433 - urban services - published

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URBAN SERVICES POLICY AND RESOLUTION A:Core City services not articulated;

30-year-old commitments obsolete

March 2013

LaVonne Grif n-ValadeCity Auditor

Drummond KahnDirector o Audit Services

Ken GavettePrincipal Management Auditor

Of ce o the City Auditor

Portland, Oregon


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Production / Design

Robert Cowan

Public Inormation Coordinator

URBAN SERVICES POLICY AND RESOLUTION A:Core City services not articulated;


March 2013

LaVonne Grif n-ValadeCityAuditor

Drummond KahnDirector oAudit Services

KenGavettePrincipalManagementAuditor

Of ceo theCity Auditor

Portland,Oregon


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March 26, 2013

TO: Mayor Charlie HalesCommissioner Nick FishCommissioner Amanda Fritz

Commissioner Steve NovickCommissioner Dan Saltzman

SUBJECT: Audit Report Urban Services Policy and Resolution A: Core City services not articulated;

30-year-old commitments obsolete (Report #433)

Adopted in 1983, the general intent o the Citys Urban Services Policy and Multnomah Countys

Resolution A was to ensure the ef cient use o limited local resources by having each jurisdictiondeliver those services that drew on their respective strengths. These documents were essentiallyormalized through an intergovernmental agreement (IGA) signed by both entities in 1984.

The attached audit ound the IGA does not provide enough specicity to work in todays governmentenvironment and does not provide, as some appear to believe, a comprehensive listing o the Cityscore, basic services. Moreover, even i core services were ully spelled out, some o the commitments

reected in the IGA may no longer align with contemporary social, demographic, and economicrealities.

Inter-governmental cooperation is as important today as it was thirty years ago, but it is past time

to revisit the service commitments made in 1983. We recommend that the City, County and otherlocal government partners work together to develop a division o services that reects moderngovernment activities and public expectations, building on the expertise and unding capacity o

each and clearly identiying roles and responsibilities.

We recognize this report primarily reects the perspective o the City o Portland. As such, manyo the examples and support or our recommendations ocus on City services. Multnomah County

of cials could likely provide examples rom the Countys point o view.

We ask the Mayors Of ce to provide us with a status report in one year, detailing steps taken toaddress the recommendations in this report. We appreciate the cooperation and assistance we

received rom City of cials and their stas and all those in the various bureaus we spoke with.

LaVonne Grif n-Valade Audit Team: Drummond KahnCity Auditor Ken Gavette

Attachment

CITY OF PORTLAND

Office of City Auditor LaVonne Griffin-Valade

Audit Services Division

Drummond Kahn, Director

1221 S.W. 4th Avenue, Room 310, Portland, Oregon 97204

phone: (503) 823-4005

web: www.portlandoregon.gov/auditor/auditservices


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Clear priorities and articulation o core City services can help Coun-

cil choose between competing programs vying or scarce resources,

prevent duplication o services with other governments, and hold

appropriate levels o government accountable or the programs they

oversee.

Not having a rm understanding and agreement on basic City re-

sponsibilities inhibits the internal decision-making process and may

also contribute to inef cient service delivery between jurisdictions.

Thirty years ago, to address these potential issues, the City o Port-

land and Multnomah County documented their largely aspirational

commitments to provide particular types o services within their over-

lapping jurisdictions. City Council approved its Urban Services Policy

in February 1983, and the County Commission passed Resolution A in

March 1983. Both entities ormalized their commitments through anintergovernmental agreement signed in August 1984.

We ound that these three key documents cannot be used in most

cases to obligate either party to perorm specic services, nor do

they clariy each jurisdictions core services. The lack o well dened

denitions or service areas was urther compounded by signicant

changes to local demographics, service boundary areas, program

responsibilities, and other actors that occurred over the course o the

30-year period.

During dif cult economic times, City leaders may decide to reduce

or even eliminate unding to programs that are possibly outside the

Citys primary responsibilities or which may be better provided and

nanced by another government. But to ocus its limited unding on

core services, Council must rst identiy those core services.

URBAN SERVICES POLICY AND

RESOLUTION A:Core City services not articulated:


Summary


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Urban Services

Audit Results

The City and Countyintended to divide

responsibilities in 1984,but the agreement is

now obsolete

We also ound:

1. The City Charter and State statutes do not specically list

responsibilities.

