Practicality And Good Business Sense Should Be The Motives
Is it really possible to cut property taxes by a third without losing any quality in local services? The answer is yes - if you are willing to try some radical solutions. That is what the citizens of the Australian state of Victoria have done. Victorian state government went from a $4 billion deficit in 1992 to a $1 billion surplus in 1996, with a net gain in total statewide employment, notwithstanding the loss of 75,000 public sector jobs during the same period.
As the manager of Canandaigua, New York, I went down there for three weeks this year to see how this was done. I was accompanied on the trip by Canandaigua author and journalist Jack Jones. Jones asked the state's minister for finance and local government if "economic martial law" was too strong a term for what Victoria had implemented. After pondering for a moment, the minister smiled and said that he didn't think so. Within four years of the start of the experiment, a stagnant economy had been revitalized, local government had been dismantled and reassembled, and the spirit of innovation and competition had infused every level of government.
After meeting with the state's top policymakers and spending time in communities much like Canandaigua, I came away convinced that North American managers could learn a lot from these colleagues working half a world away.
Situated at the southeastern corner of the Australian continent is a beautiful and productive land much like western New York, where I work. Eastern Victoria has rugged mountains, some of them 6,000 feet high, and according to my fellow traveler, Jack - who has climbed all 46 of New York's high Adirondack peaks in winter - Victoria's mountains are much like those of New York.
To the west, much of Victoria's remaining land is cultivated in fruit orchards, a wide army of food crops, beef and sheep production, and a large and dynamic wine industry. Victoria's expansive south coast is a tourist's delight: a mix of rugged mountains with access roads carved into their sides and charming waterfront communities like Canandaigua.
As in my home state, one large city, Melbourne, dominates the urban scene, with 3.2 million residents. There is even a similar social and cultural gap. The area outside of Melbourne is referred to as "the Bush," even though it contains any number of urban communities comparable to or substantially larger than Canandaigua. But unlike New York City, Melbourne is clean and safe, a place where a morning jog or an evening stroll is not a risky venture. Melbourne also is a growing business hub, a major Pacific Rim port, and increasingly a repository for American investment.
The standard of living in Victoria also is comparable to ours. Neighborhoods share similar characteristics, with a full range of housing options, both apartments and single-family residences. Family farms dot the rural landscape, and judging by my own observations, public housing projects are tidy and well integrated into their communities.
Highways also are similar, except that there is no deep frost to levy its toll on highway users. The state maintains a modern system of divided, four-lane arterials and two-lane highways linked to local roads and streets. This fact does not mean that there is no challenge for Americans in driving in Victoria. I had to take care not to drive on the wrong side of the road (or worse, to step off the curb to cross the street and instinctively look the wrong way).
Children experience a comparable school environment, with buildings, grade levels, and courses of instruction much the same as ours, with of course some differences, such as the option of taking Indonesian in middle school as a second language. Interestingly, fewer high school graduates go on to higher education than in the United States. There seems to be more eagerness to get right into the workforce.
Throughout Victoria, students in both public and private schools wear uniforms, a practice that is popular with parents. Besides the local government reform, the thing that impressed me most was the positive impact on all involved of a mandatory school uniform policy. Children experience a lot less anxiety over their appearance, and less affluent youngsters have a better shot at being judged by what they do, not what they wear. Problems with both parents and teachers about the appropriateness of some clothes are avoided.
Australians are sports buffs like us. Their version of football - a cross between American football and rugby - is played without protective gear, though you would never know it from the way they play. Their games draw crowds like those at Buffalo's Rich Stadium. Australians love outdoor activities, such as hiking, skiing, and beachgoing. They watch predominantly American television shows and movies. They produce high-quality wines and hearty, good-tasting beers and make no apologies about how much of it they consume.
They do, however, treat drunk driving seriously. Victoria's legal standard for conviction for driving under the influence is half of New York's (.05 percent blood alcohol versus .10 percent), and at every pub gathering or dinner party there is invariably at least one designated driver. Random police enforcement, including roadblocks for breath tests, is aggressive.
