Government should only pay for successful programs, right??

Recently Salt Lake County has been in the news nationwide for championing Pay for Success models as a means to provide services, but only pay when the service programs actually work to achieve designated outcomes. Here's more info on this Pay for Success model:

Pay for Success is performance-based contracting between government and social service providers, where government only pays providers if target outcomes are achieved as opposed to providing cost reimbursement payments.  Under this model, the government commits funds to pay for a specific outcome.  Independent investors provide the financial capital to cover the operating costs of achieving the outcome.  In return for accepting the risks of funding the project, the investors may expect a return on their investment.  Payment of the funds by the government is contingent on the validated achievement of results.  The burden of investment risk shifts from government to the investors.

The Pay for Success model solves more than just social problems.  It helps governments operate effectively.  Historically, governments are inefficient in allocating and investing their resources.  Supporters of a budgetary line item will fight to keep the funding even if it is inefficient.  Political repercussions may keep this line item on the books indefinitely.  This practice limits local government’s ability to solve problems.  Funds that could be used for innovative problem-solving are tied up in waste.  Salt Lake County reduces financial and political risks to the county by using a pay for success model.  This model allows the county to solve problems by focusing on results and outcomes.

Salt Lake County began testing the use of these funds (also known as Social Impact Bonds) in 2013 when we solicited $7 million in private funding from Goldman Sachs and J.B. Pritzker to give to The United Way (the administrator). This program allows 600 at-risk children to benefit from early intervention designed to keep them from staying in special education though out their education.  Special education is extremely expensive and it is estimated for every $1 of investment the taxpayer saves $14 when these students participate at grade-level. By third grade these students will be tested again to determine if they are still at-risk or are participating at grade level. For every student that stays out of special education the private investor will receive their money back, plus 5% interest. If a child doesn't make it out of special education then the taxpayer doesn't lose anything. We see a direct correlation between students in special ed and those who graduate from high school. There is then a correlation between students who don't graduate and those who end up in jail - one of the county's largest expenses.

A couple months ago the County Council voted again to try the Pay for Success model on a 6-2 vote. They allocated $150,000 to come from the Office of Regional and Economic Development to negotiate contracts and to seek out ways to use private investment, comparable to the preschool program. Focuses will be

on recidivism, homelessness, and other social programs. This is an opportunity for government to partner with the private sector to make sure our county programs are even better.

Board member needed for Open Space Advisory Trust Fund

We are looking for a board member for the Open Space Advisory Trust Fund committee from District 3. 

All of the people on the board are passionate about open space or urban farming.

The board meets about 4-6 times a year, usually during regular business hours.

The board’s mission is described in SLCO ordinance, 2.93:

The committee shall advise the county council and the county mayor on the preservation, acquisition and development of real property which may be used or which is currently being used for open space. The committee shall develop criteria for assigning priorities to real property acquisition. The committee shall review and evaluate acquisitions of open space property by Salt Lake County, and shall issue written recommendations to the county council and the county mayor with respect to proposed acquisitions or proposed expenditures of trust funds which promote open space within the county.

Representation is described as follows:

To the extent possible, citizen members shall be chosen from a broad array of professional and citizen backgrounds and with emphasis on those knowledgeable in land conservation, natural resources, recreation and wildlife management, landscape architecture or planning, real estate, finance, public relations, business and fund raising. The mayor shall provide the committee with appropriate staff support.

If you are interested in serving on this committee, please contact my office at 385-468-7456 or anewton@slco.org.

Help at-risk youth this Christmas!

If you’ve stopped by the Salt Lake County offices lately, you would have notices the beautiful Christmas Trees on display in the foyer of the north building. Mayor Ben McAdams announced the annual Youth Services Angel Giving Tree campaign in partnership with Shelterkids, a local non-profit providing items to abused, neglected and at-risk youth served by Salt Lake County Youth Services.

The Angel Giving Trees display handcrafted ornaments donated by volunteers from the community and will be available inside the Salt Lake County Government Center North building atrium. Salt Lake County employees and the community are encouraged to select an ornament that represents a special and needed gift for a youth. There’s still time to make a difference in the life of one of our own here in Salt Lake County. Donations are gladly accepted at the Salt Lake County Mayor’s office by December 17th and will be distributed to youth in need for the holidays.

Salt Lake County passes budget with no tax increase

Every year Salt Lake County’s budget is written and presented by the mayor in a public meeting. This year the state auditor required all taxing entities (state auditor alert 2014-3) to put all pass-through monies on their books. For example, Salt Lake County collects sales taxes that go directly to UTA, and now those taxes will be a part of the official budget. This means that $210,092,453 will be added to this year’s budget, making the total proposal $1.1 billion.

After the mayor made his presentation on October 28th, the county council considered changes during budget workshops over the past month. This year as the council scrutinized the budget proposal, I found some items worthy of note:

-This budget contains no tax increase and is fiscally conservative.

-The Dashboard Project: This will be a real-time platform where citizens can see data and progress that various departments within the county are making. We will be able to see real evidence of what works and what doesn’t. This project focuses on positive outcomes and making the best use of tax dollars.

-Pay for Success: This is performance-based contracting between government and social service providers, where government only pays providers if target outcomes are achieved.

-This budget provides $40 million in deferred maintenance.

