open letter to Ralph Goodale from Civic Efficiency Group

The open letter to Ralph Goodale from Civic Efficiency Group - and others - proposes a Civic Efficiency Collaborative to address issues in management accounting for cities and proposes a City Signal Infrastructure Loan program to complement existing City Infrastructure Loan programs in Canada. It supports rather than competes with the recommendations of Canadian Big City Mayors.


February 18, 2005

Ralph Goodale
Minister of Finance
Government of Canada
House of Commons, Ottawa

Dear Minister,

Canadian Cities suffer extreme infrastructure deficit, unprecedented emergency situations, and risk decay and collapse not unlike American cities in the 1960s. Those recovered only with direct federal help: social housing, new borrowing rights, new taxing powers, and (most critically) strict federal standards for municipal performance audits and critical infrastructure. Most recently Baltimore proved that profound savings are easily achieved through even stricter accountability protocol. Today's cities must be rebuilt starting with their nervous systems: until they can feel pain they don't know what to fix. Tomorrow's thriving green cities will have remade themselves by seeing statistics, hearing citizens and smelling every scrap of waste. There is only one proven path - an upgraded City Signal Infrastructure that creates totally transparent municipalities, whose routine operational savings pay back hundreds of times the initial investment.

Municipal services are the most intimate point of contact for Canadian families and their government. In the areas where they are competent, they are recognized as the most efficient providers of service. So much so, that they increasingly bear burdens of providing services that were not even imagined at the time of Confederation. Yet they still manage themselves roughly as they did in 1867: with paper, pencils, bricks, mortar, hierarchy and provincial dictates.


Your own Government, including Prime Minister Paul Martin, Minister of State for Communities and Infrastructure John Godfrey, and PSEPC Minister Anne McLellan, have each recognized some of these needs for stable new funding and help training first responders, to build Emergency Operations Centres, to move to "green" building regulation and government procurement, to build an infrastructure to attract this century's online work opportunities to rural areas. As just one example:

Your Government itself has announced that it will move at least ten thousand jobs from Ottawa to "rural areas" that will need to have reliable telecommunications and computer network service infrastructure to ensure reliable delivery of federal services. Meanwhile, reports from Auditor General of Canada Sheila Fraser indicate that even the well-funded federal government has often failed to meet its own privacy, procurement, and computer security standards - with less resources or expertise, most cities do even worse.

Recently, your Government committed to helping municipalities fund solutions for themselves: by moving to fully rebate GST payments; by funding Federation of Canadian Municipalities (FCM) Green Municipal Funds; by promising to rebate federal gasoline tax as part of the New Deal for Cities. Canadian Mayors and FCM are right to also demand that the existing City Infrastructure Loan program continue. But more than money is now required, and attention to more than bricks and mortar. We request that you consider the signals, the bits, that move in government, not just the structures, the atoms, that it is built from. We request that you upgrade the signal infrastructure first:


The federal government is clearly taking on a direct role, much as the US government has played, in its relations with cities. Along with federal help comes federal responsibility to ensure that funds are spent effectively. This requires strong yet simple accounting and audit protocol. Fraser has called for US GAO style government performance auditing:

In the long run, only transparent municipalities subject to municipal performance audits (as pioneered by the US GAO), with sufficient autonomy to contract or issue municipal bonds, but subject to strong national procurement and emergency interoperability and training standards (as pioneered by the US FEMA), all validated by ISO 19011 environmental and process audits, could truly reassure every Canadian taxpayer that federal tax is being optimally spent by transfers to cities.

In time, this goal may be achieved, with the cooperation of the FCM, PSAB, PSEPC, global standards bodies like the ISO, ITU, W3C and IETF and creative solutions like the US Government Open Code Collaborative. As better practices evolve, however, the federal taxpayer is exposed to risks from poor city management (such as the Toronto computer leasing scandal) and poor handling of crises (such as SARS, where three levels of government appeared to contradict each other at times). Cities need stricter standards and protocols:

Until now, cities have got by with a patchwork of legacy systems for finance, permitting, policing, social services and public works. This is not adequate in the present era. We need a coordinated approach to city hardware and software and job descriptions that will let us all take advantage of what our neighbours learn, and are willing to share with us.

We propose a Canadian Civic Efficiency Collaborative that would work specifically on this kind of problem - focusing not on buildings and roads and sewers, but on the instructional capital: best practices, standard terms of reference, quality management, signal infrastructure.