If there is an observable cultural difference, it is that Australians seem to be more casual and fun-loving even than Americans. The work gets done, no question, but while it is getting done and afterwards, a more relaxed attitude prevails.
The Australian workplace is interchangeable with that of New York. I toured a modem fruit and vegetable processing facility, a just-opened munitions factory, an orchard and cold storage plant, a hospital, a winery, a number of retail stores, and several municipal offices. Their methods, technologies, and systems are identical to ours.
Until recently, labor unions were influential, and they still represent most Australian workers. Work rules, safety standards, and pay scales (adjusted for the difference in currency, which is about the same as the exchange rate for Canadian money) compare to ours. Today, Victoria, which is a bit larger than the two Carolinas combined, enjoys a stable population base, a varied and healthy economy, and strong democratic traditions.
Notwithstanding these similarities, since 1992 Victoria - and, to a lesser degree, all six Australian states, as well as the federal government - have been going through a period of dramatic government restructuring. Prompted by large state government deficits, costly and redundant local government bureaucracies, a depressed and discouraged private business sector, and powerful public sector labor unions, the state's conservative probusiness party (confusingly named the Liberal Party) aggressively challenged the ruling Labour Party and swept the state parliamentary elections in 1992. Taking office immediately, the new government began redefining state and local government at a frantic pace and has not looked back since.
In four years, Liberals have eliminated 50,000 jobs in state government (about 25 percent of the work-force); have consolidated 215 municipalities throughout the state into 78 new ones, thus deleting an estimated 25,000 more jobs; have mandated the reduction of local property taxes by 30 percent in 1996; have required local governments to adopt new, uniform fiscal years to be in sync with state government (and required them to operate for 15 months on 12 months' revenues in the process); and have put in place a complex set of laws mandating that by 1997 each municipality must offer for public bid up to half of the municipal services it provides.
The experiment has been a massive success in terms of economic development and government efficiency. This consolidation effort deserves careful consideration by our own state of New York and every other state in America.
In New York State, change will not come easily. We currently have more than 11,000 municipal fiefdoms, each with its own political elite, its own paid bureaucracy, its own constituency, and its own strong historic traditions. Typically, every local government body believes that it is the exception to the generally accepted idea that there is far too much government in New York State. Unlike the local elections of many states (including Victoria), New York's are partisan, thus making all local governments the turf of Republican or Democratic organizations. All of those factors compound the difficulty in mustering support for reform.
Perhaps the biggest obstacle, and the most ironic, is New York's strong tradition of single-executive state government. In a parliamentary system of state government like Victoria's, the legislative party in power automatically controls the executive branch.
Though I appreciate and value our own system with its checks and balances, when it comes to reforming local government we are handicapped. Because of this, we will have to work harder to achieve more modest changes than have occurred in Victoria.
On January 1, 1995, Victoria abolished its cities and shires, except for Melbourne. The state's office of local government appointed three-member commissions to serve as the policy boards (or city councils) for given geographic areas for a one- or two, year period. These boards were each empowered to hire a professional municipal administrator.
The administrator, who is accountable to the commissioners, could in turn hire a new professional staff responsible for the rank-and-file work-force (all of whose members had to apply for their positions). Typically, the commissioners have had broad experience in local government. In Shepparton, where my former host, Bill Jaboor, is the administrator, the chief commissioner is a former municipal administrator with 30 years of experience in a town to the north who has come out of retirement for two years. His two associates include a retired community college president from Shepparton and a former mayor of Benalla (about 40 miles to the east), who had served on Benalla's city council for 10 years.
In their two-year tenure, their charge is fourfold: to merge the government operations of four former communities, to meet all of the state mandates discussed above, to establish and fund a capital improvement program, and to provide for the orderly transition to an elected council in March 1997.
In Canandaigua's former sister city of Benalla - now part of the shire of Delatite, with a population of 25,000 and covering more than 100 square miles - the retired city clerk of Shepparton is serving as chief commissioner. In Strathbogie, another amalgamated community south of Shepparton, another former mayor of Benalla is serving as chief commissioner.
