Exactly one week after 77% of Clevelanders made Frank Jackson mayor of Cleveland for another four years...

Submitted by Norm Roulet on Wed, 11/11/2009 - 06:10.

Exactly one week after 77% of Clevelanders made Frank Jackson mayor of Cleveland for another four years, the strongly pro-Jackson Cleveland Plain Dealer's City Hall reporter Henry Gomez posted to his blog that a "Consultant's report suggests that Cleveland must cut jobs to remain financially sound". In his article, Henry referred to a 344 page report by Public Finance Management that, beneath all attempts at silver lining, offers chilling analyses of the organization, financial management and economic prospects of the City of Cleveland.

Some highlights of the innocuously titled "Management & Efficiency Study – Cleveland, Ohio" (download as .PDF here) include: "Cleveland faces a drop of over 50 percent in its capital program funding from FY2010 to FY2011; further reductions are forecasted for FY2012 and FY2013", "the City projects a significant budget deficit in 2010 if current spending is not adjusted to match the new revenue reality", and "the City will have to scale back services to which Clevelanders have become accustomed".

In other words, from mouths trying hard not to bite the hands feeding them: "While the consulting team of local government experts that prepared this report found a sound, competently-run government, the focus of this document is on areas where the City can move to the next level, improving service delivery in a new environment of severely-limited revenues."

And, if you need explanations for shortcomings: "Coincidentally, this report has been prepared during the deepest U.S. economic downturn in generations"... a standard disclaimer for just about everything, these days.

Note, nowhere in the report are there any references to Cleveland being at any specific "service levels" for any measured services, nor are there indicators of any current government services that will be taken to measurably higher levels through specific actions recommended in this report - this report largely addresses finances, without measures of services.

Regardless, the report concludes our good times are coming to an end, here in the really most impoverished shrinking city in America, despite our "sound, competently-run government"... especially considering no aspect of government in America is really sound or competently-run, these days.

$100s millions of generous federal capital improvement funds we've been receiving from Obama this year, and are scheduled to receive in 2010 and 2011, will dry-up to a trickle in the years beyond, with no back-ups in sight.

What, you didn't know these are the good ole days?

It may be timely to review the City of Cleveland Capital Improvement Budget for 2009 through 2013, as the city will burn through $1.2 billion in 2009-11 and have less than $400 million for the two years following, combined.

What are we getting for $1.2 billion, from 2009-2011?

How will the city operate on a fraction of that capital improvement budget, in the future - are we prioritizing planning in anticipation of that level of funding reduction... and have we planned what we will receive well.

If you didn't sense that the city is now spending at an historic peak of Federal funding riches, then you may be shocked when much of our capital funding for things like infrastructure and facilities disappears, and we have $100s millions less a year to spend on keeping this dying city together.

But the future of Cleveland is far worse than receding capital funding for crumbling infrastructure and facilities, alone, as the consultants address in analyzing our General Funding.

They conclude, the City of Cleveland's future adds up to not enough revenues and too great of expenses... especially for the city workforce and their medical benefits, pensions, and overtime. We need to reduce services and other operating costs and negotiate lower cost contracts for 1,000s of employees, and their benefits, with 30 unions and many vendors.

And, the consultants conclude, we need to reorganize city government. And consolidate. And regionalize. And Outsource. And, of course, hire many more consultants.

These consultant offer 175 preliminary recommendations for straightening the City of Cleveland out, and are honest in saying: "Many of these recommendations will likely be unpopular – in order to live within its new, diminished means, the City will have to scale back services to which Clevelanders have become accustomed.  Becoming more efficient and effective in the current economy will not just mean eliminating waste, it will require the City to think creatively about sharing services with its suburban neighbors, changing long-standing assumptions and rules, and even ending some cherished programs for the public."

That is the work of consultants... delivering very bad news Mayors are unwilling to deliver... doing hard work Mayors are unwilling to do... being unpopular.

Bottom line, citizens of Cleveland are about to get fewer city services, be charged more fees and fines, and live through the transformation of city hall finally cutting its losses, firing employees, restructuring government, closing and selling facilities, updating systems, and God knows what else will be necessary to survive in the leanest times ahead, now that we've spent down our rainy day funds and planned away our Federal stimulation for the foreseeable future.