We the undersigned believe strongly that:
- Canadian cities are poorly instrumented, poorly quantified, but well run
- Canadian cities are not able to meet their own legally mandated obligations in purchasing, environmental protection, emergency preparedness and privacy
- major crises are best averted by deeply empowering frontline city staff and city politicians, so they are informed and reliable voices in any crisis
- modern instructional capital management and "just in time training" let junior staff make difficult decisions under stress without undue delays

More importantly, we believe there are vision problems that you are in a unique position to acknowledge, and to address:
- "big" cities over 750,000 people have special problems that others don't, e.g. green procurement validation, which are more like federal problems in scale and complexity
- Canadian cities must emulate the most advanced European cities in tracking their natural capital and social capital
- Canadian cities must emulate the most advanced American cities in managing instructional capital - in particular, continuous municipal performance audits, GAAP and US GAO municipal performance audits.
- developing individual capital (talent), financial capital (accounting flows) and infrastructural capital (everything from roads to protective clothing) requires rigourous standards that can only be set by the federal government

Only now, at this time, in this budget you are presenting on February 23rd, does a strategic opportunity exist to gain agreement from all provinces and large cities that federal intervention and standards are required. Once money is moving, the impetus to agree to any supervision will just disappear. The existing poorly designed structures have failed to meet environment, security, privacy, capital asset management, and other constraints. Cities need help not just in the form of funds, but in the form of discipline and oversight that can typically only come from a real creditor.


Therefore, we ask you, in this budget you are presenting on February 23, 2005, to set aside substantial funds for a City Signal Infrastructure Loan program for cities or urban regions of over 100,000 population. We further ask you to make it abundantly clear that only projects that repay a City Infrastructure Fund with interest will be considered, that this is a loan not a grant program, and that cities and possibly private investors are themselves welcome to "invest" in the improvement of Canada's cities.

Any such loans must be first or solely directed towards projects that improve signals that move between parts of city government itself: accountability by feedback sessions based on statistics-gathering, city monitoring, continuous improvement audits:

The Baltimore CitiStat program, which you can read about as a case study for UK authorities, proves an outstanding ROI is available that can continue to fund other cities' improvements. The federal funds replace money that might go to escrow company or other private parties that now finance city improvements, and the interest could go to help other cities to upgrade.

Such management-focused projects can and should be followed on others which gather feedback from citizens in a more disciplined way that permits all municipal services to be improved. Of these, national 311 service is most useful - but it should only follow on implementation of CitiStat and a customer service request system, and it should be only funded with federal money if it provides jobs to the under-employed (disabled, stay-at-home moms, students and seniors) and cuts commuting by relying only on teleworkers.

A third phase would be to make cities robust under stress: Emergency Operations Centre funding available from PSEPC should be easier to work into routine network operations centre and telework plans, so that a robust, modular, network of service providers will remain robust and operating through a wide range of "ordinary emergencies" (such as major storms, blackouts, epidemics, bomb scares, subway/road shutdowns). Emergencies happen every day. To each victim, they are the same as a major emergency. It is only the scale that varies, ultimately.


A typical project would implement accountability sessions based on real statistics as CitiStat does, but integrating Kyoto greenhouse gas compliance data, and tracking first responder activity, possibly creating vulnerable persons list to check on in emergencies, to better allocate city staff time in a crisis. It would expand to 311 service and 211 service that could take overflow from 911 service at peak times. It would employ the disabled, stay-at-home moms, students part time and free funds to put more police and social workers on the street. It would help cities meet their own, and provincial and federal, rules. It would be easy to subject to a municipal performance audit as advocated by the US GAO and Sheila Fraser. It would pay off its entire capital input in under one year, then, take on more ambitious goals:

It would make maximum use of free software, Share Alike and open content works to seed a Civic Efficiency Collaborative. On this base, it would work with neighbours laterally to integrate e-democracy, e-government and e-commerce for extremely rapid municipal service that was unconcerned about boundaries. It would enable community emergency response teams. It would reduce total cost of operations of all telecom and computer systems drastically -

To not enable such projects is just plain wrong. To let municipalities do this piecemeal is also wrong - they do not have the expertise nor the standards yet. Yet this expertise, these standards, exist now in North America. It remains only for you to sponsor a way to bring them together, and to encourage cities to take this plain path.


Obviously, the Finance Minister is not the sole point of contact with Canadian municipalities. Within the federal government there are at least four other important bodies:

We ask you to coordinate closely with John Godfrey and Reg Alcock to ensure that cities that substantially upgrade their signal infrastructure and attempt to move to full cost accounting and quality management in government will be first in line for major infrastructure grants, and will be given priority consideration for jobs that leave Ottawa in the future. Why should jobs NOT go to those who are committing, within their municipalities, to making all government better, everywhere?

