Article published in NJ GFOA’S THE BOTTOM LINE Annual Magazine, 2000 Issue
HIGH VALUE PERFORMANCE MEASUREMENT:
For Sustainable Results that Matter to Citizens
By Paul Epstein, Randall Solomon, and Stuart Grifel
Introduction
Performance measurement has become an accepted management practice for state and local
governments across the country, no longer limited to a handful of large jurisdictions. Over120
cities and counties have joined the Center for Performance Measurement of the International
City/County Management Association (ICMA), which has reported comparative data on nearly
100 of them, ranging in populations from 9,000 to 3 million (ICMA, 1999). Budget officials
from more than half of the states report implementation of some form of performance-based
budgeting (Willoughby and Melkers, 2000), and GFOA has long encouraged the use of
performance measures as part of good local government budgeting practice. The Governmental
Accounting Standards Board (GASB) has been conducting extensive research on performance
measurement practices since the mid-1980s, under the heading of “service efforts and
accomplishments” (SEA) (e.g., GASB, 1990). The GASB passed a “Concepts Statement” on
SEA reporting (GASB, 1994), and may in the future pass standards that would require
performance reporting for states and localities to obtain unqualified audits of their external
financial reports. The GASB has established a Performance Measurement for Government web
site at http://www.seagov.org that describes performance measurement concepts and types of
measures, and includes thorough case studies on the use of performance measurement in state
and local governments from across the country.
When a state or local government implements performance measurement, it is not unusual for a
finance or budget office to be asked to take on a lead role in coordinating or approving
performance measures and targets for programs, departments, or community goals, particularly if
the measures are to be used in the budget process or reported in the budget. As collecting and
reporting performance data has a significant cost, finance and budget officers have a natural
concern that their jurisdiction get good value from the information reported. Generally, “good
value” from performance measures means that people use the information. For example, public
managers may use the information for planning and improving services, managers and elected
officials may use the information to inform the process of developing and negotiating budgets,
auditors or central managers (e.g., management and budget officials, city managers) may use the
information to identify candidate programs and departments for attempting major studies or
projects with opportunities to improve productivity, save funds, or increase revenue. These uses
represent various ways governments develop policies, and plan and manage service and
regulatory operations to implement the policies and priorities of their governing officials. Using
performance measurement for policy and implementation, often called “managing for results,” is
considered a valuable use of performance measurement. The GASB web site describes how
performance measures can be used in a cycle of managing for results, at
http://www.rutgers.edu/Accounting/raw/seagov/pmg/resultsmgmt/index.html. However,
managing for results, based strictly on internal development and use of performance measures by
government officials, is not, by itself, the highest value use of performance measurement.
July 14, 2000
1
It is possible to go beyond internal uses of performance information, to higher value uses that
focus on measuring and achieving results that matter to the citizens of a community, region, or
state. Performance measures that focus on issues—or conditions in the community—of greatest
concern to citizens will be of greatest interest to citizens and elected officials. Some form of
citizen engagement is needed to identify community conditions that concern citizens the most. A
government can thus achieve the greatest value from its measurement and improvement efforts
when it aligns citizen engagement with its efforts to manage for results, or more generally, when
it aligns citizen engagement, performance measurement, and policy and implementation.
This article draws upon examples from around the country on how local governments and
citizens’ organizations have created various “linkages,” or “alignments” among citizen
engagement, performance measurement, and government policy and implementation to benefit
their community or region. The examples are drawn from a national study by the Minnesotabased Citizens League, funded by the Alfred P. Sloan Foundation. This article also discusses a
special opportunity in New Jersey for local governments to connect with results that matter to
citizens throughout the state, by aligning local performance measurement with the sustainability
measurement efforts of New Jersey Future. New Jersey Future is a non-profit, non-partisan
organization dedicated to improving the quality of life in New Jersey. Another concern related
to maintaining the value of performance information—maintaining its integrity and validity—is
also discussed in this article.
Two Models, One Shape, and Key Common Principles
Two models provide the concepts behind the examples in this article. The models both relate to
conditions in a community or region. One models governance, the other models sustainability.
The “Governance Model” (Figure 1) depicts how alignment of three key elements of governance
affect community conditions. The “Sustainability Model” (Figure 2) takes a special perspective
on community conditions—the sustainability of desirable conditions—and depicts how
alignment of three key human systems affects community sustainability.
In the governance model, citizen engagement uses the term “citizens” in the broadest sense to
include not only individuals and community groups, but also nonprofit and business
organizations (as corporate citizens) when those organizations act in the broader community
interest, rather than corporate self interest.
Performance measurement, in the governance model and throughout this article, applies to
measures of both “community conditions”—broad outcomes desired in a community or region—
and measures of government services. Government service performance is well-represented by
the GASB’s measures of “service efforts and accomplishments,” which encompass inputs
(service efforts), outputs (work completed), outcomes of the work completed (service outcomes
or results accomplished), and efficiency (cost/output or cost/outcome measures). For some
conditions (e.g., of streets) “community outcomes” and “service outcomes” may be very similar
and may be measured by the same indicator (e.g., an index of physical street conditions). For
other conditions (e.g., economic conditions) community outcomes and service outcomes may be
quite different, and measured by different indicators (e.g., a community outcome may be the
overall unemployment rate in the community, and a service outcome may be the number or
percent of job training participants who get jobs and stay employed for at least a year).