This report appears well thought through and expert, although many analyses and recommendations are preliminary and barely scratch the surface in uncovering the facts necessary for restructuring the City of Cleveland. The authors acknowledge, in the introduction, "The recommendations in this report are meant to be a starting point for preparation of the FY2010 City budget and for discussions about how to meet continuing financial challenges into 2011 and 2012."

Our starting point is the realization we have to restructure and better plan Cleveland by $100,000,000s per year, for as long into the future as we dare look, and we are just really hearing about it now.

These consultants propose their recommendations may yield for Cleveland in the area of $700,000,000 in financial benefits, over 5 years.

Based on a quick read of the report - especially revenue and expense projections - I'd say we'd better shoot for a cool $ billion in such city government reorganization benefits, and plan to hire lots more consultants immediately, to get us there.

The report is broad and sweeping, presenting 5-year projections of revenues and expenses for the city, and cost saving ideas for the different city functions, services, and departments.

The authors begin by recommending comprehensive reorganization of the entire structure of city government, departments and services, and reduction and reallocation of city workforce.

Regarding workforce - by far the largest component of city general fund costs - the report details union contract concerns and negotiation issues, and concerns with benefits and pensions, with recommendations for approaches to cutting workforce-related costs, which city employees and union sympathizers in general may have wanted to know about before voting for their mayor, this year.

The consultants report revenue shortfalls are going to be a big problem, in the years ahead. Income tax revenues - property tax revenues - fees - licenses - collections - all revenues are tightening or declining and expected to remain poor for the foreseeable future. Even Cleveland's one revenue bright-spot, the red-light cameras, seem to have peaked in payout...

The report makes obvious recommendations to increase revenues, like increasing fees and fines, and accelerating collections, but does not propose silver bullets... no mention of likely further Federal stimulation or casinos saving the day, any time within the five year vision of this planning.

Mostly, the report suggests, employees will lose job security and pay more for limited benefits, and citizens will lose services, and pay more for limited services, like fees for public pool use during the summer, or they may see such public services eliminated entirely.

Like with everything else planning-related in Northeast Ohio, there is reason to distrust the process of the development of this report, and its recommendations. 

There is especially reason to distrust the timing of the release of this report, one week after the Mayor, who sponsored the report, has been reelected.

There is no information about the specific people involved in this consulting engagement and report, including on any local experts involved in the effort. There is also no information about exactly who in city, county and regional government, and outside government, was interviewed in collecting information or preparing recommendations. I'd like to see a complete list of analysts, sources and authors.

There is reference to benchmark subjects, but no explanation of any benchmarking processes in use, or data warehouses assembled.

Most important, there is no discussion of external service levels. Service comes at a price, but you may not manage what you do not measure - we have no indicators of current services per dollar, or what service level impacts will result from cost cutting or reorganization, for good or evil

I have not seen reported how much this consulting effort cost, who funded this, when it was contracted, how Public Finance Management was selected as the consultant, and how it was decided to deliver this report in this way, on this day.

The City of Cleveland website does not seem to provide any of these details... let me know if I am missing a portal.

I do not recall the public being consulted in preparation of this report.

I do not recall seeing reported to the public any preliminary findings of this consulting effort, but I assume there have been drafts and partial findings provided to city representatives and others participating in this analytic initiative.

The public should have been informed how dire are the finances and economic prospects of the City of Cleveland, all throughout this analytic process, and we are now entitled to know to whom such insight has been provided throughout this consulting process, which occurred well before the recent Mayoral election and release of this final report.

Basically, how long has who know how bad are our finances?

We must now determine how trustworthy is Public Finance Management, this effort, and its conclusions.

It is clear the public is just being brought up to speed on the poor state of our city finances, long after informed insiders have had the opportunity to consider expert analyses like found in this report. The citizens lost the opportunity to consider making leadership changes at City Hall, for the next four years, as a result.

This report brings the citizens of Northeast Ohio very bad news, and seems in bad faith.

Now, we must act on this information. I encourage you to review this report and offer your observations here.

City 5-year plan etc. File a request

Norm--the money put towards "planning" in the 2009 five-year plan is staggering.  Outside consultants are cleaning up.  Look how many times we have paid for waterfront plans.  I can't be certain, but even the five year plan looks like it was outsourced.  The numbers don't make any sense and the report even admits the fact in the introduction, predicting unrealistic general obligation funds revenue. 