We believe it would also be beneficial to coordinate with Anne McLellan and PSEPC, in particular, to ensure that Emergency Operations Centres as funded already by that agency, can be co-funded also as routine Network Operations
Centres, or as backup centres. As well, fire, police, hospital and other frontline municipal and provincial operations would use compatible equipment and user interfaces that can easily interoperate in any crisis situation.

This, however, is an added benefit. The repayment of loans would be contingent in our proposal only on measurements of routine benefits of improved systems - the emergency preparedness advantages are real but not necessary to justify. Improved management accounting for cities must precede any way to minimize regret of major emergencies which are, in general, high-impact low-probability events.

Let us deal first with high-probability, low-impact events; the stastistics that every city generates from its routines:


To guide you in setting the criteria to apply to any loan such program, we detail as an appendix to this Letter a description of the benefits and costs of the CitiStat program, pioneered in Baltimore for city-wide use but closely modelled on the CompStat system used by the NYPD. Most the issues we list above were directly addressed in some way by this program, and it is the ideal first step for any Canadian municipality to take.
A similar municipal accountability system is now being considered in Austin, Boston and San Francisco (which have, like Toronto, substantial high-tech industries and dependence on online business and telework).

In Canada, such a system has been discussed tenatively in Richmond Hill as a way to integrate the statistics that Town has gathered to track its energy use and greenhouse gas emissions. Spreading this practice would help prove Canada is meeting Kyoto obligations.

Beyond that, regular (weekly in the Baltimore model, possibly monthly or even quarterly in smaller cities) accountability sessions apply the same discipline as municipal performance audits on a smaller scale, on a more routine basis, with a senior city politician (in Baltimore, the Deputy Mayor) leading the questioning that leads to problem identification and continuous improvement.


Baltimore's advice is that any "311" service (which allows citizens to get municipal services or provide feedback about them by phone) should only be implemented *after* city statistics are under control and customer service request (CSR) are under control, as the new feedback has no place to go otherwise and no accountability sessions to hold anyone responsible for patterns of service failures.

We believe that any "311" service must be distributed using telework methods to home workstations that can easily be made reliable and secure. It should preferentially employ the disabled and those who have difficulty finding affordable transport to centralized workplaces. We also can prove that using "zero e-waste hardware" and extremely modular standard telecom and computer equipment can render such an infrastructure virus-proof even under deliberate attack. Such distributed infrastructure could start with
311 and 211 services but would rapidly prove useful in all city functions, making it possible to run a municipality even if its City Hall burnt down.

To reduce commuting, employ the disabled, make use of part-time workers of high qualifications (such as students, retirees, and stay-at-home spouses) who are now underemployed, reduce federal and provincial payouts, protect the climate, and cut toxic waste going into landfills, it requires only a decision by you to make federal loans available *only* for implementing *distributed* 311 - a direction wholly consistent with Mr. Alcock's proposal to distribute federal government services and rely on a secure nationwide intranet to coordinate.

This approach, while ambitious in government, has been shown sound in business, which increasingly relies on intranets to manage instructional capital and respond quickly to customers, even with "just in time" staff hired on demand.


Baltimore found that it could integrate and better support "all of the City of Baltimore's major operating departments... Department of Public Works' Bureaus of General Services, Solid Waste, Transportation, and Water and Wastewater, the Fire and Health Departments, as well as the Departments of Housing and Community Development and Recreation and Parks... oversight of the Police Department's administrative functions" and other "stat" processes... for a wide range of intergovernmental issues including the delivery of youth services (KidStat), the coordination of public housing, public safety, and public works initiatives ... planning of economic development and capital spending efforts." http://www.ci.baltimore.md.us/news/citistat/fiscal.html

A further potential is traffic signal infrastructure, which according to studies in Toronto, could be upgraded to meet Kyoto by drastically reducing idling and commute time. The same infrastructure could also ease detours and allow more rapid evacuation out of areas during some emergencies.

How far to interpret "signal infrastructure" is up to you. At the very least, core municipal operations should find it easy to buy more standard, reusable, modular equipment that has a longer (six to eight year) lifecycle by buying for the needs of a few years from now, not needs of the last century.


We recognize that most of the above requires massive city worker retraining and changes in recruiting and promotion. While this presents some labour challenges, funds saved in the back office can pay for extensive city services of other kinds and employ more outside and field and social workers, probably leading to more overall city jobs. Since the issue of rural workplaces and telework has already been raised by Mr. Alcock, we suggest CUPE consider the municipal issues at the same time. Government is changing, and is re-forming - just as business did - to deploy information technologies.