As might be expected, different communities are adjusting to the new structure with varying degrees of success. The personal qualities of the commissioners - their energy, knowledge, leadership, and ability to work among themselves and with their administrative teams - are pivotal. Shepparton is cited by state officials as a model of successful consolidation.
Three of Shepparton's department heads are former municipal managers who had lost their jobs during consolidation. Now directing the departments of public works, human services, and economic development, all three are proponents of what has taken place, even though they had to forfeit chief executive positions and, in at least one case, suffer a loss of pay, relocation, and the breakup of a marriage. Their experiences illustrate the human costs of reform, but even these department heads agree that in Victoria reform was both necessary and long overdue.
Most amazing to observe was the implementation of the competitive bidding of services, or CCT (compulsory competitive tendering). Adopted by state law at the same time as consolidation, CCT reflects a commitment to the idea that competition for the right to deliver services will provide the best services at the best price. All of Australia is emphasizing competitiveness. The management conference that I addressed in Melbourne had "Competing to Win" as its theme, and both government and business are applying bench-marking processes and quantitative analysis to virtually everything they do. Competition has replaced complacency and the spirit of entitlement that until recently ruled Australia's municipal marketplace.
A new field of professional expertise is emerging in Victoria. Each municipality now has a key executive responsible for the analysis of all work processes and for developing performance standards and bid documents for almost every function. In turn, private firms are retaining people expert in municipal government to respond to the flood of contracts being offered throughout the state.
Once a given service, like buildings and grounds maintenance, has been studied and bid specifications prepared, tenders are requested. The municipal employee group currently providing the service, any other neighboring municipal group, and private companies can bid for the work, typically for a three- to five-year period. The state audits the bid documents to ensure their fairness and impartiality; the most cost-effective (which, interestingly enough, is not automatically the cheapest) organization gets the work. On the day I arrived, a municipal crew from Benalla (Delatite) was doing street repairs in Shepparton. The week before we left, the public works department of Bendigo, a city of 75,000 people located two hours away, had lost its tender for street maintenance and would be laying off half of its workforce.
There are far-reaching, long-term implications to such a radical change. Personally, I would be uneasy about moving so far so fast in America. According to Roger Hallam, Victoria's minister for finance and local government, such major government restructuring is not for the indecisive, the complancent, or the fainthearted. Once started, the job must be finished. Hallam said that Victoria is just beginning, that some mistakes are inevitable, but that aggressive competition to provide municipal services is a permanent fixture in Victoria.
The weekend before we left for home, a statewide election in Victoria returned the ruling Liberal party to power for another four years on its promise to step up the pace of what had been happening since 1992. Against the protestations of organized labor, disgruntled former employees, and some municipal officials, the general public approved what had been done and provided a mandate for its continuation.
Comparison with the United States
How much relevance does Victoria's experience have for local governments like ours? Considerable. The people of Victoria are much like us, and just as they can adapt to real change in state and local government, so can we. Their cultural, social, and historical roots mirror ours, as does their modern-day society. Consequently, Americans should not be reluctant to examine the basic premises of local government delivery systems.
As an example, why do both county and municipal governments often serve a single area of manage, able size and population like Canandaigua's Ontario County (population 100,000)? It is common even in the United States, particularly in the western states, to find one local government serving an area the size and population of Ontario County. As far as that goes, how hard would it be to include neighboring counties as well? Victoria's experience shows that the average citizen will accept some inconvenience in exchange for reformed local government and reduced taxes. There seems to be a tendency on the part of elected officials to discount this fact.
Australians have shown that no individual is indispensable in government and that no one has a vested right to lifetime government employment. Practicality and good business sense, not politics, should be the motives in creating consolidated governments.
Consolidation cannot be a tit-for-tat process. Residents of a consolidated locality must see a more efficient bottom line. The resulting services will have to be both better and less expensive. But no system is perfect, and residents will see some apparent inequities (like rural residents' helping to pay for urban side, walks). The issue is not whether everything is perfect but whether on balance things are better.
William Bridgeo is city manager of Canandaigua, New York.…