2. The City mission and goals in the budget are so broad as tocover all livability issues, and they provide little help in setting

spending priorities among competing goals and with limited

resources.

3. City elected and bureau of cials have a general notion o core

services as being police, re, water, sewer and transportation.

4. The Portland Plan oers an updated division o

responsibilities among local governments, but it is also

aspirational and may not be as useul as a guiding document

or core services.

We recommend the Mayors Of ce:

1. Work with City Council to develop, document, and adopt a

clear listing o City governments basic responsibilities.

2. Work with the County and other local jurisdictions to develop

and implement updated and broader versions o what is

contained in Resolution A and the Urban Services Policy.

We ound that the 1984 intergovernmental agreement (IGA) with the

County, which initially sought to divide many duties between the two

governments, is not a viable document that can be used to identiy

core services. Further, it cannot be used to obligate either party to

perorm particular services as initial terms were not well dened

and social and economic changes since 1984 have diminished its

useulness.

Urban Services Policy and Resolution A - BackgroundEach year, the City o Portland enters into many contracts or services

with other governments (called intergovernmental agreements, or


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IGAs). Some IGAs are used to purchase direct services rom other

governments. Some are used to support programs that seem to be

benecial to City goals and priorities.

A primary IGA with Multnomah County, executed in 1984 and otenmistakenly reerred to as Resolution A, is sometimes cited by local

government of cials and in the media as the seminal document that

divides responsibilities between City and County government. While

that was the intention o the agreement, it was limited to just those

two participants. In the intervening years, local government has tak-

en on an expanding role in areas such as housing, the environment,

transportation and the economy, rendering the original agreement

less useul as a public policy document. Nonetheless, it is still impor-

tant as a ramework or discussion o intergovernmental cooperation.

The two key documents that led to the IGA were the Citys Urban Ser-

vices Policy, approved in February 1983, and Resolution A, adopted

by the County in March o 1983. These led to the IGA, adopted by

both parties in 1984.

The primary purposes o the agreement were two-old. First, it rec-

ognized the act there were many people living in unincorporated

Multnomah County who needed urban services that could more

ef ciently be provided by the City. This was addressed in both the

Countys Resolution A and the Citys Urban Services Policy.

The agreements second purpose, as stated in Resolution A, was to

address nancial problems o the County. The resolution stated the

County was acing a $14.5 million shortall which threatened what

it considered its core services o assessment and taxation, elections,

corrections, libraries, and health services. Resolution A proposed the

City concentrate on police services, neighborhood parks, and land

use planning, enabling the County to reduce unding in those specic

areas.

The 1984 IGA urther listed Urban and County services as shown in

Figure 1.


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Urban Services

Figure 1 Key documents and elements relating to implementation o

Resolution A and the Citys Urban Services Policy

Source: Audit Services Division document review

General need to provide

urban services tounincorporated areas

Specically mentioned

WaterSewer

150,00 people in

unincorporated UGB,County acing $14M

shortall

County priorities

assessment & taxelections

correctionslibraries

Health services

Municipal services

not limited toPolice

neighborhood parks

land-use Planning

Municipal services best

done by City

County concentrate on

human servicesjustice services

librariesand other County-wide

Urban services

not limited toPolice

Neighborhood parks

TransportationSewers

WaterFire service

Land use planning

Urban Services Policy Resolution A Intergovernmental

AgreementAdopted by City Adopted by County Signed by City and County

February 1983 March 1983 August 1984

Some initial terms not well dened

The nal IGA called or a general division o responsibilities between

the City and County. Contrary to what appears to be the widely held

view, it does not provide a comprehensive list o services the City or

County should provide.

Figure 1 shows a listing o key elements o the Citys Urban Services

Policy, Resolution A, and the nal IGA which implemented those two

documents. It also illustrates the conusing and open-ended nature

o some o the language used in each document.


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County services in particular are broadly listed and dierent terms

are used in the documents. We may assume that health services and

human services are roughly equal, as are corrections and justice

services, but specic denitions are not provided.

Likewise, the use o the phrase not limited to and other implies an

open-ended description o services. This ambiguity also makes the

documents less useul in clearly listing each governments responsi-

bilities.

Some services such as transportation, sewers and water were suf -

ciently dened, however, and that specicity has been useul over the

years.