Ultimately, there is only one taxpayer, one citizen, served by all governments: Critical obligations that the Federal government and Municipalities have in common such as Kyoto mandated GHG and pollution reductions, emergency or crime
prevention, large scale emergency response, and better control of purchasing, can be met locally but measured centrally; Canadian cities can be held to best practices and benchmarks compiled from other municipal experiences across the country, the continent and the globe. By setting up a common creditor with the right to compel cities to meet standards, you could unify existing efforts:

The Federation of Canadian Municipalities has, to a large degree, been working to compile many of the Best Practices from across the country. In conjunction with the Federal Government, FCM has been administering the Green Municipal Funds program which was designed to assist municipalities
with "greening" initiatives and has provided upwards of $250 million in grant and loan funding for hundreds of projects to date. We note that the accounting for these lacks somewhat.

Had these monies been delivered to Cities practicing stringent accountability and transparency protocol, the realized value of the individual projects would have been immeasurably greater. Simply by truly understanding the greatest needs and the most cost-effective projects for a particular city, as well as possessing the ability to accurately measure outcomes versus initial benchmarks, all partners could have dramatically reduced the incidence of
marginal benefit and wasted resources. The ability of other member cities to share the lessons learned would also be an enormous asset when designing future funding programs and in prioritizing various projects.

The FCM Environmental Committee, for instance, could lead in monitoring Kyoto compliance, in enforcing environmental procurement, and in drafting clean-air bylaws. The Committee could make recommendations as to which cities' projects were most "green" and most likely to result in long term benefits for stakeholders.


Based on recent experience in the US, the EU, and the well-publicized views of the great urbanist Jane Jacobs,
we believe that the relationship between Cities and the Federal government must necessarily strengthen in the future and that this symbiotic relationship needs to be nurtured and cultivated. Greater accountability and transparency
will lead to increased support, trust and autonomy which will be mutually beneficial, contributing to Canada fully realizing its potential to be a world leader in innovation, standard of living and quality of life.

Your Government committed strongly to this direction with the New Deal for Cities, "green procurement", "ecological and social indicators", privacy protection, and more power in the Auditor-General's office to uncover poor practices in municipalities, arms'-length agencies, and others funded by the federal government. It is in that spirit that we call upon you to help cities do these things correctly, first, before the federal government can do so. It is easier to solve these problems first on small scales, then scale them up to Canada - and ultimately to the world.


To begin, we need only the City Signal Infrastructure Loan, which can become a cornerstone of urban policy in Canada. It will yield so many tangible and intangible benefits, that the municipal infrastructure deficit could conceivably be wiped out within a generation. The signal infrastructure deficit represents the lowest hanging fruit - addressing it will make it far easier to find and address the rest of Canada's municipal infrastructure problems in due order.

With the recent COMRIF program having resulted in an overwhelming number of requests for funding, it would make sense to require that any applicant municipality agree to implement a serious, proven, standard efficiency and accountability program before being given consideration for any funds. It is for this purpose that we propose a Civic Efficiency Collaborative to define effectiveness, efficiency, equity and electronic interoperability standards to so qualify.

If you reject these proposals, we would be most interested to know why. They have been presented already to John Godfrey, in a meeting with Dan King on December 21, 2004 (in a form presented here in another appendix) We do not believe that any of them are controversial, but since your own feedback is very valuable, we request it before we present this work to the FCM in June. Should there be a federal election in the interim, we expect that at least one, possibly as many as three, federal political parties will be proposing something very much like this program. Should you consider it worthy of consideration for the Liberal Party platform, in that event, we would certainly work with you to make that happen. Our supporters come from all political parties - they are Canada's municipal leaders.

You will hear from them soon. The signal infrastructure deficit is becoming more obvious to a new generation of civil servants who will not tolerate the absurd waste and bizarre procedures they see wasting time and money inside all of Canada's cities. The recent Toronto MFP scandal was a wake-up call to those who thought Canada's cities were as well run as they could be. They aren't. Help us fix that.

Our criticism is offered only in the spirit of making things work. We remain absolutely committed to the best possible city infrastructure in Canada, one that will lead the world, indeed, ultimately, astonish it. We will therefore remain available to discuss this with you at any time.


Elio Di Iorio

Dan King

Craig Hubley
Greg Bonser
Michael Pilling
Gabriel Draven
Kate Holloway