I can't breathe sometimes.  It all makes me so mad.  I went last night to "see" how the CDBG funds have already been allocated for 2009-2010, but they won't tell us.  And so  it goes.  File your public records request...

Great discovery and discussion

This is a great discussion; thank you for publishing it. I think that everyone more or less took for granted that Jackson had kept our city's financial house in order and used that assumption to head off any real debate about regime change (not that there would have been much anyway, I suppose.) We obviously should have asked more penetrating questions about our city's long-term financial planning and health.

Cleveland destruction

And I thought the Mayor had all of this under control.  Ha Ha.... What a joke...It is what it is.,,, and only going to get much worse.

where's the tax holiday map?

Roldo has been making this point for decades. Let's see the map of Cleveland with the opportunity cost tax holiday parcels on it. How much real estate are Cleveland taxpayers supporting while others slip under the wire? How many of these "savings" would be funded if Gateway, Brown's Stadium, Rock & Roll, Great Lakes Science Center, Cleveland Museum of Art, Cleveland Orchestra, CWRU, Cleveland Clinic, University Hospitals - not to mention the numerous term limited tax abatement deals. How much would there be if as Mike White said - there's gonna be a great pot of gold at the end of this when these properties begin to pay tax (though Gateway, Brown's Stadium and those two architectural anomalies at E9th and the lake won't ever pay).

I recall asking a friend about that when it was going down - tax abatement. Why should this new development be tax abated while the neighbor's property is not? He said, "When the 15 years is up, the value of the neighborhood will have increased and that new home owner will begin to pay back to the city in spades." I guess they just didn't see the big exodus coming. What would city coffers look like if our elected officials had not chosen to make the city a donut of poverty with longtime residents supporting new ventures that are essentially playgrounds for exurbers and their guests? (Until Bruce Akers begins to pay tax in Cleveland, I am done with hearing him quoted in the press on such issues as medmart, county corruption and economic development. Pick another voice, Mike Roberts)

We talked about regionalism - that's over now apparently. We had our Voices and Choices and Cleveland Next and blah, and blah and finally one voice came on WCPN one morning - a lawyer, former port authority Chairman, Michael Wager from Squire Saunders and said it is a culture of benign complicity - go along to get along. Our own Laura McShane was on that show as was Roldo and they pointed to the frustration of living in a city, in a county where benign complicity has been the norm, where TIFFs and bribes and forgoing taxes and dismissing PILOTS and letting the wealthy skate on contributing has been the modus operandi for years.

There used to be talk of getting out of Cleveland, but those of us who remain may be trapped now that the decay that has spread from sea to shining sea has become reality.

Mayors and council persons and commissioners and auditors and building inspectors and state highway officials and many more have been going along and getting along too long. What would coffers look like if they had been paying taxes, had not cheated, lied and placed bets on long shots with our tax dollars? That would be interesting to know. Those are demonstrations in which I'd participate. I'd hold a sign that says - "_____ (fill in the blank) Pay your fair share NOW!"

What if they just spent the $ billions better

In the eight years minimum Frank Jackson is expected to now be mayor, he will spend around $10 BILLION in taxpayer money - about $1.2 billion a year and shrinking. Imaging what a great leader could do with $10 BILLION in just little shithole Cleveland!

How long have the same people been leading Cleveland into the ground, while spending $ BILLIONS in public funds per year here?

I really don't think citizens realize our leaders here are being given $ BILLIONS to spend...

People you wouldn't send to the grocery store to shop for your mother, or trust to babysit your children, are given $ BILLIONS to spend.

Where they hell are the results?

Disrupt IT

Meaning around $63 million per councilmember per year

If the Cleveland city budget is around $1.2 billion per year, and there are now 19 councilpeople, we are entrusting to each of these coucilmembers responsiblility for a $63 million share of our finances.

Do you think they act like people responsible for spending $63 million of taxpayers money per year, each?

Do each of them represent and spend your $63 million well?

Disrupt IT

moving along sort of?




$63 million per ward, then without data you really have trouble allocating costs across all the functional boundaries that overlap. The schools have one district not 19, do they differentiate cost by ward? Then you have police and five districts that overlap, some have stations and others do not.

Pop 479,000

Budget $1,200,000,000.00

The city spends $2,500.00 per capita?

