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A couple of days ago, our “audit watch” blog post brought up the common problem of water loss — both actual water that leaks from pipes and water revenue that leaks from questionable accounting systems. The first step in the battle to stem the leaks is to improve the data. That means establishing requirements for water utilities to build up, and publicly report, their information on where the leaks are and what’s causing them. This issue is increasingly coming up in legislatures. For example, on Valentine’s Day,  , a New Jersey legislative committee  put forward a bill requiring water companies to audit systems to locate  water leaks. According to the National Resources Defense Council (NRDC), these audits have the potential to save both millions of gallons of water and millions of dollars in revenue. Earlier this month, the NRDC published a map showing existing state policies for gathering and reporting on water loss. It has kindly given us permission to reprint that map here. Note: The states that are colored blue require “system specific volume-based performance benchmarking”; the green states require annual use of free audit software from the American Water Works Association (AWWA); the dark yellow/orange  states require annual water loss reporting using AWWA standard terminology; the light yellow states require “rudimentary water loss reporting” and the states that are not colored in require no action.

When a city, county or state releases its Comprehensive Annual Financial Report later than usual, the delay is usually for understandable reasons: a new computer system stalls action, say, or a short-staffed government is stymied by the need to revamp financial reporting due to a recently introduced accounting standard. But sometimes, the motivation for a delayed report may be different. We learned this nearly 25 years ago when we were evaluating the management of city governments in Financial World magazine. We had given a mediocre grade to Chicago, complaining about its late financial reporting. Later we met with that city’s financial officials who told us, off the record at the time, that the delay was purposefully intended to shield information from unions.  The financial report was going to reveal a surplus that could have been used by union leaders to get an edge in the then-ongoing contract negotiations. The city’s logic: Why tell the unions the city had more money in its coffers than the unions already knew? No one in that room probably remembers the conversation (except us), and most are probably off the payrolls (either because they’ve moved, retired or died). So, we feel like a quarter of a century is enough time for us to tell the story without jeopardizing anyone who didn’t want it revealed back then. (Plus, we have no reason to believe that Chicago ever used the same delaying tactic again.) Still, the revelation of that day resonated back in December, when we read an article in the Half Moon Bay Review in San Mateo County, California. The report focused on a county financial report that was due in October, but wasn’t released until late November, two weeks after Election Day, when a 20-year-extension of a half-cent sales tax increase was approved by voters. In the financial report, the county pointed to its strong economy and rising revenues, including “the sixth straight year that historic highs have been set” on the draw from its property taxes. Would voters have approved the sales tax increase if they knew that property taxes were doing so well? We think that’s a good question. The issue might have gone unnoticed except that a Civil Grand Jury had complained about the openness of the county’s finances three years before and the foreman of the jury, a retired attorney, was on hand to draw attention to this most recent issue. Said he, “I think it’s problematic and very suspicious . . . It’s problematic when the county does not provide the most current information before an election relating to taxes.” In fairness, beyond the comments in the article, we have no reason to suspect the county of purposeful delay. In fact, the Half Moon Bay Review credited the county with generally improved financial transparency and the county controller’s office said the delayed report release was due to increased financial reporting requirements for pensions. That’s totally plausible. Still, the lesson we learned from Chicago long ago, still resonates.  When government disclosures are late, it’s probably a good idea to understand exactly why.