July 14, 2000
2
Figure 1. Effective Governance Model
Citizen
Engagement
3
Government
Policy and
Implementation
2
4
1
Performance
Measurement
Figure 2. Sustainability Model
Society
Environment
Economy
July 14, 2000
3
For the sustainability model, New Jersey Future defines sustainability as “protecting the
resources and systems that support us today so that they are still available to future generations.
In short, it means preserving our civilization and the things we hold dear in perpetuity, as well as
enhancing today’s quality of life.” By its focus on society, environment, and economy as three
overlapping systems, the sustainability model acknowledges that each of the systems is
connected to and dependent upon the others, especially in the long term. To have a dignified and
prosperous civilization in the future, each of these systems must be healthy and in balance (New
Jersey Future, 1999). Decisions that lead to a sustainable future will take into account the impact
on each of the three systems.
Like the sustainability model, the governance model also focuses on the overlaps or “linkages”
among its three elements as keys to effective community governance. These linkages, or
different forms of “alignment,” are indicated by numbers 1–4 in Figure 1, and discussed, with
examples, later in this article.
In the abstract, the Governance Model is “value free,” but in practice the consensus values of the
citizens of the community will drive the kinds performance sought by the community. The
Sustainability Model is not value free in the abstract. It is based on underlying concepts that
reflect core values of preserving a just and vibrant civilization, a healthy environment, and a
strong economy for future generations while enhancing today’s quality of life. However, the
value of preserving civilization is widely shared, and the model leaves room for people to
develop specific sustainable performance measures that reflect specific needs and values of their
community or region. There are two key principles that both the Governance Model and the
Sustainability Model have in common:
 Citizen engagement to determine priorities for measurement and improvement.
 Performance feedback to measure progress and determine future improvements needed.
Citizen Roles
It has become a common practice throughout the U.S. and in other countries for governments to
begin viewing citizens as the customers of their services, as deserving of high-quality service as
the customers of businesses. However, citizens—especially if individuals, groups, and corporate
citizens are included—can play many roles in relation to governance and improving their
community. Some of these roles are more active than others. Citizens can be, for example:
 Government’s customers (relatively passive role).
 Government’s owners or “shareholders” (relatively passive, similar to most corporate
shareholders who receive reports on performance and vote on directors and some issues).
 Issue framers at various levels, from regional “visionaries” to neighborhood “street level
advisers and activists” (active role).
 Co-producers of public services (active role), such as the many citizens who sort their
trash for recycling, and the volunteers who mentor a child, adopt a park, participate in
community policing, and take on many other service-like functions for their community.
 Evaluators of public services and community conditions (active role).
 Independent outcome trackers (active role), a role played by, for example, the citizens
who volunteered their efforts for New Jersey Future.
July 14, 2000
4
More complete discussions of these roles can be found in chapter II of a Citizens League paper
available on-line at http://www.citizensleague.net/cl/SLOAN/cover.htm (Epstein, Wray,
Marshall, and Grifel, 2000).
Citizens often play several roles at once, depending on the situation and the importance an issue
holds for a person or group. For instance, by viewing citizens as customers, governments can
enhance service quality. Yet governments that view citizens only as customers will lose the
tremendous leverage they could gain by engaging private individuals and organizations to act in
concert with government to achieve community goals. Both the Governance Model and the
Sustainability Model depend upon citizens playing more than just the relatively passive
“customer” and “owner/shareholder” roles to provide best results for a community or region.
Governance Model Linkages and Examples
Each of the three governance elements—citizen engagement, performance measurement, and
government policy and implementation—represent, on their own, important sets of practices for
effective government. These elements can be even more powerful, however, when they are
aligned to achieve effective governance than when they are practiced separately. Communities
at the forefront of measurement and engagement demonstrate many richly varied examples of
these linkages in action. Ideally, a community will align all three elements (link 4 in Figure 1) in
order to leverage public and private resources to achieve results that matter to citizens.
Effectively linking any two elements (links 1–3 in Figure 1), however, can also prove beneficial.
Many of the linkage examples cited below are described in more detail in chapters IV and V of
the Citizens League paper available at http://www.citizensleague.net/cl/SLOAN/cover.htm.
Link 1: Performance management by government, or “managing for results,” but without citizen
engagement. Many state and local governments attempt to link performance measurement to
their processes for developing and implementing policy. Three communities well known for
their long commitment to using measurement to improve results are Sunnyvale, California;
Phoenix, Arizona; and Charlotte, North Carolina, each with more than 25 years of performance
measurement experience. The extensive use of performance measurement by the City of
Sunnyvale’s managers, the City’s use of “community condition indicators” on quality of life, and
management’s and city council’s efforts to budget based on service outcomes were well
chronicled by Osborne and Gaebler (1992). Phoenix evolved from an industrial engineeringbased approach to measurement and improvement in the 1970s, to a much more market researchbased approach in the 1990s, with many other approaches attempted (and some still used) along
the way. Charlotte gradually added new methods of evaluation to its 1970s “management by
objectives” (MBO) system until, in the 1990s, Charlotte shifted away from MBO to implement
the “balanced scorecard” system, linking measures to strategy, and translating strategy to action
(Kaplan, 1998). Charlotte’s scorecard examines five focus areas chosen by the City Council
(e.g., community safety, transportation, economic development) across four different
measurement perspectives (customer service, financial accountability, work efficiency, learning
and growth) providing both balanced measurement and linkage to the council’s priorities.
