PM2 CONNECTIONS
PERFORMANCE MEASUREMENT
& MANAGEMENT
Becoming a Data-Driven Organization
City of Peoria, Arizona
By Peter Christensen and Katie Gregory
The City of Peoria
has been refining
a useful tool
for making
budgetary decisions
and promoting
accountability
throughout
the organization.
he City of Peoria, Arizona, is
no stranger to performance
management. For years, the city
has worked to refine a system that
has become a useful tool for making
budgetary decisions and promoting
accountability throughout the organization. The city has received recognition
for its efforts from the Government
Finance Officers Association’s Distinguished Budget Presentation Award
Program and from International City/
County Management Association (ICMA)
Center for Performance Measurement.
Still, Peoria has a long way to go to
connect all the dots of its strategic planning and performance measurement
systems and become a truly data-driven
organization.
T
PEORIA’S NEW REALITY
Stretching across 176 square miles in
the northwest corner of the Phoenix
metropolitan area, Peoria is a full-service municipality with a population of a
little more than 150,000 and a general
fund budget of more than $150 million.
Peoria operates under the council-manager form of government, with a mayor
elected at large and six council members elected from geographic districts.
The city manager oversees more than
1,100 employees in 14 departments.
Peoria is known for quality schools
and well-planned residential neighborhoods. The community also offers
outstanding recreational amenities,
including Lake Pleasant (Arizona’s second largest lake), the Peoria Sports
Complex (the spring training home of
the San Diego Padres and Seattle
Mariners), and the award-winning Rio
Vista Community Park. The hotels,
restaurants, and automobile dealerships surrounding the sports complex
form an entertainment district that is a
major source of revenue.
During the first decade of the new
millennium, Peoria was one of the
fastest-growing cities in Arizona and
the United States. The city’s growth
spurt came to a screeching halt in
2008, however, with the onset of the
housing crisis and recession, and
growth-related revenues have all but
dried up. Like other Arizona cities,
Peoria is highly dependent on sales and
income taxes (the state shares sales
and income taxes with cities and counties), which have also fallen off dramatically over the last two years. Almost
overnight, the growth focus that had
dominated Peoria and its neighboring
communities for so many years gave
way to an entirely new reality that
would require creative thinking and
innovative management tools.
PERFORMANCE MANAGEMENT
IN PEORIA
Early on, Peoria’s leadership embraced performance management as
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57
an important tool for managing programs and services and for allocating
city resources. The city has incorporated the recommendations of the GFOA,
ICMA, and other leading organizations
into its performance management program. For example, performance measures are organized by program areas,
are based on service goals and objectives, measure outcomes as well as efficiency and outputs, and are reported
over a three-year timeframe.
Some departments and programs
lend themselves more easily to performance measurement than others.
The most effective programs use performance measures and the associated
program descriptions, goals, and objectives to tell a story. For these programs,
an outsider would be able to pick up a
performance report and quickly understand their purpose and key functions,
and form opinions about whether they
are achieving desired outcomes in an
efficient manner. Many of the organization’s successful programs have incorporated satisfaction surveys to measure the extent to which outcomes are
being met in the eyes of their customers.
The city has taken an active role in
comparative performance measurement, or benchmarking. Since 2005,
Peoria has participated in ICMA’s
Comparative Performance Measurement
Program with some 150 other cities
across the country. Recognizing the difficulties inherent in benchmarking,
namely the need to normalize data in
order to facilitate meaningful assessments, the city nonetheless believes
there is value in comparing performance across jurisdictions.This is partic-
58 Government Finance Review | April 2010
ularly true when comparing cities in
the same state or region. As such,
Peoria is one of 11 cities that participate in the Arizona Consortium. The
consortium focuses on sharing core
service data and provides an opportunity to follow up on service delivery
techniques that have proven to be
effective, efficient, and successful.
The most effective programs use
performance measures and the
associated program descriptions,
goals, and objectives to tell a story.
The collection and reporting of good
performance data is the foundation of
a useful performance management
program, but not the end thereof.
Unless this information is used to make
decisions about resource allocation
and service delivery, it is really little
more than window dressing. Although
Peoria still has a long way to go,the city
strives to integrate performance data
into its decision making.To date,Peoria
has been most effective at incorporating performance data into the annual
budget process. Executive leadership
and city council members are given
performance information during their
budget sessions,and they often use this
information in their review of funding
recommendations.
