Cost Accounting in Local Government

No Reductions in Service

“There will not be any corresponding reduction in service.”

I have a close friend that I met during our University Public Administration program days. We have stayed close during out respective forty year careers and talk or meet a couple of times a month.   He works for a large district that until last month had 1,400 employees.   But last month they discovered they had 10% more employees than they needed.   So they laid-off 10% of the employee workforce.

Wait for it……. wait for it.

“But the public will not see any corresponding reduction in service.”

There it is. The assurance to the public that nothing in their lives will change because of this reduction.

So the two extreme points of this continuum are that these roughly 140 people were either just standing around doing little, if anything, or they were all doing something important that supported the existing Level of Service (LOS).  Most likely it was something in between those two divergent points.  Actually, most were largely involved in advanced planning, engineering and construction management, but due to the downturn in housing and its related commercial/retail development, these long range services were no longer required, or certainly not in those amounts.  So chances are they should have acted sooner.

And that taxpayer who has no idea what the cost of government really is gets to say, “I knew you had too much staff all along.”

What this district and every other local government agency cutting back staff is claiming, that the effect will be non-existent or so minimal as not to mention, is a not true, or at a minimum not the full story.   Sure you can fall back on a technicality that over the following year there will be no visible change in the LOS over the previous year.  However over a longer period of time, it all adds up.  If you reduce library hours from say 60 a week to 44 a week in one year, there is no denying the effect on the public, but reduce it by sixteen hours, two a year over eight years, you can claim that in any given year it won’t be noticeable.

Granted, I know a few of the reasons why this occurs, most notably that no sitting elected official wants to be part of the council or board that says out loud that our public services are not what they once were, but instead you are served as well as you were ten years ago.  So, we all pretend that nothing is amiss.  But it is.

Perhaps it is better to turn to an old approach: identification of work-unit measurements or even applying the average cost of each unit.  A budget will allow a division or department to provide only so many service units since every budget has limits, but express those limits.

  • X amount of police or fire responses within five minutes.
  • X amount of subsidy to recreation classes.
  • X amount of hours of pool hour availability.
  • X amount of tons of street patching or square foot of street overlay.

You get the picture. Some of you may already be doing this.  Keep these (and other) statistics and tie them to your budget and there is clarity to the public as to what happens to the existing LOS’s when there are cost reductions as a result of reduced revenues.  The service capability bucket is not bottomless, and we need to stop acting like it is.  “But the public will not see any corresponding reduction in service”.  They may not see it, but it is there if they look hard enough.

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