Measurement gives the council a quick but comprehensive view of progress on its strategic
priorities, making measures effective for policy making (Syfert, Elliot, and Schumacher, 1997).
July 14, 2000
5
Link 2: Citizens engaged in measuring performance. Two of the best-known private, citizendriven groups that have initiated performance measurement are Sustainable Seattle (see
http://www.sustainableseattle.org/ ) that reviews the King County, Washington, region, and the
Jacksonville Community Council Incorporated (JCCI) (see http://www.jcci.org). JCCI issues
reports on quality of life indicators (JCCI, 1999a, and http://www.jcci.org/qol/qol.htm) for
Jacksonville/Duval County, Florida, and on health and human services indicators (JCCI 1999b,
and http://www.jcci.org/ca/ca-toc.htm) for a multi-county region centered on Jacksonville.
Numerous other groups have emerged in communities and regions across the country. For
example, the Central Texas Sustainability Indicators Project in the Austin region recently
published its first report of 42 economic, environmental, and social indicators (Sustainability
Indicators Project, 2000, and available at http://www.centex-indicators.org/), and New Jersey
Future recently published its first Sustainable State Project Report (New Jersey Future, 1999, and
available at www.njfuture.org).
New Jersey’s Sustainable State Project is particularly interesting because it creates a
performance measurement system, using goals and indicators, for achieving sustainable
development at the state level. The Project is the result of a public-private partnership between
the State of New Jersey, and New Jersey Future (NJF). Chartered in 1987 by a group of New
Jersey's civic, environmental, and corporate leaders, NJF is a non-profit, non-partisan
organization dedicated to achieving sustainable development, and improving the long term
quality of life in New Jersey. NJF was a key player in creation and acceptance of New Jersey’s
landmark state development and redevelopment plan (New Jersey’s State Master Plan for
Growth and Infrastructure Development).
Like Sustainable Seattle and JCCI, New Jersey Future has received national and international
recognition for its goals and indicators. The goals and indicators were created through a twoyear public process, involving thousands of New Jerseyans from all walks of life, including local
officials, environmental groups, business interests, and citizens of every stripe. This process
used public meetings in all parts of the State, including three major public conferences, and
dozens of other working sessions. The result was the 1999 report Living With the Future in Mind
containing 11 goals for the future of New Jersey, and 41 indicators to track progress toward
achieving the goals (New Jersey Future, 1999). Governor Whitman issued an executive order
endorsing the goals and indicators, and directing all state agencies to pursue polices that comport
with them and to report annually on their progress. The first progress report is expected in the
fall of 2000. As a next step, New Jersey Future is working to broaden the scope of the project to
link the statewide goals and indicators, and statewide government policies, to similar goals and
indicators being created by some local governments.
Link 3: Citizens engaged in government policy and implementation. In the 1970s, many
localities created or recognized geographic district-based citizen organizations with formal
government participation roles. These still exist in many U.S. communities, including New York
City; Portland, Oregon; Saint Paul, Minnesota; and Dayton, Ohio. In Dayton, volunteer citizens
serve on seven Priority Boards that participate in city affairs in numerous ways. For example,
Priority Boards rank and channel neighborhood needs and improvement requests into the City’s
budget process before departments prepare their annual budget estimates. Each board has an
“administrative council” of department staff who work with citizens to coordinate service
July 14, 2000
6
responses to neighborhood problems. Recently, the City of Dayton used separate citizen
working committees, including representatives from the seven Priority Boards, to develop a new
city strategic plan. From 1997–99, Priority Boards worked with the University of Dayton, under
a Sloan Foundation grant, to develop Quality of Life Indicators. The Priority Boards’ success in
using the indicators (their first major attempt is in developing strategic plans for each Board’s
district) can determine whether Dayton achieves “strategic alignment” as described below.
Link 4: Strategic alignment. The Citizens League research team highlighted three areas in the
United States that it believes have demonstrated "strategic alignment": Prince William County,
Virginia; the City of Portland and Multnomah County, Oregon; and the Silicon Valley region in
California represented by Joint Venture: Silicon Valley Network (JVSVN). The potential
benefits of strategic alignment are considerable. By bringing measurement to the foreground
with public engagement, the community focuses on issues and measures that really matter.
Concerted action by government and citizens (including private organizations) creates stronger
solutions by leveraging public and private resources. Performance measurement provides
feedback on how well goals are being achieved, and helps communities focus public and private
resources on still better ways to achieve results.
Prince William County, Virginia, follows a systemic “governing for results” cycle that starts
with citizen involvement in strategic planning. The County began its strategic planning process
in the early 1990s. It adopted a set of strategic goals, outcome indicators, and strategies that
guide policy and resource allocation. By ordinance, the County must complete a major plan
update every four years. The County uses a variety of citizen involvement techniques to update
the plan, including community outreach meetings, citizen surveys, citizen task forces, and public
hearings to assist the governing body in developing its plan. Citizen priorities then “flow
through” from policy planning to implementation, as the County has built a cycle that links
strategic planning, performance targeting, budgeting, and learning from measured results.