Faced with a substantial budget
deficit and the need to adapt to a new
revenue base in a slow-growth environment, Peoria’s leadership has emphasized a new way of doing business that
relies heavily on performance management concepts. The focus of this effort
has been to deliver core city services
as efficiently and effectively as possible
by aligning resources with strategic
goals and using performance data to
measure the results. To this end, Peoria
has completed a citywide organizational restructuring and developed a
new organizational strategic plan
based on city council goals and citizen
survey feedback.
As part of the ongoing fiscal 2011
budget process, each department was
charged with developing a department
operating plan. The purpose of these
plans is to encourage departments to
think strategically and align their service activities and resources to achieve
program and organizational goals.
Each operating plan is supposed to
include a department mission and
vision, discuss council and organizational priorities that influence their
operations, describe the key functions
of the department, identify the desired
outcomes of each key function, and
estimate the resources needed to
achieve those outcomes. Peoria’s management team is using these plans to
balance the 2011 budget and make the
difficult decisions required to do so.
LESSONS LEARNED
Through years of trial and error,
Peoria has learned several important
lessons in implementing performance
measurement in a local government
organization.
An Incremental Process. Effective
performance management systems do
not happen overnight, nor is there a
mile marker to indicate that your orga-
nization’s system has “arrived.” An effective performance management system
incorporates the basic elements identified by the GFOA and other leaders in
the field, and is constantly evolving
and adapting to the changing needs of
your organization.
tion to skew performance measures by
creating an environment that emphasizes continuous learning and
improvement, and does not punish
those who fall short of their targets.
Flexibility Is Key. Not all performance measures are created equally, nor
should they be. Flexibility from department to department and program to
program is both necessary and desirable. Don’t fall into the trap of forcing
your entire organization into the
same mold. Whatever technology you
use to collect and report on performance measures should be sufficiently
flexible to accommodate different
approaches.
Flexibility from department to
Rightsize your System. When it
comes to performance measurement,
less is often more. Don’t measure or
report on things that are neither meaningful nor useful, particularly if you’re
doing so just for the sake of impressing
people with the sheer volume of information you can collect. This approach
often backfires, overwhelming stakeholders to the point of undermining
the entire effort. Know your audience
and tailor your reports to the different
needs of different stakeholders.
Don’t Punish Honest Reporting. It
should come as no surprise that some
departments attempt to manipulate
their performance measures to make
themselves look good. Obviously, such
behavior undermines the integrity of
the entire system. Auditing is one way
to keep data manipulation in check,
but it is costly and time consuming.
Leaders can often remove the motiva-
department and program to
program is both necessary and
desirable. Don’t fall into the trap
of forcing your entire organization
into the same mold.
Wanted:Organizational Champions.
It sounds clichéd, but it’s difficult to
imagine a successful performance
management system that does not
have the full support of the city manager or administrator. Lacking this imperative, few departments will invest
the energy and effort needed to do
performance measurement justice.
Finding individuals within the departments who believe in performance
measurement and will champion the
cause among their co-workers can be
the difference between a satisfactory
system and a truly effective one.
COMING SOON: PEORIASTAT
Even though Peoria has been successful in using performance measures
in the budget process, it has struggled
to keep performance measurement relevant once the budget process has
concluded. A number of departments
do a good job of using their performance measures to manage programs
and services, but there is little emphasis on performance measurement on
a citywide level outside of the budget
process. To remedy this and to
incorporate performance measurement into the city’s larger strategic
planning
and
decision-making
processes,the city is preparing to begin
a new performance initiative known as
PeoriaStat.
As it is currently envisioned,
PeoriaStat will involve monthly performance reporting by departments
and regular review sessions. These
review sessions will occur monthly,
with each department participating at
least quarterly. The department head
will meet with the city manager, the
two deputy city managers, and the performance measurement coordinator to
go over the department’s key outcomes.The intent is not to belabor the
minutiae of performance measurement, but rather to act as a catalyst to
continuous improvement through regular evaluation of programs and services important to city stakeholders. ❙
PETER CHRISTENSEN is a senior budget
analyst for the City of Peoria, Arizona,
where he coordinates the city’s capital
improvement program. He holds a master’s
degree in public administration from
Brigham Young University’s Romney
Institute of Public Management. KATIE GREGORY is a budget coordinator for the City
of Peoria,Arizona, where she leads the city’s
strategic planning and performance management efforts. She holds a master’s
degree in public administration from
Arizona State University’s School of Public
Affairs.
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