A General Performance Metric for Tracking City of Toronto Staff Operations
Note: See An Integrated Multi-Dimensional Budget Model for Municipalities for details about the underlying budget model used to support this metric.
I call the metric I’m proposing the “direct staff support weighting”. It’s a ratio of the direct costs required to support staff, against the salaries and benefits of those staff.
Here’s how it looks at the highest level for the 2021 budget (see the 27.87% figure):
It can be calculated to any level for which staffing and costing data are both available. This is currently the program level (divisions and agencies) at the City of Toronto. In principle it could be calculated to the cost centre level (of which there are ~13k).
The direct staff support costs calculation requires the isolation of direct from indirect service costs, which is the separation of services delivered directly by staff from services delivered as flow-through funds or outsourced services.
Direct service delivery costs include Salaries & Benefits, Materials & Supplies, Service & Rent, minor Contracted Services, Equipment, and Other Expenditures for services delivered directly by City of Toronto staff.
Direct service delivery costs exclude Outsourced Service Delivery (major contracted services — my estimates), Flow-through Subsidies and Grants (my estimates), Net Financing Costs, Net Internal Charges, and Non-Program Costs.
My inclusions in flow-through costs are here; in outsourcing costs are here. They are taken from the City of Toronto open dataset Operating Budget Program Summary by Expenditure Category for 2021 (the most recent dataset available). The dataset provides a good level of detail, over 17k line items.
Finally, the ratio is supported by separating salaries and benefits from other direct service delivery costs which are then interpreted as representing direct staff support costs. So direct staff support costs include Materials & Supplies, Service & Rent, minor Contracted Services, Equipment, and Other Expenditures. The ratio then becomes the direct staff support costs divided by the staff salaries and benefits.
This ratio is not a precise figure; I do not have the information to make fine-grained distinctions. Moreover some definitions of direct staff support and indirect service support need further clarification. No doubt some classifications need to be reviewed and revised. But I don’t think that for analytical purposes the figure needs to be precise; it just needs to be close. For analytical purposes, I think the principles, and the results, are solid. This is certainly true for demonstration purposes offered here. The classifications could be improved internally by the City as needed.
The benefits of this performance metric are clear. It provides quick insights into the staff operations of the City. In principle the direct staff support ratio should be relatively stable over time, given service continuities. Changes would flag areas for investigation. Moreover the ratio could be used for comparisons between organizational units within government. The comparative figures should be relatively stable over time as well. One would expect street car operator support costs to be consistently higher than office worker support costs for example.
Any changes in trend, or changes in comparisons could be significant, and would quickly flag areas for investigation.
A consistent data model and dataset are required to make this work. The required model and dataset are not offered directly by the City, so I’ve tried to isolate the flow-through grants & subsidies, and outsourced service delivery costs. See An Integrated Multi-Dimensional Budget Model for Municipalities for some background regarding the underlying model that I use. Here’s a snapshot of the expense distinctions in the high level resource allocation budget:
Note that both flow-through and outsourcing costs are substantial. These are interesting concerns in themselves, but being removed from Direct Service Delivery presumably simplifies the dynamics of the model. The direct staff support costs are reduced to 13.3% of the budget. Combining these with the 48.1% Salaries Benefits gives the Direct Service Delivery budget percentage of 61.4%.
Let’s take a look at some examples.
In the following figure, there are two large programs (Toronto Parking Authority — TPA, and Fleet Services) that have direct staff support weightings substantially over 100% (distinct from the average of about 28%). So let’s look at those.
For the TPA, selecting expense allocations from the interactive 2021 budget dashboard, we see that there is a high Service & Rent figure.
From the same dashboard, we can see the detail (as much as is available) of this line item.
This makes some sense, though it could be further investigated if more information were available.
For Fleet Services, we see that Materials and Supplies costs are quite high.
So we look at the detail for Materials & Supplies, this time from the Activities listings.
From this we can see that Fleet Maintenance and Fuel Acquisition are the highest Materials & Supplies costs, which also makes sense.
Finally, let’s look at Toronto Water, which has a direct staff support weighting which is closer to the average, but still high at ~65%.
Looking at Toronto Water Activities, selected for Direct Service Costs, we see that Wastewater Treatment is an outlier at $120.6M.
So we select the Wastewater Treatment dimension, still with the Direct Service Delivery Resource Allocation Grouping.
Again we see that Materials & Supplies is quite high at $54.5M. So we look at the Materials & Supplies details.
Energy and Chemical purchases are the highest amounts. This makes sense.
Such interactive investigations can lead to insights, and potentially corrections. It’s also an example of the ability to use performance indicators generally, given a stable underlying budget model, and access to interactive dashboards.
The full benefits of the the direct staff support weighting can only be realized over time. For one thing it would require the City of Toronto to implement a redesign of its budget reporting to include separate flow-through and outsourced costing. I hope that this article will provide support for such deliberations.
Henrik Bechmann is a retired software developer with an interest in all things related to the Toronto budget. From 2015 to 2018 he was the lead of the budgetpedia.ca project. Twitter: ‘@HenrikBechmann’
