Sources of "Hidden" Costs to Municipalities

In developing budgets and managing municipal activities, urban leaders often want to look into how costs of building and running a city can mount up day by day. Some rising costs may be beyond the capacity of any city to control, e.g., the poor health of the national economy, falling currency exchange rates, increasing inflation.

However, other costs arise directly from daily dynamics of cities, but may be hidden from view in daily decision-making.

These include:

• Costs of providing services to different patterns of development... some are much more expensive than others for a municipality to support over time.
  
  
• Costs arising from environmental impacts of urban life, such as more frequent visits to clinics, lost employment due to pollution, or lost investment because of unattractive aspects of daily living.
  
  
• Costs of carrying on municipal programs that are having little effect, or that may actually be worsening urban living conditions.

Based on wide and long municipal experience, hidden costs can be brought to the surface and considered in making future decisions. Solutions to curb these kinds of rising costs do exist. Priority topics addressed here are:

• How to reduce "sprawl" or development of new "slums" in day-to-day municipal decisions. A example is to adopt municipal policies which take into account added costs associated with each new development proposed, and to approve those which achieve lowest financial, social and environmental costs.
  
  
• How to employ Environmental Management Systems to make savings in municipal operations and also reduce their environmental impact. An example is to manage fleets of municipal vehicles better so they save gasoline and extend vehicle life.
  
  
• How to measure whether municipal programs are effective, and whether they deserve continued funding. An example is to look at different "indicators" of how different actions affect tangible results in city living, e.g., whether increased numbers of city police reduce rates of crime.

You will not find on today's World Wide Web a convenient guide to looking for different hidden costs and addressing them in daily decision-making.

We have developed three guides for you on this topic, according to the topics set out above. Each consists of six parts:

• A review of why it is a good idea to consider and to address the hidden costs of municipal decisions and operations.
  
  
• A priority-setting checklist to help sort out steps in solving the issue in question.
  
  
• Presentation materials, including a "storyline" for a presentation to your colleagues, sample "slides" for use in speaking to them, and notes on how to develop the presentation further.
  
  
• "Top Websites"... the most useful resources we have found to date on how to determine hidden costs and then develop solutions to reduce them.
  
  
• "Top Solutions"... specific actions fellow urban leaders are taking to reduce hidden costs, linked to other parts of this Website and to the World Wide Web for additional information.
  
  
• "Top Contacts"... who is working in the field of determining and tackling hidden costs, and the kind of work they are doing.

A great advantage of using the Internet is that information consulted by many people can be updated and corrected quickly and cheaply. Ideas, references and contacts offered here are a starting point for engaging urban leaders in developing a tool that is even more useful to everyone, and more firmly rooted in daily experience.