Every decision begins with a BASELINE that exists before the decision
is made. This is referred to as the BDB (Before Decision Baseline).
BEFORE DECISION BASELINE (BDB)
The BDB Index is set at the numerical standard of 3.0 at the time the
decision is made.
The equation explaining the calculation of the BDB is as follows:
BDB = CMA + CP + CCSL = 1.0 + 1.0 + 1.0 = 3.0
Where,
CMA represents the Current Money Available within the City of Greater
Sudbury at the time of the decision;
CP represents the Current Population of the community at the time of
the decision;
CCSL represents the Current Constituent Satisfaction Level at the time
of the decision.
At the time of the decision, each of the CMA, CP, and CCSL are given a
numerical value of 1.0.
AFTER DECISION BASELINE (ADB)
Councillors must understand that each and every decision they make will
change the BEFORE DECISION BASELINE.
It doesn't matter how hard you try, when you make a decision on City
Council, you are going to change one or more of the baseline ingredients.
You are either going to increase or reduce the total money available
within the community, the total population or the satisfaction level of
your constituents.
Keep in mind that 'any' change will either increase or decrease the total
value. For example, if you purchase a $1,000 item from a
manufacturer that is located in Toronto, you have reduced the Total amount
of money available in the City of Greater Sudbury. The item you purchase
must then increase the population or the constituent satisfaction level by
an amount equal to or greater than $1,000 or your decision will result in a
lower AFTER DECISION BASELINE and your decision will have had a negative
effect on the City of Greater Sudbury.
THE BENEFIT YOU RECEIVE MUST BE WORTH MORE THAN THE MONEY YOU SPENT
TO GET THAT BENEFIT...OTHERWISE, YOU SHOULD NOT MAKE THE PURCHASE.
To illustrate:
ADB = TMA + TP + TCSL
Where,
TMA represents the Total Money Available within the City of Greater
Sudbury after the decision has been made;
TP represents the Total Population of the community after the decision
has been made;
TCSL represents the Total Constituent Satisfaction Level as a result of
the decision.
RETURN ON INVESTMENT
The BASELINE PHILOSOPHY allows you to evaluate each decision made by
City Council by using the RETURN ON INVESTMENT (ROI) principle.
ROI = ADB - BDB
If ADB - BDB is greater than 0, the decision will have resulted in a
positive ROI for the community.
If ADB-BDB is less than 0, the decision will have resulted in a
negative ROI for the community.
Therefore, City Councillors must always keep in mind that when it comes
time to make any decision they must ensure that there will be an
overall "positive outcome", or a positive RETURN ON
INVESTMENT. If all of their decisions have a positive RETURN ON
INVESTMENT, we will be moving forward as a community and fulfilling our
long-term goals.
PREDICTING THE IMPACT OF YOUR DECISION
The secret to becoming a successful City Councillor rests in your
ability to "predict" the outcome of your decision.
Take for example the decision to spend $2 million to purchase new
public transit buses.
Council will be removing $2 million from the total amount of money
available within the City of Greater Sudbury.
That decision will definitely result in an increase in the Total Constituent
Satisfaction Level. Nevertheless, this increase in TCSL only affects the 4% of the
population that uses public transit. Councillors must then decide if the
increase in Constituent Satisfaction Level will be equivalent to the
decrease of $2 million in the total amount of money available in the
community. It will be difficult to quantify the increase in satisfaction
level of adding 3 or 4 new buses to the fleet, but it must be done in
order to determine if the ROI is going to be positive.
Another option would be to spend up to $2 million refurbishing existing
buses, rebuilding motors, installing new seats, painting, etc. If the $2
million could be paid to individuals and companies who operate within the City
of Greater Sudbury, then there will be no reduction of the Total Money
Available within the City of Greater Sudbury since it will stay here.
There will definitely be an increase in the Total Constituent Satisfaction
Level of the people using the public transit because of the upgrades to
the vehicles. There may also be an increase in Total Population if the
companies receiving the contract to refurbish the buses are required to
hire new skilled employees. Even if one assumes that there will be more
breakdowns of the old refurbished buses, at least the money paid to these
service providers will remain within the City of Greater Sudbury.
As you can see, the second option clearly results in a positive ROI.
The first option, however, may or may not result in a positive ROI
depending on the value one places on the increase in Constituent
Satisfaction Level from having 3 or 4 new buses to the fleet.
OBTAINING THE MAXIMUM RETURN ON INVESTMENT
As a City Councillor, the goal must always be on obtaining the maximum
possible RETURN ON INVESTMENT with each and every decision.
Any decision which results in an increase in Total Money Available
within the community would be seen as a major positive move.
For example, City Council recently decided to use $1.5 million of extra
grant money to reduce the tax rate it had already announced. This was NEW
MONEY that was given as a gift to the community from a higher level of
government.
However, City Council could have used the $1.5 million to generate an
additional $3.0 million of grant money from the provincial and federal
governments by putting the money towards road construction. This would
have amounted to an overall increase of $3.0 million for the community.
Reducing taxes had the effect of allowing ratepayers to keep the money
themselves (about $18 each) but would not have increased the total amount
of money in the community. The $18 that was returned to each ratepayer
could have been kept by the City and turned into $4.5 million of new road
construction (the equivalent of $54 per taxpayer). An opportunity for
a ROI of 200% doesn't come along very often, but City Council
decided that it would lower the taxes by 1% instead. This resulted in
absolutely no gain in the Total Money Available in the community. The resulting
increase in Constituent Satisfaction Level was not very much since most
constituents are upset with the amount of taxes they pay in the first
place. By keeping the taxes, and giving the constituents three times the
value in services, the Constituent Satisfaction Level would likely have
gone higher than it did by reducing taxes by 1%.
The above are examples of POOR DECISIONS based on the alternative
options available to City Council.
APPLY THE BASELINE PHILOSOPHY TO EVERY DECISION
The Baseline Philosophy should be applied to every decision made by
City Councillors. Even if the decision seems relatively minor, by applying
the Baseline Philosophy you will always be moving forward in a positive
direction.
Remember, you can eat an elephant if you eat it one bite at a time.