Importance has diminished over timeAt its creation in 1984, the IGA, and the subsequent agreements,

were good eorts toward delineating responsibilities o the City and

County. However, the environment in which local government oper-

ates has changed substantially since 1984. Property tax limitation

measures in the 1990s challenged local governments to nd new

ways o unding programs and in some cases, pit one government

against another or limited tax dollars.

Examples o some important environmental changes include:

Increased interaction between police and the mentally ill- City and

County roles in this area have changed signicantly in recent years.

The agreement originally called or the County to ocus on Human

Services. But mental health unding cuts by the State has orced the

County to try and ll that gap.

In Portland, a recent U.S. Department o Justice report noted that

the lack o a comprehensive community mental health inrastructure

oten makes law enorcement agencies the rst responder to persons

in a mental health crisis. This is happening with increasing requency.

The result is that Portland Police are now playing a role in the men-

tal health system. Programs such as the Mobile Crisis Unit represent


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Urban Services

ventures by the City into unctions originally envisioned or the

County in the agreement. In a settlement with the U.S. Department

o Justice, the City pledged to expand the Mobile Crisis Unit to all

precincts and to institute a specialized Enhanced Crisis Intervention

Team to complement existing crisis intervention training.

Increased numbers of school-aged children requiring after-school

activities - The need or extra-curricular activities or school-aged

children has increased as the number o two-earner amilies and the

percent o children living with a single parent have increased.

Nationally, the percent o children living in two parent households

declined rom 85 percent to 73 percent between 1970 and 1990.

Likewise, the number o two-earner amilies has increased almost

40 percent rom 1980 to 2011. As a result, the U.S. Department

o Education estimates that between 5 and 15 million school-age

children are let alone at home each week.

To address this trend, the City and County joined with the State and

local school districts to oer ater school options or children through

the SUN Community Schools program. The program was built upon

the Citys experience in providing recreation programs and the Coun-

tys experience in providing health clinics, case managers and mental

health workers. Critical components o the program are education,

human services, recreation, and health services, most o which werenot envisioned as a City responsibility in the 1984 agreement.

Through the Portland Parks and Recreation bureau, the City operates

11 o the 58 community schools.

Increased need for housing assistance and homeless services -

Homelessness in Portland is a signicant issue despite eorts by

both the City and the County. In a 2011 count o the homeless in

Multnomah County, 4,655 persons were counted as unsheltered, or

sleeping in transitional housing. This was a 9 percent increase over theprevious count. Increasing demand or services, along with unding

reductions rom Federal sources has placed pressure on housing

program unding.


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The City created the Portland Housing Bureau to handle housing is-

sues. The Bureau was created specically to enhance the delivery o

housing services by the City, even though this was likely envisioned

as a County service when the agreement was adopted. The Bureau o

Housing spent over $11 million rom the general und in FY 2011-12.

I the 1984 IGA cannot be used as a comprehensive guide to core

services, is there another document that can be used? One that cuts

across multiple City Council and Mayoral administrations and that

can be used to guide allocation o work and spending priorities?

We ound there is a general notion o core services, but nothing

documented or with a rm legal basis. We ound:

City Charter and State statutes do not specically list

responsibilities

Representatives o both the City Attorneys Of ce and the Of ce

o Management and Finance (OMF) said they were not aware o a

specic list o core, or required City unctions. There are prohibitions,

primarily through State statutes or judicial decisions that speciy

activities the City may not be engaged in, but that is on a case-by-

case basis. For example, the City cannot run a port or a court. Those

activities are reserved or the port authority and the County by State

statute. And o course, the City cannot conduct activities that are

otherwise illegal.

Likewise, the City Charter only says that the City Council can exercise

all powers granted by the Charter itsel or by general law. But there

is no description o specic, or core responsibilities.

The City mission and goals in the budget are so broad as to cover

all livability issues and provide little help in setting spending

priorities

The Citys mission and goals are broad and seem to cover almost any

type o livability or economic issue, including supporting education,aordable housing, neighborhood livability, multi-modal transporta-

tion options, etc.

