Revenue Rank: 20
Form of Government: Mayor-Council
Mayor: Paul Schell (took office 1998)
City Council: 9 members, elected at large
FINANCIAL MANAGEMENT: B+
Seattle is one of the few large cities that has moved to a biennial budget. This started in 1995, and has apparently been working well.
Seattle has solid contingency funds, including a rainy day fund and a $20 million disaster fund. Debt and investment policies are strong, and revenue forecasts usually are well done. Managers are given a fair amount of flexibility to transfer funds within program categories. A newly installed financial management information system will help in a variety of ways — most notably addressing a need for better cost accounting in the city government.
For all the sound moves it has made, however, Seattle currently faces a huge obstacle: Initiative 695, passed by Washington voters last November (although it lost in Seattle), outlaws the graduated state motor vehicle excise tax and requires voter approval for all future tax increases, defined broadly to include all fees. This has sucked $16 million out of the general fund in the 2000 fiscal year. Seattle’s situation isn’t as bad as the one facing several other cities in the state, but it isn’t happy news here, either. Absent the courts declaring the initiative unconstitutional, the immediate fiscal future seems certain to be a troubled one.
HUMAN RESOURCES: B
Seattle’s managers have a great deal of discretion in hiring, without complex rules tying their hands. Speed of hiring varies from department to department. Applications are accepted continually and scanned into a citywide Talent Bank, from which departments can request resumes. Centralized testing is required only for police and fire fighters.
Seattle has had a “pay for performance” program for managers and strategic advisers, but was forced to go back and adjust it this year. The problem was that performance bonuses were given routinely to almost everyone in the program. The new recommendation, although not a rule, is that departments limit performance-based incentive pay to about 40 percent of those eligible.
The most significant human resources weakness here is a lack of formal work force planning. “It’s on the agenda, but hasn’t gotten to the top yet,” says Norma McKinney, Seattle’s HR director.
INFORMATION TECHNOLOGY: B
Seattle’s new financial management information system came in $1.5 million under budget and has been generally well received. Its human resources system is also a strength.
There isn’t much central control over system development in Seattle, but there is a high level of oversight, and the city has made good progress in improving its strategic planning. Departments can’t go off on their own to purchase any significant equipment that hasn’t been reviewed. In another effort to make sure it’s spending its money effectively, the city has been trying to cut down on an overabundance of contracts. “It’s been easy to purchase,” says one official, “but not necessarily wisely.”
Seattle’s Web site is terrific in terms of information offered, but still behind where it should be in allowing citizens to conduct transactions.
CAPITAL MANAGEMENT: B+
The capital planning process here is state of the art. It includes strategic elements and goes far beyond the typical shopping-list mentality. The players — budget office, mayor and council — work together from the early stages of a project. Particularly useful has been a fiscal note process attached to all major capital projects. It forces managers to look at the operating impacts of building efforts.
Seattle is an innovator when it comes to contracting. For a new water-filtration system, for example, instead of hiring separate architects and contractors and then running the facility itself, it contracted out the entire deal to one firm, saving an estimated $50 million.
The city started to track conditions on non-arterial streets last summer. A pavement management system is used, providing reliable data. Unfortunately, although infrastructure is improving, needs far outstrip available funding, and the city mainly tries just to “stop the bleeding.”
For other assets, departments develop their own condition assessments, but with similar practices. All major departments also have their own maintenance plans, although they vary in quality. Decentralization here loses some efficiencies of scale that could be achieved if departments shared carpenters, plumbers and other maintenance employees.
MANAGING FOR RESULTS: B
Seattle maintains a Strategic Planning Office whose director reports to the mayor. The office develops long-term strategic policies in such areas as transportation, human services, neighborhood planning and education.
A 20-year Comprehensive Plan, focusing on safety, social equity, growth management and economic opportunity, is currently being updated. The last version, developed in 1994, provided long-term goals but wasn’t a full strategic plan.
In June 1998, a new program was created to lead the effort to develop results and measures for departmental goal statements. The early stages of the program have been sensibly devoted to establishing reliable baseline data. Targets are set, and the city is committed to holding departments accountable for achieving them. Last September, the first report on results, as informed by performance measurements, was presented to the council. In June, they’ll take the next step: integrating results with operations.
This effort has teeth, as the budget office has decided to use the measures to make decisions. “We’re creating a budget process that will be focused around this results framework,” says the city’s budget director.
AVERAGE GRADE: B
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