In the City of Portland and Multnomah County, Oregon, "alignment practices" include a range of
community outcome and service measurement efforts, numerous City and County citizen
committees, and cross-jurisdiction and cross-sector collaborations. Portland’s 95 neighborhood
associations are organized into seven District Coalitions, which provide opportunities for citizens
to raise issues for City attention, and to participate in service co-production. County Citizen
Budget Advisory Committees (CBACs) review county department budget proposals, and have
cited departments’ “key results measures” and funding requests that contribute to “County
Benchmarks” in their reports to the County Board (Multnomah County Central CBAC, 1998).
The Portland-Multnomah Benchmarks (http://www.p-m-benchmarks.org/), which track quality
of life, environmental, social, and economic indicators, are overseen by a Progress Board of City
and County officials and prominent citizens, and staffed by the City Auditor’s Office, which also
prepares City SEA Reports. Recently, the County Auditor held citizen focus groups to help
determine important issues for reporting in forthcoming County SEA Reports. In a collaboration
of the Chamber of Commerce, the County, the City, and the Portland School District, eight
“Caring Communities” have been formed (around high school districts) to involve citizens in
identifying needs and priorities and developing community-specific solutions.
July 14, 2000
7
Joint Venture: Silicon Valley Network (JVSVN) (http://www.jointventure.org) is a collaboration
of corporations, local governments, and educational and community institutions in a Northern
California region of over 2 million people covering all of Santa Clara County and parts of three
other counties. JVSVN involves citizens through focus groups and working committees, and
publishes the Index of Silicon Valley—long-term economic and quality of life indicators of
sustainability of the region for people to live, and for businesses to compete globally (Henton at
al, 1998). JVSVN also helps develop, and tracks progress on, collaborative action initiatives to
improve the region. These include regulatory streamlining projects that help local governments
reduce permitting time and cost, and make requirements uniform in the region to simplify
compliance to aid business expansion. In the 21st Century Education Initiative, collaborative
teams have been formed with 10-15% of the region’s public schools. Each team includes parents,
teachers, and administrators from a school district, as well as outside resources and expertise.
Other initiatives include an environmental partnership, a “Healthy Community/Healthy
Economy” initiative, and economic development projects (Joint Venture, 1995).
In all three of these regions, strategic alignment has resulted in better focusing of community
resources. For example, the budgets of both Prince William County and Multnomah County
have included multi-million dollar resource shifts to achieve priority community goals.
However, public budgets tell just part of the story. Private individuals and groups leverage
public resources when they co-produce services. Portland District Coalitions organize
cooperation with community policing and spur a great amount of volunteerism and local
sponsorship to improve neighborhoods, from tree plantings and “adopt-a-park,” to traffic
calming, to “eco-teams” working on environmental sustainability. In addition, cross-sector
collaborations leverage large-scale public and private resources on specific projects. JVSVN has
supported eleven collaborative action initiatives, with project budgets ranging from about
$100,000 to over $1,000,000 per year, including provision of funds and expertise by Silicon
Valley corporations.
Tracking of priority outcomes keeps these communities focused on important improvements, and
helps them demonstrate success. JVSVN requires each action initiative to specify measures of
tangible results expected, and benchmarks for tracking progress. For example, several school
improvement teams have demonstrated measurable success in improving student achievement.
Some of Prince William County’s broadest success measures come from its citizen survey,
conducted annually since 1993. Citizen satisfaction related to most priority goals increased, and
overall satisfaction with “value for tax dollars” rose from 65.5% in 1993 to 80.6% in 1998
(Center for Survey Research, 1998).
Opportunities for Alignment at the State and Local Levels in New Jersey
Although successful in informing the public, and sometimes in spurring specific government
action, a shortcoming of many community indicator initiatives is the lack of a direct linkage with
continuing activities of government. Conversely, a shortcoming of many internal government
performance measurement initiatives is their lack of direct linkage to community outcomes.
Maximizing the value of performance measures, whether at the community/sustainability level or
the government level, requires linking measures of government performance directly with
measures of community trends and outcomes that matter to the public.
July 14, 2000
8
New Jersey’s Sustainable State Project is perhaps the only current statewide initiative attempting
to achieve strategic alignment as described in link 4 of the Governance Model. Because of the
broad public process behind it, the 11 goals for the future of New Jersey, and the 41 indicators to
track progress toward achieving the goals, have received support from constituencies that are
normally in opposition, and from the highest levels of government as well as from grass roots
activists and community groups.
The 11 Sustainable State goals are in the following areas: Economic Vitality, Equity, Strong
Community Culture and Recreation, Quality Education, Good Government, Decent Housing,
Healthy People, Efficient Transportation and Land Use, Natural and Ecological Integrity,
Protected Natural Resources, and Minimal Pollution and Waste.
Each area has a specific statement defining the goal. For example, for Efficient Transportation
and Land Use, the statement is:
GOAL: A choice of efficient, convenient, safe and affordable transportation and land use
options, providing access to jobs, shopping, recreational centers, schools, airports and rail
centers.
The indicators for this goal are:
a. The cost of the backlog of repairs on New Jersey’s state roads and bridges,
b. The average number of vehicle miles traveled by New Jerseyans,
c. The number of “transit friendly” vs. auto-dependent new office developments, offering
transportation options to New Jersey commuters, and
d. The annual number of traffic fatalities.
Indicators for other goals include, for example, crime rates, voter turnout, rates of infectious
diseases, greenhouse gas emissions, graduation rates, unemployment, poverty levels, housing
affordability and choice, air and water quality levels, solid waste production, beach and bay
closings, and open space preservation.
