Though the ongoing budget negotiations are about the general fund as a whole, if you listen to what the majority of city council is actually fighting about, much of the time and energy spent concerns a constellation of social services. Many are provided by a city entity, but we also spend a significant sum on contracts with local nonprofits.
The reflex here is that nonprofits figure out ways to do good for the community and local government will pay. Homelessness response, workforce pipelines, early childhood programs, arts and culture, and on and on. Watch it work in real time on the Express-News opinion page last weekend: a crisis nursery, built by a coalition of local nonprofits, ran roughly eight months as a pilot on about half a million dollars the coalition raised itself, and succeeded. The natural conclusion is that it deserves public funding. And maybe it does! County commissioners are looking into a major award. The city, mid-deficit, will likely be asked next. This is how these permanent funding arrangements grow as we accumulate contracts with nonprofits.
As we consider how we’re going to manage the city finances, there are two questions. How much do we spend this way? What do we get for it?
You would think that the first is an easy question. But you would be wrong: no consolidated total for these nonprofit contracts exists anywhere in the city’s published books. We see only glimpses: Tens of millions in the Ready to Work contracts. Some $23 million in federal pass-through to housing and neighborhood nonprofits. If you add in the obvious nonprofit spending from the city’s open checkbook portal it yields over $100 million paid (including capital expenditures) to some 150 nonprofits since the beginning of last year. Roughly $6.5 million for the Botanical Garden, $5.6 million for Meals on Wheels, $611,000 for the Esperanza Peace & Justice Center, and so on. Add what you can find—conservatively well past a hundred million—and still no total, because the total is not public. San Antonio does not publish what it spends buying services from nonprofits.
And what exactly do we get for this undetermined sum? Austin has tried to answer that—for Austin, at least. In July, Austin’s city auditor pulled a sample of 25 nonprofit contracts for family and social services, looking through about $30 million of the roughly $100 million Austin spends each year with 95 nonprofits, and found the city was paying for services that were not fully delivered. In fact, 19 of the 25 contracts missed at least one performance target and, of the output and outcome measures reviewed, 44 percent went unmet. More than half of those misses were deeply below what the contract required. And of course Austin paid anyway.
Austin’s own leadership owned it as a failure of the city’s management, not the providers’. The city developed those metrics during contract negotiations and… Just never bothered to ensure it was getting what it paid for. Until now. It goes without saying: a performance target that costs nothing to miss is useless. Here in San Antonio we haven’t even bothered to check.
There is one notable exception, and we have written about it at length: Ready to Work. The entire debate was shaped by widely available public data. Sure, some argued on principle rather than that data, but nearly every public voice was able to consult the dashboard and make a determination. We knew how much was spent, why, and what we were supposed to get out of it. With most of these other programs, we don’t have anything close to that. Sometimes we don’t even have granular data, just an aggregate which must be fished out of an obscure city website. We don’t need a dashboard for every dollar, but I think we can all agree that you need to have some transparency.
Now look at the direction the San Antonio budget debate has taken. On one side, reluctance about raising the property tax rate and making life more expensive for residents. On the other, and noticeably louder among the council’s majority, alarm that funding for programs could be impacted. But is there any serious curiosity about whether the programs actually meet their goals? Or whether the goals are fair? If city council intended to maintain accountability, something we would argue is directly within their job description, this sort of thing would be step one. Yet, even now, there has been no serious push for it. The ongoing reaction of this council has been to fight over which unexamined commitments to protect.
So do what Austin did and figure out if we’re getting what we pay for. Direct the City Auditor to run reviews of the contracts for the delegate agencies that carry our human services, the economic development organizations, the workforce vendors, the incentive agreements, etc. We need a real record before the next budget is built (remember, there’s a budget deficit next year too).
A balanced budget is required by law, so City Hall will deliver that in some form. But what use is a legal requirement to balance the books if determining which dollars go where is a nearly impossible task? A balanced budget is useless if even city council doesn’t really know whether we’re getting what we pay for.
So one of two things is true. Either City Hall knows what its dollars buy and which programs deliver, and the information made public is done in such a way so we cannot check… Or it does not know and is choosing millions in cuts blind.
It’s hard to say which explanation is worse. Nothing in the record so far suggests it’s the first.
Either way, the best first step is to check. An audit of the kind Austin just completed is a small ask against spending of this magnitude and it should be the bare minimum for asking San Antonio to accept a rate increase. More than that, it’s just good governance. If we’re going to cut what fails and keep what works, we need to find out which is which and make it public.