Winnipeg can Learn from Phoenix

Commentary, Municipal Government, Frontier Centre

The City of Phoenix, Arizona has been on a roll for several decades. It is the stepchild of air conditioning, a post-World War II technology that made life in the sweltering Arizona desert comfortable.

The place has never looked back. In the late 1940s, when Winnipeg was near its zenith, Phoenix was a sleepy desert community of around 50,000 folks, a dusty truck stop. Today, it’s the second-fastest-growing city in the U.S., a booming community of 1.2 million people that sprawls exuberantly into the Sonora desert.

What, besides affordable air conditioners, explains the emergence of this dynamic metropolis in a hostile and barren place in the middle of nowhere?

First, a light-handed approach to labour-market regulation and taxation has attracted investment. As California choked on growth, rising taxes and over-regulation, thousands of firms migrated to Arizona, demonstrating the benefits of a competitive public policy framework.

More important was the city’s strategy of pursuing excellence in its municipal operations. In 1994, Phoenix won the prestigious Bertelsmann Foundation award as the best-managed big city in the world. The award recognized the innovative nature of Phoenix City government and its constant commitment to improving the cost performance of city services.

Phoenix spawned the competitive model adapted so successfully in Indianapolis. Still popularly dubbed the "Phoenix Model" in the literature of high-performance government, it sets up teams of managers and employees who bid against private companies to provide services. Moving city people out of the traditionally sleepy, low-performance government environment into a competitive, results-oriented framework forced huge productivity gains. In fact, municipal work teams now generally outbid big private sector companies like Laidlaw and BFI for garbage-collection contracts. The real cost of trash disposal has fallen by over 50% per house since the competitive model was introduced in 1978, with savings passed on to citizens in the form of lower taxes.

The first lesson from all this? A competitive framework can liberate city workers from oppressive bureaucratic thinking and structures, enabling them to produce high-quality services at falling prices. That surprising outcome (for Winnipeggers) is possible if you follow the cardinal rule of high-performance government-design your system to focus on results, not on process. The City of Phoenix produces a full range of services for its 1.2 million customers with a highly paid workforce of about 12,000. Not bad, huh?

Another lesson is found in Phoenix’s city charter, the legislation that outlines how the place is governed. Section 4 states clearly that elected officials must have no direct involvement in the administration of the city. In fact, if they do, they are to be removed from office. They act, instead, as the board of directors, which defines the vision, and direction of the city, the "what" of the organization. The "how" is left to a city manager, who has considerable freedom to deliver the vision in the most efficient way possible. If not delivered, however, the manager is replaced.

In other words, clear roles reduce confusion and avoid the unfocussed government Winnipeggers have been stuck with since 1972. Our structure now allows councilors to dabble ineffectively in administrative areas where they have little expertise, while the ship drifts aimlessly into uncompetitive obscurity.

Winnipeg has specialized in policies that have produced little growth for 25 years. It can learn from Phoenix that excellence in service delivery and a focus on performance are at the heart of a thriving city, along with clearly defined roles for elected officials and management.