Through the goals, and the public process that created them, New Jersey Future has been able to
create a better consensus on where the state needs to go to achieve sustainable development and
improve the quality of life for New Jerseyans. The indicators give citizens and decision makers
clear feedback on how well the State is doing in getting there.
It is important to note the role of individual and local decisions in achieving a “Sustainable
State.” The goals and indicators, reflecting the people and interests that created them, are broad
and cover every aspect of life in New Jersey. They are designed to enable citizens, local officials,
state government, businesses, non-profit organizations—everyone in the state—to see how their
actions and decisions will impact the goals and indicators. Achieving success will require actors
and institutions at every level, especially local governments and communities, to use the goals
and indicators in making decisions. For example, counties and municipalities can simply let
local commercial development take its course, or they can work with private developers and
public and private transit services to ensure that commuters to new office buildings have transit
options, thereby contributing to improving indicator “c” above, which will also have a positive
July 14, 2000
9
impact on the other indicators. Lowering traffic fatalities (indicator “d” above) involves
enforcement and infrastructure improvement efforts by the State and localities, as well as
individual decisions by citizens (e.g., whether to drive or use other means for each trip, whether
to wear seat belts and use child seats).
Local officials can also see how zoning decisions will affect several of the Sustainable State
goals and indicators involving, for example, open space, preserved vs. developed land, and
housing. Through the indicators, citizens and local officials can better see the power of
individual decisions that are made every day, on New Jerseyans’ collective ability to achieve the
quality of life expressed in the Sustainable State goals. How we heat our homes, how much we
drive, where and how we build and develop our towns. These are all small local decisions that,
collectively, will be decisive in creating the New Jersey of the future. Later in this article an
opportunity for local government to link to the Sustainable State will be discussed.
The goals and indicators are also representative of the three systems—economy, environment
and society—described in the Sustainability Model (Figure 2). Achieving sustainable
development means keeping each of these systems healthy and functioning. All too often,
environmental decisions at every level—whether by a local public works department, by a town
council as advised by its environment committee, by a corporate environmental division, or by
the State Department of Environmental Protection—are made in a vacuum, without looking at
economic or social impacts. The goals and indicators provide an accessible way for decision
makers to simultaneously evaluate economic, social, and environmental impacts.
State-level Alignment in Progress
New Jersey’s sustainability initiative has been built on a public-private partnership, which has
been crucial to the broad acceptance the effort has received thus far. The public process was run
by New Jersey Future, a private, non-profit corporation. State government had input to the
public process, but the final content was reflective of the views of a broad cross section of citizen
and interest groups. Despite the lack of State control over the content, at the conclusion of the
public process Governor Whitman endorsed the Sustainable State Goals and issued an Executive
Order (EO-96) directing State Agencies to:
a. Pursue policies that comport with the goals.
b. Collaborate in the exchange of information among departments and agencies, and
establish institutional mechanisms to encourage the achievement of the goals.
c. Report the Governor annually on progress toward goal achievement.
As a result of this executive order, as of July 2000 a state government Interagency Sustainability
Work Group is creating a report that will describe what each major state agency is doing, and
will be doing, to achieve the sustainability goals. The report will also attempt to link the
Sustainable State goals and indicators to internal government performance measures and targets.
If it continues and is nurtured, this process could ultimately result in the creation of a set of
performance measures for each State agency that is aligned, or “nested,” with the broad
community performance measures and goals of the Sustainable State Project. (Nesting is the
local New Jersey parlance for alignment of performance indicators.)
July 14, 2000
10
Aligning state government operations with broad goals and indicators that are accepted by
citizens is a potent combination that maximizes the value of both government and citizen efforts.
State government is able to gauge its activities and progress against performance measures that
are reflective of public desires. By linking to the Sustainable State goals and indicators,
government managers have the added security of being able to invoke the publicly accepted
goals and indicators in defense of their work and decisions. Through strategic alignment, the
citizens and other participants in the Sustainable State Project will be able to judge how
government is working to achieve their wishes.
Intergovernmental Alignment in Progress
Strategic alignment, as defined by the Effective Governance Model, refers to linking
performance measures, government policy and implementation, and citizen engagement to
achieve outcomes that matter to people. The Sustainable State Project is helping to build such
alignment at the State level. Another important way to align measurement initiatives is between
different levels of government. In our federal system, government solutions should be
implemented by the level of government—federal, state, local—most appropriate to the task.
Federal and state governments have power and resources and are able to look at the big picture.
Smaller governments have knowledge, and often a better ability to implement programs at the
local level and best tailor them to the needs of their citizens.
Performance measures can act as a crucial aid when different levels of government attempt to
coordinate with each other. A prominent example is the United States Environmental Protection
Agency’s (EPA) use of “Performance Partnership Agreements” (PPAs). Implementation and
enforcement of most federal environmental laws and programs, such as clean air and water, is
conditionally ceded by EPA to state government. EPA is pioneering the use of performance
measures as the primary vehicle by which it determines if a state is successfully implementing its
programs, and hence gets to keep its implementation authority and funding. EPA has national
performance measures and targets for environmental quality that are directly linked to state
performance measures and targets through the PPAs. In theory, when the measurement systems
are aligned, each state meeting its target for a particular program will result in the EPA reaching
its national target for that program.
