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

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 [1]". In his article, Henry referred to a 344 page report by Public Finance Management [2] 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 [3]) 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.