-County employees will receive a 2.75% average merit increase.

-Nearly $20 million of new funding requests were cut.

You can view the budget that the mayor proposed.

Here is the article from the Salt Lake Tribune on the budget.

Salt Lake County one of four winners in ‘New Ideas Challenge’

Salt Lake County Mayor Ben McAdams was honored at an awards ceremony today for winning the NewDEAL (Developing Exceptional American Leaders) “New Ideas Challenge 2014” for the category “best public-private partnership.”  The awards were presented by Delaware Governor Jack Markell, honorary chair of the NewDEAL.

Salt Lake County’s entry was the pilot program that expanded voluntary, high-quality preschool to 600 economically disadvantaged children in the Granite School District. The county partnered with United Way of Salt Lake, Voices for Utah Children and Goldman Sachs.

“At a time of national gridlock, I’m proud that Salt Lake County is showing how—in a bipartisan way—we can solve problems, providing families with an opportunity to participate in this ‘game-changing’ effort.  Another important result is that we’re saving taxpayer dollars by partnering with both the private and the nonprofit sectors to fund this innovative initiative,” said Mayor McAdams.

The first ever New Ideas Challenge gives recognition to smart, pro-growth solutions that are being developed and tested by state and local leaders all across the country. All of the idea submissions are viewable at a new website unveiled today – www.newdealleaders.org.

McAdams said Salt Lake County was selected out of sixty submissions by an esteemed panel of judges who are recognized as thought leaders in the policy arena. McAdams is a member of the NewDEAL. More about the county’s pay for success preschool initiative can be found here.

The Funds and Structure of the County Budget

By Office of Township Services

The county organizes its finances using a series of funds, which consist of sums of money set aside for a particular activity, program, or purpose. Salt Lake County has specific funds for most of its functions: for example, one fund is dedicated specifically to the County Library System, while another is dedicated to the Department of Health. There are a number of different types of funds, depending on their structure and purpose.

Governmental funds are those used for most county activities. These funds are dedicated towards services such as flood control, housing services, grant programs, and the aforementioned libraries and health department. One of the most important funds in this category is the Municipal Services Fund, which is used to provide municipal services to the townships of Millcreek, Kearns, Magna, Copperton, Emigration Canyon, and White City, as well as other areas of the unincorporated county. By far the largest governmental fund, however, is the General Fund, which accounts for almost 30% of the county budget. The General Fund is used to pay for everything that isn’t already accounted for in other funds.

The other major types of funds are proprietary funds and fiduciary funds. Proprietary funds are used to maintain programs that don’t operate like public government services. For example, internal service funds are used to provide services to other parts of the county rather than the general public, such as facilities management for county buildings. Enterprise funds are used to run entities that operate like private businesses under the ownership of the county, such as the Wasatch Front Waste and Recycling District. Fiduciary funds are held by the county, but come from (and are used for the benefit of) other entities, such as funds provided by the state that are used to assist in state tax collection.

The revenue sources for each fund vary, depending on their purpose and structure. The General Fund is mainly provided for by property taxes, while the ZAP Fund uses a 0.1% sales tax. Business-type programs such as county golf courses are usually paid for through fees, sales, and revenue that they collect themselves. Sometimes funds can overlap: both the General Fund and the Tourism, Recreation, Cultural and Convention Facilities fund help pay for county recreation facilities.

Not all of the money in a certain fund can be spent in a year. The county requires each fund to keep a minimum percentage of their money out of the budget, so that county programs can be prepared for every eventuality. 10% of the general fund and 5% of most other funds are kept in reserve in case of emergency, economic downturn, or revenue declines. This fiscal responsibility helps the county maintain a AAA bond rating.

This financial structure is integral to ensuring that the county is responsible with its money.

Where does Salt Lake County get funding?

By SLCO Township Services

Last month Mayor Ben McAdams submitted his 2015 budget proposal. As each step of the budgeting process moves forward, this week we’ll be discussing where the county’s income comes from.

The county’s main source of funding is property taxes, levied on land, buildings, and some forms of private property (such as business equipment or construction machinery) owned throughout the valley. The county assessor keeps careful records of these properties and their value in order to determine taxable value for each property owner. In June of each year, the County Council adopts tax rates and the County Treasurer bills and collects property taxes.  These funds are then used for county programs such as the health department, economic development projects, infrastructure creation and maintenance, or the administration of county government.

The county government isn’t the only entity that receives funding from property taxes; school districts, and city governments, also levy taxes on property. The Treasurer is also responsible for collecting taxes for other government entities in Salt Lake County.

Salt Lake County also levies sales taxes, including a 0.1% tax for the Zoos, Arts, and Parks (ZAP) program and a .25% tax that goes into the county’s general fund. This means that for every $10 that is spent within the county, one cent helps to pay for arts, cultural, and recreation programs, while two and a half cents are spent on various county expenses.

Most programs run by the county are not self-sustaining and do rely on tax money to maintain current service levels. Examples include Wheeler Farm, Parks and Recreation, Clark Planetarium, and the Health Department. Many of these programs draw part of their funding from fee revenue, meaning that they don’t have to rely entirely on taxpayers for support.

The 2015 Proposed Budget is structurally balanced and does not feature a tax increase. To help maintain structural balance, the few new requests that were included were funded via re-prioritization.