State and local governments are also using this type of intergovernmental alignment. New
Jersey’s Department of Environmental Protection (DEP) has announced an initiative with the
City of Bayonne to develop a State-local PPA. The voluntary agreement would set performance
targets for the City, and give the City greater authority and flexibility to make implementation
decisions on how to achieve the targets. Similar agreements are being investigated at the county
level. DEP benefits by not having to expend resources to implement certain programs involved
in the agreement. Citizens in the Bayonne region win because the targets set in the agreements
will improve environmental quality. The City of Bayonne wins because it gets increased control
of how it will go about achieving its targets, it gets more assistance from the State, and it can
tailor City programs to local realities.
The New Jersey DEP-City of Bayonne PPA is an example of an intergovernmental version of
alignment involving link 1 of the Governance Model, in that it is a form of “managing for
results” involving internal performance management at two levels of government—three levels if
July 14, 2000
11
the state’s link back to the U.S. EPA is considered. These types of intergovernmental alignments
are growing in use, driven, to some extent, by increased implementation of the federal
Government Performance and Results Act in programs that receive federal funds, but are carried
out by states and localities. However, examples of intergovernmental alignment of measurement
and improvement that also involve citizen engagement (as in Governance Model links 2 and 4) at
different levels of governance are hard to find. To some extent, the “Caring Communities
Initiative” in Portland and Multnomah County, Oregon, provides such an example. The initiative
involves engagement of citizens, public and private institutions, and several local governments,
with links to the Portland-Multnomah Benchmarks and Multnomah County Benchmarks. Those
local benchmarks (which are community and regional outcomes) are also linked to the State of
Oregon’s benchmarks of social and economic indicators. The Joint Venture: Silicon Valley
Network (JVSVN) also provides a partial example, as improvement initiatives involving citizens,
corporations, school districts, and several local governments in the region are linked to
sustainability indicators in the Index of Silicon Valley. However, while JVSVN has called issues
of concern to the State’s attention, there is no formal linkage of these efforts to the State.
Local Governments Can Link with New Jersey’s Sustainability Goals and Indicators
The Sustainable State goals and indicators, although broad and informative to any New Jerseyan,
only capture issues that are important statewide. Many of the bread and butter issues that
communities and local governments must deal with are not influenced at the state level, or are
not common enough to be of statewide concern. Also, the statewide indicators do not illuminate
regional differences in many of the indicators. For instance, the statewide poverty rate (generally
between 6% and 12% in New Jersey) is an important issue. However, in depressed inner cities
and particular neighborhoods, the poverty rate may be double or triple the state average. Open
space is another example. Some rural municipalities and counties have an abundance of open
space. Others, such as Hudson County, or the City of Newark, are almost completely built out.
For these reasons, it is important for municipalities and counties, and perhaps even
neighborhoods, to develop their own citizen-based performance measures reflective of local
conditions, values, and priorities.
New Jersey Future, in cooperation with the NJDEP, is developing a pilot program that will
provide New Jersey counties and municipalities with an opportunity to develop local quality of
life or sustainability goals and indicators, and to nest them with the Sustainable State goals and
indicators. Through this pilot, local governments would receive technical assistance, funding,
and other resources. Partnering with the Sustainable State Project, participating local
governments would convene a public process to develop their own set of goals for the future of
their town, and create indicators to track progress toward achieving their goals. The local goals
and indicators would be nested with the statewide Sustainable State goals and indicators. The
first product would be a report that can be used to guide local citizens and officials in making
decisions about the future.
Once the local goals and indicators are complete, there will be an opportunity to develop a
voluntary Performance Partnership Agreement with the NJDEP. The local government and the
NJDEP will identify mutually agreeable targets for one or more of the local indicators. In
exchange for meeting those targets, the DEP will provide regulatory flexibility, technical
assistance, and other rewards. If the local partner does not meet the targets, the only penalty is
July 14, 2000
12
the lack of a reward. As an example, one of the issues being tackled in the Bayonne PPA is open
space. This dovetails nicely with the DEP and Whitman Administration goal of preserving one
million new acres from development. It also links directly to the Sustainable State indicator of
preserving open space. DEP has given technical support, project fast tracking, and assistance in
locating funding. The DEP also is helping to secure for Bayonne a low cost 100-year lease on
property from the Department of Transportation. Other issues that are in the PPA are air quality,
water quality, and the management of combined sewer overflows.
This concept could also be applied to other agencies, and issues that are not environmental. New
Jersey has official health and educational targets. The state’s success in achieving these targets
will be determine, in large part, by local and county decisions and programs. One of the official
goals of the Department of Health is to reduce the gap in infant mortality between whites and
African Americans. Currently the mortality rate for black infants is double that for white infants.
To reduce this gap, and achieve the statewide target, will require coordination with hospitals,
local health clinics, and city and county health agencies. It will also require significant aid from
state government. Achieving educational goals, such as increased performance on proficiency
tests and higher graduation rates, will similarly require local coordination in conjunction with
state assistance.
The advantages to both the local and state partners are significant. The State is assisted in
achieving its goals and targets by the coordinated efforts of the local partner. The State is also
relieved of some of the responsibility for implementing and enforcing its programs in localities
with PPAs, thus freeing up resources to focus on other problems. The local partner benefits from
the resources the state provides in setting up a goal and indicator performance measurement
system. Once in place, regardless of other state support, such a system can be instrumental in
improving the local quality of life, and achieving the desires of the community. In addition, state
resources can be leveraged when state and local indicators and targets are the same.
