budgeting involves the evaluation of performance by comparing budgeted '_ ~;- , ~ ? i : and actual results. Monitoring is ongoing and staff investigate variances between '''" budgeted and actual results. Performance measurement can provide an additional ,, i method of evaluation with a focus on outcomes. Efficiency measures generally ='. examine cost per unit, while effectiveness measures examine progress towards non- $ ~, monetary goals. Both types of measures complement each other. Staff can examine performance measurement results, look at trends and compare results with those of ~~ similar municipalities."This adds another dimension to controllership and helps --' decision makers evaluate whether resources should be rebalanced. ~ ~. _ ., _ z. Performance-based budgeting is another approach gaining favour among managers. It is a system of planning, budgeting and evaluation that emphasizes the relationship between the budget and performance measurement targets. Performance budgeting emphasizes flexibility. The traditional line-item budget is replaced with an activity- oriented budget. Departments have the flexibility to determine how they will spend ~ their allocation. For example, money originally allocated for travel may be re-allocated to meet other expenses. This gives managers the flexibility to address changing situations and adjust their approach for meeting performance targets. Activity Based Costing (ABC) is a key part of performance-based budgeting. An important feature of ABC is the manner in which indirect costs are allocated. Indirect costs are allocated on the basis of the consumption of selected services. Consumption of a service is measured by units that are related to the delivery of the service. For ~_ example, the number of impressions could be used to measure the consumption of printing and copying services. Activity Based Costing categorizes expenditures by activities rather than object categories of expenditures, such as salaries and materials. The method of allocating indirect costs developed for the Financial Information Return (FIR) by the Ontario Municipal CAOs Benchmarking Initiative (OMBI) for large municipalities, combines the ABC concept of allocating indirect costs with the reporting categories used in the FIR (See Page 13, Part I Indirect Costs). The method measures the consumption of selected services by all functional areas. Indirect costs are then assigned to functional areas based on the consumption of services. Functional areas represent service areas such as fire, roads and water. i Both the traditional budgeting approach and performance-based budgeting emphasize the monitoring and evaluation of results. Traditional budgeting often makes use of performance measures, whereas performance measures are integral to performance- based budgeting. In both approaches, managers must continually monitor performance and evaluate progress in achieving priorities in municipal government. The intent is to be accountable to the public and use public resources wisely Management and council must be ready to ask how their efforts have improved the quality of service for citizens over the year. *'I'he Municipal Information St Data Analysis System (MIDAS) features the ability to make comparisons with similar l municipalities. a 31 E:_ ~.r Municipal Performance Measurement Program Contacts For more information about the Municipal Performance Measurement Program, please contact the nearest Municipal Services Off ce or the ministry's Municipal Intergovernmental Relations & Partnerships Branch at (416) 585-6022. Information about the program is available on the ministry's web-site at www.mah.gov.on.ca under the heading, Municipal Performance Measurement Program. Municipal Services Offices Central Municipal Services Office 777 Bay Street 2nd Floor Toronto, ON MSG 2E5 Phone: (416) 585-6226 Phone: 1 (800) 668-0230 toll-free Fax: (416) 585-6882 Eastern Municipal Services Office Rockwood House 8 Estate Lane Kingston, ON K7M 9A8 Phone: (613) 548-4304 Phone: 1 (800) 267-9438 toll-free Fax: (613) 548-6822 Southwestern Municipal Services Office 659 Exeter Road 2nd Floor London, ON N6E 1L3 Phone: (519) 873-4020 Phone: 1 (800) 265-4736 toll-free Fax: (519) 873-4018 Northeastern Municipal Services Office 159 Cedar Street Suite 401 Sudbury, ON P3E 6A5 Phone: (705) 564-0120 Phone: 1 (800) 461-1193 toll-free Fax: (705) 564-6863 Northwestern Municipal Services Office 435 Jaynes Street South Suite 223 Thunder Bay, ON P7E 687 Phone: (807) 475-1651 Phone: 1 (800) 465-5027 toll-free Fax: (807) 475-1196 32 - H A N D B `Q (~ K