Risk Management: connecting the dots �.

The phrase, �Adding insult to injury� should come to mind whenever we read of another case of police abuse. Every denial of civil rights, every injury, every wrong door busted down, is not only demeaning and hurtful, it costs the City (us taxpayers) money by stealing precious resources needed for public services. Worst of all, those responsible for incurring these expenses are protected from the consequences of their actions; they don�t �reap what they sow� ---we do. But, strangely, nobody seems to be connecting these dots---- not civil libertarians, not taxpayers groups, not good government advocates, not supporters of our libraries.

At a time when the federal government is incurring more and more debt, withholding more and more funding from States for needed services and funding only �security� interests, when the State, in turn, distributes fewer and fewer dollars to municipalities --- in this age of ever shrinking pots of governmental funding ---it is more important than ever to use every dollar available wisely and prudently. What could be more wasteful than spending millions upon millions each year on payouts from lawsuits and claims? Yet, that is exactly what the City of Oakland has been doing, unchallenged*, for years.

Businesses and municipalities address this type of waste by instituting �risk management� programs. Such programs ensure that the entity incurring liability takes financial responsibility for it, providing the incentive to reduce exposure. But unlike the private sector, cities have little incentive to reduce loss because they can compensate for these payouts merely by withholding funds that would otherwise have been available to support programs and services. For that reason, it is those who are being short-changed who must demand reform. Having our tax dollars thrown away in millions of dollars worth of settlements, judgments, and claims year after year, at the expense of vital infrastructure and direct services, is something we cannot afford.

So, rather than focusing our energy on fighting each other for the few crumbs of discretionary funding that are left, we should be asking, �Why should we settle for these few crumbs?� The answer is �We shouldn�t.� We should also be asking, �What is the City doing to protect our financial assets?� The answer is, �Nothing!�

In fact, the risk management strategy that was brought to the City by the community group PUEBLO faces termination, if the staff has its way. And why? Because City departments, unlike the rest of us who are expected to �pay for what we break,� balk at having to assume responsibility for their behaviors. Like children who expect their parents to pay for the window they broke instead of having the money withheld from their allowance, City departments, too, prefer that money to pay lawsuits and judgments that result from their activities be taken from the General Fund, instead of their departmental budgets. And the City Manager supports that choice.

This is unacceptable. We demand that the City Council direct the City Manager to:

• Take immediate and vigorous steps to implement an aggressive Risk Management strategy;
• Implement programs that mandate departmental compliance with best practices to reduce the City�s exposure to law suits; and
• Establish departmental targets for loss reduction, and make loss reduction a part of performance evaluations for top level administrators.

* Except for PUEBLO (People United for a Better Oakland) who authored a Risk Management Incentive Program which the Council adopted in 1998 but which City staff has failed to implement properly. This strategy provided both positive and negative incentives to City departments to promote loss reduction.