Another advantage of this type of nesting of performance indicators is coordination between
individual municipalities and counties through linking to the State. It provides opportunities for
regional cooperation and coordination to achieve local, regional, and statewide objectives,
without working at cross-purposes. Each player is able to see how they fit into the larger picture,
and how they fit into the plans and aspirations of their neighbors.
Interested municipalities and counties should contact New Jersey Future, in Trenton, for more
information.
A Special Concern: Integrity of Performance Measures and Data
Local governments present public performance data in various forms including the annual budget
document and separate reports such as the Mayor’s Management Report in New York
(www.nyc.gov/html/ops/html/mmr.html) and Boston, and Service Efforts and Accomplishments
Reports in Portland (http://www.ci.portland.or.us/auditor/audser/htm/summary280.htm) and
Prince William County (http://www.co.prince-william.va.us/budan/sea_pdf/default.htm). In
addition to paper reports, some communities are using the Internet to make data available, with
the possibility of electronic updates that are more frequent and complete than written reports. If
finance and budget officers are to be responsible for the overall development, systemic
July 14, 2000
13
improvement, and reporting of performance measurement for their local governments, they must
eventually be concerned with the relevance of the performance measures and the validity and
integrity of the data that is being reported in their organization’s reports. This is a key role if
local governments are to maintain the legitimacy and usefulness of their performance
measurement and reporting systems.
More and more local finance and budget officers are being called upon to provide their assertion
as to management’s representation of the level of performance that has been achieved. In some
local governments, proactive internal auditors are playing a role of auditing or attesting to
performance reports and data. Verification by individuals with some level of independence from
those who compile the data can strengthen citizen confidence in performance reports.
The GASB in Concepts Statement No. 2 (GASB, 1994) presents six characteristics of effective
performance measurement information (data) that finance and budget officers need to consider
when developing a new performance measurement system, or maintaining the current one.
These include:
1. Developing performance measures that are relevant. A broad array of measures should be
used to meet the diverse needs of various users as well as be linked to the goals and
objectives of the organization. Measures should have the capacity to make a difference in a
decision and reflect changes in actual performance.
2. Presenting data in a way that is understandable to users. To convey measurement data in an
effective manner many local governments have found that a combination of graphs, tables,
charts, and text work best. The data should also be brief, clear, concise, and presented in a
plain, un-technical language that balances good and bad news. With the increasing use of
Geographic Information Systems (GIS) local governments have the ability to disaggregate
and present performance data at a level of detail that is of greater interest to its various
readers, and to display data in compelling ways on maps. Readers are often more interested
in information that directly relates to their lives and the neighborhoods they live in.
3. Presenting performance measurement data in a manner that allows for comparability. This
can include: comparing information from previous fiscal years with the current years’
performance; comparing actual performance with targets set at the beginning of the year;
comparisons with similar jurisdictions; comparisons with technically developed standards
and norms; comparisons between different geographical areas or between different client
groups within the same jurisdiction; and comparisons of public sector costs and results with
those of private organizations that perform similar services or functions.
4. Presenting performance measurement data in a timely manner. Measurement data must be
available to citizens and decision makers before it loses its capability to influence a decision.
5. Providing performance measurement data consistently from period to period. This is
important so that users can compare performance over time. Any change to a measure’s
definition or methodology of data collection should be properly documented and reported.
July 14, 2000
14
6. Providing performance measurement data that are reliable. In order to ensure reliability,
systems need to provide controlled and verifiable data. Performance measurement data
should be subjected to analysis similar to that used for financial information systems.
Measures also need to be correctly defined (e.g., a measure labeled as efficiency should be a
measure of efficiency, not timeliness or quality), neutral, and unbiased.
In Conclusion
Performance measurement is an accepted and growing practice among state and local
governments across the country. Budget and finance officers, who are often centrally involved
in a jurisdiction’s efforts to develop and implement measures, must be concerned with their
jurisdiction’s getting good value for its measurement efforts. While internal “managing for
results” practices help build the internal management value of performance measurement, still
higher value can be obtained from measurement efforts if they are also linked to citizen
engagement, so when a government manages for results, it is managing for results that matter to
its citizens. To protect the value achieved from performance measures, budget and finance
officers must also be concerned with assuring the integrity of performance measures and data.
The Citizens League’s Governance Model emphasizes the linkages and alignments among
citizens, measures, and government that help make performance measurement a high-value
proposition, leading to results that matter to citizens. When the Sustainability Model used by
New Jersey Future is also brought to bear, the “results that matter” will be sustainable results, in
the form of regional or community outcomes that are improved for years to come. New Jersey
Future’s Sustainable State Goals and Indicators, and the public process that has made them
highly credible, offer New Jersey local governments an opportunity to link (or “nest”) their local
performance measures to Sustainable State goals and indicators that already have wide public
acceptance. While local communities should still conduct their own citizen engagement
processes to focus local goals and indicators on issues of highest local priority, New Jersey
Future’s goals and indicators give them a ready, citizen-tested point of departure for their local
measurement and improvement efforts. State-local Performance Partnership Agreements
between local governments and agencies such as NJDEP, combined with local citizen
engagement, provide mechanisms to help localities make these high-value linkages and to
benefit from performance incentives from the State, and from improved sustainable outcomes for
their communities and citizens.