What’s the median income and what the median home value? You fund the city with income tax and property tax do you pay more or less then $2,500.00 a year?

It all calls for regionalism and common systems that prove values that prove the numbers. Then that can only be done with functional districts that can be measured. If you get intergovernmental funds then that must be used to improve the metrics apposed to subsidizing short comings.

How many individual parcels of land are the in the city? I really do not know but the county has about 500,000 parcels. Each parcel should represent both revenue and expenses. Even if it is just to say that the cost of road maintenance for a district divided by the number of residents or parcels. That’s a way to see comparatively, and to see if we are being efficient and looking at all the variables.

I said it before that if an area has heavy loads passing through it the roads need to be repaired more often, that would drive up costs. Clustering industry closer to the interstates would shift road cost off the municipality. Then two many bus routes tear up the roads, that’s why they have concrete slabs at the stops. They tear up the roads.

I keep talking about stratifications and functional levels, its about that its about intelligent systems that see costs and assign them, its about comparative bench marks across districts.

The county has the parcel data set it is primary it needs to have individuals assigned to it. It needs tags it needs linked relational data thats the technology solution thats the common system that the entire region needs.

Then each district has income and expenses, it manages creatively within its boundaries. The township boundaries are ideal for that and large and diverse within each.

One small metro district which would be the central offices and it pays the bills for all the central administration. The data ware house the central purchasing, the accountancy all centralized. But budgets would be based on the real actual revenue derived within each district. Then each could petition for funds from intergovernmental sources, the state funds and the federal funds. When they do they would have to have a plan and the results would need to be proven.

The district should be for statistical purposes first, and respect the legal existing municipalities they represent within them. This could be achieved by centralized income tax services. Every person fileing one return that could be for all income; federal, state and municipal. It would require a parcel number as your legal place of residence. Then the tax rate applied based on were you live and were you are employed. The fact that were you are employed and live affects your rates then it would also propagate the data.

Then parcel would have metrics and that the data that is needed to build the analysis.

From a functional perspective then you have these large district, that have money being spent on them. ODOT spend money within each and the county as well, that could be assigned to that district and could even be made contractual. One company within each maintaining all the roads and bridges. That could be made more affordable, because they would have the incentive to make it last longer and be more durable. Then it goes back to traffic and weight as in loads, then it gets into rail as a way to move things around. It gets into waking districts and consolidation and clustering.

Then you have needs, based on very accurate demographics, education, health services etc. Even into licensing as to not allow commerce to be over built. That also is related to taxes as the county derives revenue in sales taxes. So every item bought or sold is and should be accountable as sales tax within a district and come back to that districts operating budget.

Properties need to be to categorized they are all tax bases. Residential, commercial, industrial, public etc.


The report draws functionality as a key and that what we need to address.

Its not that planners are not needed, they are it is that we really need programmers that create the software and then copyright it. The data storage and security and interfaces cannot be bought they do not exits. They need to be built on open face platforms then customized and patented.

The shift should be from clerical to that of services, contracted privately, with defined areas and then comparatively bench marked. If it cost more in certain area then that factor which is causal addressed and removed.



Thanks, Norm

Thanks, Norm, for the posting (well done) and links. I skimmed through the consultants report, but it will take a long to really read it well. Of course, we all know that council is a rubber stamp for the Mayor. That is why I can't get real excited about the breakdown per member as it is just rubber stamping unless the people who live in this city wake up and make it otherwise. That may happen when people have to pay a fee to get the weekly trash hauled away. 

The $63 million per councilmember is a mental exercise

Close your eyes and picture any of your councilpeople with control over $63 million in your checkbook. Picture Jackson with control of your $1.2 billion. Are they who you would chose to spend that kind of your real money?

That is alot of money and responsbilility involved with leading Cleveland, even if it is not usually line item personal responsibility.

In many cases and ways, it is.

Read through the recommendations for ones that especially interest and impact you - give them your expert evaluation - I am looking more closely at the Information Technology and Public Health recommendations.

If each of us pick several of the 175 recommendations, we will be a well informed expert stakeholder task force on the report and implementation, and that is what is needed next.

Disrupt IT

Save yourself

The printing costs...Cleveland Public Library's Public Administration Library prints out these reports, catalogs the reports and makes the information available  to the public.  Call 216-623-2919 for more information.