Core services notarticulated in

documents or legalsources


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Urban Services

Figure 2 Basic public services provided by Portland Plan Partners

Source: The Portland Plan

Service area

Water

Sewer

Solid Waste

Transportation

Public Transit

Airport and Marine

Education

Libraries

Parks

Natural areas

Health & Human Svcs

Police/Fire/911

Emergency Mgmt

Justice

Recycling

Aordable Housing

City

x

x

x

x

x

x

x

x

x

County

x

x

x

x

Metro

x

x

x

x

x

TriMet

x

State

x

Port

x

School Dist.

x

City elected and bureau of cials do, however, have a general

notion o core services

City elected of cials and bureau leaders told us they know o no

documented listing o core services. They did, however, generally

gravitate toward a consensus. The most requently mentioned coreservices were public saety, water, sewer, and transportation. This was

true even or Commissioners and bureau personnel with no responsi-

bilities in these areas.

OMF sta told us that numerous attempts have been made to docu-

ment core services. These eorts have not been successul. They told

us that such a list would help them make consistent recommenda-

tions to City Council as to which programs should receive unding,

and that having such a list is considered a best practice or organiza-

tional management.


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The Portland Plan oers an updated division o responsibilities

between local governments, but is aspirational and may not be as

useul as a guiding document or core services

On April 25, 2012, the City Council adopted The Portland Plan, a stra-

tegic planning document intended to guide the City through 2035.The plan stresses public partnerships and lists public services cur-

rently provided by the local government participants. Figure 2 shows

the listing as described in The Portland Plan.

Even though the process included the participation o representatives

rom many local governments and organizations, the plans goals and

perormance objectives have not been ormally adopted by the Citys

largest partner, Multnomah County.

While cooperation between local governments is important, we

conclude that not clearly articulating core responsibilities can have

signicant negative consequences:

The City may create programs which generate a public good, but

may not align with basic unctions and may not be sustainable

during dif cult economic times

Budgeting or a large city government is dif cult under the best o

circumstances, but during times o declining revenue or increasing

demands, it is especially hard. One task o the City Budget Of ce is tomake recommendations to City Council as to which programs should

receive unding and which should not. A list o dened core respon-

sibilities would provide additional criteria or these recommendations

and would assist City Council decision-making.

In addition, the City may be asked to und services that have been

traditionally unded by other entities. Without clear documenta-

tion o core responsibilities, public or political pressure to help other

governments may make it harder to make budgetary decisions about

important City programs. As one example in recent years, there wassuccessul public pressure to grant money to Portland Public Schools.

Why it is importantto have a clear

sense o City coreresponsibilities


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Urban Services

Elected of cials and proessional managers may be duplicating

services with other jurisdictions

In the current local budgeting environment, it would be dif cult to

determine the extent o potential duplication. There is little budget-

ing or programming cooperation between the jurisdictions, althoughattempts have been made on the Citys part to organize meetings

with other governments on specic service areas. These attempts

had mixed results. As a result, there is no way to know the level o

resources going to either competing or duplicative programs.

We are not aware o multi-jurisdictional studies on this issue. In our

multi-jurisdiction audit o housing programs in 1997, the City and

County Auditors jointly reported on the ragmented nature and con-

icting priorities o housing programs in Portland and Multnomah

County. In 2008, a City-hired consultant ound that similar problemspersisted more than a decade later.

Although we do not know the extent to which dierent govern-

ments are duplicating programs, we do know by reviewing nancial

documents rom various local jurisdictions that dierent local govern-

ments are involved in similar activities. Figure 3 shows the results o

our review o budget documents rom each jurisdiction, concentrat-

ing on ve major areas.

Figure 3 Similar programs oered by various local jurisdictions (1)

Source: Audit Services Division review o budget documents

(1) Other jurisdictions may also oer similar programs, this is not intended to be a

comprehensive listing.

(2) Portland Public Schools

Transportation

Public saety

Parks

Education

Housing

City

x

x

x

x

x

County

x

x

x

x

Metro

x

x

TriMet

x

x

PPS

x

x

x

(2)


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Voters may have a hard time choosing between competing

government programs at election time when they have no clear

idea which jurisdiction their money is unding

Besides potentially duplicating services, not having clear division o

responsibilities lessens transparency o government. Voters may beunable to tell by voting guides and tax bills what their dollars are ac-

tually paying or and what entity is responsible or results. They may

nd it dif cult to make deliberate decisions to und certain taxing ju-

risdictions, either to a greater or a lesser degree, i their tax dollars are

owing between the various local governments. They may also nd

it dif cult to hold elected of cials accountable or tax dollars when

those dollars are owing between governments.