References
Center for Survey Research (1998). 1998 Prince William County Citizen Satisfaction Survey
Report of Results. Charlottesville, Virginia: University of Virginia.
Epstein, P., L. Wray, M. Marshall, and S. Grifel (2000). “Engaging Citizens in Achieving
Results that Matter: A Model for Effective 21st Century Governance,” a paper for the February
2000 Symposium on Results-oriented Government by the Center for Accountability and
Performance of the American Society for Public Administration. Available from the Citizens
League on the web at http://www.citizensleague.net/cl/SLOAN/cover.htm .
Governmental Accounting Standards Board (GASB) (1990). Service Efforts and
Accomplishments Reporting: Its Time Has Come: An Overview (Norwalk, CT: GASB).
July 14, 2000
15
GASB (1994). Concepts Statement No. 2 on Concepts Related to Service Efforts and
Accomplishments Reporting (Norwalk, CT: GASB), April.
Henton, D., Walesh, K., Rawson, B., and Luk, S. (1998). Joint Venture’s 1998 Index of Silicon
Valley (San Jose, CA: Joint Venture: Silicon Valley Network).
International City/County Management Association (ICMA) (1999). Comparative Performance
Measurement: FY 1998 Data Report. (Washington, DC: ICMA), December.
Jacksonville Community Council (JCCI) (1999a). Quality of Life in Jacksonville: Indicators for
Progress. (Jacksonville, Florida: Jacksonville Community Council, Inc.)
JCCI (1999b). Creating a Community Agenda: Indicators for Health and Human Services.
(Jacksonville, Florida: Jacksonville Community Council, Inc.)
Joint Venture: Silicon Valley Network (1995). The Joint Venture Way: Lessons for Regional
Rejuvenation (San Jose, CA: Joint Venture: Silicon Valley Network).
Kaplan, Robert (1998). City of Charlotte North Carolina Case # 9-199-036. Cambridge,
Massachusetts: Harvard Business School Press.
Multnomah County Central CBAC (1998). Central Citizen Budget Advisory Committee and
Citizen Budget Advisory Committees Budget Recommendations and Dedicated Fund Review.
(Portland, Oregon: Multnomah County Citizen Involvement Committee), March.
New Jersey Future (1999). Living with the Future in Mind: Goals and Indicators for New
Jersey’s Quality of Life: 1999 Sustainable State Project Report. (Trenton, New Jersey: New
Jersey Future)
Osborne, David and Ted Gaebler (1992). Reinventing Government. (Reading, MA: AddisonWesley), 142–145.
Sustainability Indicators Project (2000). Central Texas Indicators 2000: A Report on the
Economic, Environmental, and Social Health of the Central Texas Region. (Austin, Texas:
Sustainability Indicators Project of Hays, Travis, and Williamson Counties).
Syfert, Pamela A., Nancy C. Elliot, and Lisa B. Schumacher (1997). “The Search for a Better
Performance Measurement System: Charlotte’s Balanced Scorecard.” August 1997 paper
attached to Charlotte City Manager Pamela Syfert’s presentation to the May 1998 Managing for
Results Conference of the LBJ School of Government, University of Texas, Austin.
Willoughby, Kathryn and Julia Melkers (2000). “Implementing PBB: Conflicting Views of
Success” in Public Budgeting and Finance, Vol. 20, No. 1, Spring, 105-120.
July 14, 2000
16
ABOUT THE AUTHORS
PAUL EPSTEIN is Principal of Epstein and Fass Associates (www.epsteinandfass.com), a New
York City-based consulting firm. He co-leads the Citizen's League research team on citizen
engagement in performance management, and is a member of GASB's performance
measurement research team. His recent focus in assisting organizations has been on outcome
measurement and management, and on using balanced scorecard approaches for focusing,
measuring, and managing strategy. He has delivered presentations to business leaders on using
the balanced scorecard for sustainable communities and profitable companies. He has over 25
years’ experience in performance measurement and improvement, strategic planning, customer
service, and management training for all levels of government and non-profit organizations.
RANDALL SOLOMON is with the Resource Renewal Institute (www.RRI.org) in San
Francisco. At the time of publication of this article, he directed New Jersey Future's Sustainable
State Project. He still assists New Jersey Future (www.njfuture.org), and he writes and speaks
frequently on sustainable development. He served on policy development working groups at the
NJ Department of Environmental Protection and the US Environmental Protection Agency and
serves on the boards of many civic organizations. Before joining New Jersey Future, Mr.
Solomon was an Americorps National Service member, a Fellow researching sustainable
agriculture at Israel's Ben-Gurion University, and a National Park Ranger.
STUART GRIFEL is a Project Manager/Auditor-in-Charge for the Office of the City Auditor
(www.ci.austin.tx.us/auditor), Austin, Texas where he is responsible for conducting performance
audits and providing consulting services and performance measurement assistance to city
departments. He is also a member of the Citizens League research team on citizen engagement
in performance management. He has over 20 years’ experience in government performance
measurement, operations review, performance auditing, and productivity improvement.
Recently, Mr. Grifel served as an Associate Director for the National Center for Public
Productivity at Rutgers University in New Jersey.
This page updated July 2001
July 14, 2000
17