We’ve been seeing quite a lot of attention lately going to the topic of water loss – either from actual leaks in aging pipes or accounting issues that cut into water revenue. The Atlanta City Auditor’s office has a water loss audit coming up  and in Kansas City, a largely unpublicized 2015 audit undertaken by the city water services department just resurfaced, thanks to an open records request filed by Flatland, a digital magazine in Kansas City. According to information pulled from the audit by Flatland, Kansas City pumped 28 billion gallons of water into its distribution system in 2015, but a third of those gallons were lost, through water theft, broken meters, leaks, or other reasons. Because of the significant water loss problem in Kansas City, the article says the audit found about 40 percent of the water pumped into the distribution system does not generate revenue. Kansas City Water Services has been working hard to resolve both the city’s leaky pipes and its leaky water accounting systems. Getting better, more accurate data, is one key. Real water loss is a particular problem in areas that have older infrastructure. The New York State Comptroller’s Office came out with a report this month that looked at the state’s challenges with aging water infrastructure. The report noted that its audit of local water systems have identified “excessive water loss” both from leaks and water main breaks. In New York City, where some of the water infrastructure was put in place in the mid-19th Century, between 350 and 600 water main breaks have occurred annually between 1999 and 2015, according to the comptroller’s report. Several audits have pinpointed problems with water meter inaccuracy, including one in Austin in 2015. Water lost to inaccurate meters does not mean that actual water is leaking, but that water to some citizens may be under-counted putting upward pressure on rates. Accounting issues were also the target of an Inspector General audit in Chicago in 2015.

Over the course of the years, we’ve repeatedly heard a series of mantras about the reality of state and local government. We’ve heard them from people at all levels of government and sometimes from established authorities. We’ve been accumulating a list of such maxims that are — unfortunately — not true. Of course, some of the ten items that follow are certainly valid  in some places. But we’ve heard them any number of times when the evidence demonstrates that they’re wide of the mark. We hate to use the word “lies” here. That seems to have become a word widely open to interpretation these days. So, just to be specific, what follows are explanations about the way things work that are frequently NOT the way things work. And the list is based on both our own experience, and the understanding of states and localities we’ve accumulated over the last quarter of a century. “We know we are in financially sound shape because we have to pass a balanced budget.” (from states) “It’s impossible to fire a public sector employee.” “We’ll solve this problem by setting up a commission. Or a study group.” “Our transparency website means our government is transparent.” “Buying new technology will be the key.” “Merit pay is pay based on merit.” “The key reason we have a huge unfunded liability in our pensions, is that our benefits are too rich.” “You should just look at the general fund in order to analyze our city or state’s financial condition.” “You can always trust our data.” “Our government can be run like a business.”

A couple of days ago we posted some details of the city benchmarking report that San Francisco’s Controller’s office put out (through its audit division). That first report focused on demographics, public safety and “livability”. Two more reports were released at week’s end. One is about transportation and finance. The other focuses on public health and the safety net. We highly recommend all three reports. The comparison should be interesting not just to San Franciscans, but to the other sixteen cities in the benchmark group: Baltimore, Boston, Chicago, Denver, Long Beach, Los Angeles, Miami, Minneapolis, Oakland, Philadelphia, Portland, Sacramento, San Diego, San Jose, Seattle and Washington D.C. (Not all cities are compared on all issues.)

“In great cities, spaces as well as places are designed and built: walking, witnessing, being in public, are as much part of the design and purpose as is being inside to eat, sleep, make shoes or love or music. The word citizen has to do with cities, and the ideal city is organized around citizenship — around participation in public life.” — Rebecca Solnit, from Wanderlust: A History of Walking.