Figure 4 Sample property tax bill o Multnomah County homeowner

Source: Multnomah County


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Urban Services

For example, Figure 4 a sample property tax bill, shows the share o a

taxpayers bill going to each taxing authority. When signicant money

ows between the taxing jurisdictions, this bill no longer represents

a complete statement o unding. It is less useul to the taxpayer as

a means o holding government accountable or or making undingdecisions come election time.

The City may have dif culty assuring its money is spent wisely or

as intended

The City risks losing control o its own scarce tax revenues i appropri-

ate controls are not in place to ensure that the other governments we

transer money to are spending those dollars wisely.

The 1984 intergovernmental agreement with Multnomah County is

no longer a useul document or dividing responsibilities between

the City and County. There is no accepted, comprehensive list o core

responsibilities to help guide decision-makers.

In many cases, it would be more ef cient and eective to clearly

divide the provision o services between governments.

The City o Portland has worked to develop relationships with other

local governments to provide services in an ef cient and eective

manner. The IGA and the Portland Plan are examples o that cooper-ative intent. However, demographic, social, technical, and economic

changes in the past 30 years contributed to blurring the lines o

responsibility originally intended in the agreement. Moreover, the

Portland Plan has not been signed by all regional partners and was

likely not intended to substitute or a listing o core services.

Beore the City can enter into a revised agreement to divide services

(or example, to update the agreement) the City must rst dene its

core responsibilities. Thereore, we recommend the Mayors Of ce:

1. Work with City Commissioners and their respective

bureaus to develop and document a clear listing o City

governments basic responsibilities.

Conclusion andrecommendations


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It might be helpul to consider and list tasks the City:

a. Must do to ulll basic obligations,

b. Should do i resources allow, and

c. Would be good to do under ideal circumstances.

2. Work with the County and other local jurisdictions to

develop, update, and implement broader versions o what

is contained in Resolution A and the Urban Services Policy

and the IGA.

In order to avoid duplication and inef cient service delivery

and to improve public accountability or multiple levels o local

government, City Council should take a lead role in developing

an updated version o the 1984 IGA to include as many regionalpartners as appropriate. The agreement should be ormalized

into an IGA with each o the Citys regional partners. The

Portland Plan could be used as a starting point or such a

document.

Our rst objective was to determine i the 1984 IGA with Multnomah

County is a useul document in listing the Citys core responsibilities.

I not, our second objective was to determine i City government

possesses an accepted, documented list o core responsibilities thatcan be used to guide allocation o work and spending priorities.

To accomplish these objectives, we interviewed 22 City employees in

nine bureaus and Commissioners Of ces. This included three Com-

missioners, the City Budget Director, the Chie Administrative Of cer,

and a representative o the Mayors Of ce.

We reviewed nancial documents o the City o Portland, Multnomah

County, Metro, TriMet and Portland Public Schools. We reviewed

historical documents relating to the agreement, the City Charter, City

Code and State Statute.

Objectives, scope andmethodology


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Urban Services

We conducted this perormance audit in accordance with generally

accepted government auditing standards. Those standards require

that we plan and perorm the audit to obtain suf cient, appropriate

evidence to provide a reasonable basis or our ndings and conclu-

sions based on our audit objectives. We believe that the evidenceobtained provides a reasonable basis or our ndings and conclusions

based on our audit objectives.


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R E S P O N

S E T O

T H E A

U D I T


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This report is intended to promote the best possible management o public resources.

This and other audit reports produced by the Audit Services Division are available or view-ing on the web at: www.portlandoregon.gov/auditor/auditservices. Printed copies can be

obtained by contacting the Audit Services Division.

Audit Services Division

Of ce o the City Auditor

1221 SW 4th Avenue, Room 310

Portland, Oregon 97204

503-823-4005

www.portlandoregon.gov/auditor/auditservices

Urban Services Policy and Resolution A: Core City services

not articulated; 30-year-old commitments obsolete

Report #433, March 2013

Audit Team: Ken Gavette

LaVonne Grif n-Valade, City Auditor

Drummond Kahn, Director o Audit Services

Other recent audit reports:

Street Pavement: Condition shows need for better

stewardship (#432, February 2013)

Transportation Funding: Revenues up, spending on

maintenance down (#436, January 2013)

Portland Development Commission: Indicators in

Urban Renewal Areas suggest economic progress

(#440, December 2012)City of Portland 22nd Annual Community Survey

Results (#428, October 2012)

433 - urban services - published

Documents