City Budget Priorities

Manager's Incentives

Next is the structure of incentives in government. Whereas the typical manager in the private sector is motivated by ambition, the public sector manager is motivated by fear. One of those fears is the fear of being a dollar short. If we are a dollar short, we might have to cut staff and programs. Better to be five million dollars long. Ironically, in the quest to be five million long, we cut programs and staff in order to save our liquid wealth.

Second, these same managers and department heads have been very successful parleying the myth of city poverty into successful appeals for new tax. In fact, they have become less like public administrators and more like old fashioned entrepreneurial wealth maximizers. By this I mean that a big portion of the staff year is devoted to developing and marketing the sorts of tax proposals I have listed above.

The Compartmentalized "Restricted Fund System," or So Many Beans, So Little Time

Third, over the years, we have compartmentalized our finances into an inefficient, territorial, pigeonholed, ossified system. Over the years, we have compartmentalized our finances into 42 funds. A "Fund" is a formally defined accounting and legal entity. Each fund has its own set of financial statements. So, in our detailed financials, we have 42 balance sheets and 42 income statements. Each fund is legally restricted to get its money from a certain set of sources, and spend it in a certain number of ways. The funds may be authorized by charter, ordinance, administrative fiat, or accounting convenience.

As a footnote to this observation, those of you with accounting experience can imagine the accounting effort of reporting 42 balance sheets, 42 income statements, and then consolidating all of these. So many beans, so little time.

_42 Checkbooks, 42 Cupboards

It is like having 42 household checkbooks: One for rent, one for food, one for front yard maintenance, one for back yard maintenance, one for fixing Her car, one for fixing His car, etc. With this system, we could be millionaires, and starving and homeless at the same time. In my opinion, Boulder city government isn't like this, it is this.

Boulder Evolves the Strong Department Head Form of Government.

Now, how did this state of affairs evolve? Was it an act of evil genius? A conspiracy? Or was it just a cultural evolution? In my observation, it was the latter. As a result of unique historical circumstances, we evolved a unique system of government. We developed the "Strong Department Head" form of city government. You will not find this form of city government in your civics text. You will find the "strong mayor," or "weak mayor" systems. You will not find the "strong department head" system. This system powered the territoriality and fragmentation of our financial system.

Here is my observation. I was there.

The Strong Mayor and Manager Leave

In 1983, we had a very strong city manager, Bob Westdyke. We had a very strong mayor, Ruth Correll. I don't mean to get romantic about an old Manager and Council. But when Bob and Ruth left, there was a tremendous power vacuum. The "Big Eight" Take Charge.

At that same time, we had eight very strong department heads. We, on staff, referred to them as the "Big Eight." There was not a wallflower among them. They had strong personalities. Half of them had boards and commissions full of political activists. These strong personalities recognized that in order to do their jobs properly, they had to fill the breach in power.

The Consequences of the Strong Department Head System.

Before anyone recognized the consequences, the Big Eight had staked our their territories, defined their expectations, taken advantage of the city's culture, and started making policy. They took turns pitching their own taxes, and in defense of financial territory, they set up their restricted funds.

The City Manager had lost his role as chief executive and become a negotiator-in-chief (as well as an in-house anger management counselor), and the Council had lost its policy-making power and appropriation authority.

Council Members Divest Themselves of Policymaking, and Become Elected Special Project Managers.

In my opinion, council members were relieved. Freed of their policy making responsibility and appropriation authority, they could now become elected staff project managers. Each could pursue his or her own pet projects: government housing, transportation encumbrance, welfare programs, land use micro tuning, international relations, air quality improvement, the rescue of wetlands, the reinvigoration of American socialism.