We have always been fans of benchmark reports. They put performance measures into context, allowing cities, counties or states to see how they compare to their peers. Benchmarking isn’t easy, of course. Since the details behind government statistics vary there’s always a risk of comparing the quality of an apple to that of a pear. Or even a watermelon. They also require a certain amount of courage as there’s always the possibility that the benchmarking city will find itself in an unflattering position. That said, there’s a lot states and localities can learn from their neighbors. And there’s a big bonus for the peer entities. They get to take advantage of the results as well, without putting in the work. With that in mind, we would like to bring San Francisco’s benchmarking report, which was released on Valentine’s Day, to the attention of its comparison cities: Baltimore, Boston, Chicago, Denver, Long Beach, Los Angeles, Miami, Minneapolis, Oakland, Philadelphia, Portland, Sacramento, San Diego, San Jose, Seattle and Washington D.C. (Not all cities are compared on all issues.) Some selected facts that San Francisco’s controller’s office presented on how it compares to the other cities: San Francisco has the smallest percentage of residents who are under 18 – just 13 percent. Long Beach had the highest percentage under 18. Miami had the highest percentage of residents over 65 and Minneapolis had the lowest percentage over 65. San Francisco has the highest average income ($112,459) and (not surprisingly) the highest housing costs as a percent of income. Miami had the lowest average income and Denver had the lowest housing costs as a percent of income. Seattle had the highest number of library visits per resident (8) with San Francisco coming in second. Denver had the highest percentage of its population registered as library card holders (74 percent) and Los Angeles had the lowest (31 percent) D.C. had the highest percentage of the population over 25 to hold graduate degrees. Chicago spent the most per resident on parks ($354 for operating costs); Miami spent the least ($31 in operating costs). San Francisco was fifth on the list. ($148) D.C. had the highest number of street cleaning employees, (48 per 100,000 population); San Jose had the least (1 per 100,000). Oakland had the highest number of violent crimes per 100,000 daytime population, while San Diego had the lowest. Philadelphia had the highest police staffing per 100,000 daytime population while San Jose had the lowest. Philadelphia also had the highest jail population while Hennepin County, which handles jails for Minneapolis, had the lowest. There’s lots more in the report and the city controller’s office will be releasing two more benchmark reports this week. The next will be on transportation and finance and the third about population health and the safety net.

In early February, the U.S. Department of Transportation released its annual compilation of transportation stats, a document we always find fascinating. For readers who didn’t have the chance to sift through the 245 pages of data themselves, we’ve selected out the stats that particularly caught our eye(s). The good: • The percentage of structurally deficient bridges declined from 12.0 percent in 2010 to 9.6 percent in 2015. • The majority of airport runways are in good condition. Only 2 percent are considered poor. • About 4.8 million people walked or biked to work in 2014, about half a million more than in 2000. (Boston stands out among larger cities for people walking to work – about 15 percent do.) • Close to 2 million more people worked at home in 2014 than in 2000. • Less than 2 percent of passengers (14.1 million) waited in airport security lines for more than 20 minutes. • In terms of household expenses, transportation declined from 12.3 percent of the total in 2000 to 9.6 percent in 2015. • Deaths per hundred million miles of highway travel fell from over 5.50 in 1966 to 1.12 in 2015. The bad: • The use of carpooling has declined. Nearly 11 million more people drove alone to work in 2014 than in 2000. • Census Bureau reports show that in 1960, 10.3 percent of people walked to work, compared to 3.9 percent in 1990 and 2.7 percent in 2014. • The average annual delay per commuter rose from 37 hours in 2000 to 42 hours in 2014, a 13.5 percent increase, • Although the long-term decline in fatalities is still impressive, highway motor vehicle fatalities rose 7.2 percent in 2015. The highway injury count also increased in 2015 for the first time since 2012. • Pedestrian fatalities have increased from 12.3 percent of the total in 2010 to 14.5 percent in 2015. • Motorcycle injuries increased 62.7 percent from 2000 to 2014.

We’ve wondered lately about whether the intense focus on Presidential executive orders, in both the current and previous administrations, is having an impact on the nation’s governors. Our first instinct was to compare numbers issued, but we realized that their uses are so different that sheer numbers tell an uninformative story. Some governors use very few executive orders, mostly to declare states of emergency. In other states, executive orders may be plentiful, but relatively routine – used for appointments, for example. Do you follow the executive orders in your state? To make this easier, we’ve put together on interactive map with links to each states’ executive orders page. You’ll find it in the Resources section of our website. Of the nation’s new governors, Phil Scott of Vermont, has been among the most aggressive in utilizing seven executive orders in January to set the strategic direction of the state, create new departments (such as the Agency for Digital Services) , and merge others. New Governor Eric Greitens in Missouri has used the early executive orders in his administration to cut back on the creation of new regulations, establish a code of conduct for employees and establish a new position of Chief Operating Officer. (COOs are a topic we tackle in one of our next Governing columns, by the way.) Indiana Governor Eric Holcomb has also been an active signer of executive orders, though mostly he has used them to continue the initiatives of his predecessor, now Vice President Mike Pence. In a number of states, including Alabama, Arizona, Indiana, Maryland, New Jersey, Vermont and Wisconsin, governors have recently utilized executive orders to deal with aspects of the opiate epidemic and other kinds of substance abuse. Some governors have specifically used their more recent executive orders to place themselves in opposition to President Trump’s policies. For example, an executive order signed by Oregon Governor Kate Brown on February 2nd reaffirmed Oregon’s commitment to being “a welcoming, inclusive and compassionate place for all contributing members of our civic community including immigrants and refugees. In his State of the State address on January 24th, Massachusetts Governor Charlie Baker referred to his September 2016 executive order to set a plan for the state government to work with “local governments, business, and non-profits to develop plans to further protect our environment and reduce greenhouse gas emissions.” In the recent past, governors have sometimes run into court challenges for their executive orders. Last July, the Virginia Supreme Court ruled that Gov. Terry McAuliffe’s executive order giving felons the right to vote was in conflict with the Virginia constitution. Similarly, Louisiana Governor John Bel Edwards’ executive order providing protections against discrimination for LGBTQ employees and contractors was struck down last year by the 19th Judicial District Court.

Massachusetts auditor Suzanne Bump has often spoken out about the problem of underfunded maintenance, which may conserve government dollars in the short-term, but creates ballooning future costs and a limited ability to deal with them long-term. Case in point: The February newsletter from her office draws attention to a municipal impact study, which found that Massachusetts municipalities face $17.8 billion in water infrastructure needs over the next 20 years. Climate shifts and economic development will add to that cost burden, she said. The report identifies the greatest needs in the wastewater treatment area, followed by clean water delivery and stormwater management. It suggests a new state water fund to support local water infrastructure projects, but also notes that many local governments have failed to take advantage of loans and grants that are already available. The auditor’s report was based on a survey, which garnered responses from 146 Massachusetts cities and towns (about 42 percent of the total and 88 percent of the Commonwealth’s cities of 50,000 plus population.)

We clearly remember a comment made to us years ago by the budget director of Cuyahoga County in Ohio. We were talking about the general lack of understanding of county government. She sighed and made the following poignant comment. “I’ve worked for Cuyahoga County for more than a decade and my mother still thinks I work for the City of Cleveland.” Counties are hardly inconsequential. There are 3,069 county governments in the U.S., which have 3.6 million employees and spend over half a trillion dollars annually. But many Americans have no idea what counties do or how they operate. Why? Bill Chiat is director of the California’s CSAC Institute for Excellence in County Government, which provides ongoing professional development classes to county managers and other high level staff who work in California’s 58 counties. Here’s what he told us. “I’ve often thought about this. We have an overall problem that people aren’t engaged with their local government. But there’s a popular understanding of what a city does and not as much understanding of what a county does. “Most people aren’t even aware that counties provide services. In California, the services that counties provide are the invisible services that many voters don’t know or care about – human services, criminal justice. They don’t realize that the District Attorney is a county service or that food stamps are coming through the county. But that’s the challenge. A lot of what counties provide are not popular things. “Even if you think about movies that involve the public sector, there’s always city hall. When was the last time you saw a county administration building in a movie? People say, ‘I’m going to fight city hall.’ Nobody says, ‘I’m going to take this fight to the county board chambers. “One of the issues is that counties vary so much. What a city does is pretty universal across the United States and across the world. But what a county does varies so much from state to state. It’s hard to say what counties do and have it ring true across the country.”

“There are not enough jails, not enough police, not enough courts to enforce a law not supported by the people.” — Hubert H. Humphrey