The “Project Capacity Zone” Concept

The “project capacity zone” concept offers a way of framing potential local government achievement. It also explains what makes some municipalities strive for and achieve excellence while others that appear to be similar fail to achieve the same results.

The difference between success and failure is at once more complicated and more elusive than a simplistic view of "great governments." Tossing about such words as great, excellence, success, and achieve is in itself an oversimplification, as these vary from locality to locality. One municipality may define excellence as limited growth with a sustained economy, while another may define it as industrial development and growth. The view of excellence has to be broad enough to allow for individual definition.

Local governments have different capacities, which manifest themselves over time in the output and actions of the community. Two types of capacity control the outcomes from which great local governments achieve their goals: political capacity and fiscal capacity. Juggling and improving those capacities has proved to be one of the chief challenges of local government leaders and can in fact determine their success. Effective leadership invariably increases the capacity of local government.

Political Capacity

Political capacity, as used here, means the degree to which the elected leaders can take action even without full community support. Governments with greater political capacity can succeed in implementing projects with less broad-based support or more opposition than governments with less political capacity.

The degree of tolerable opposition varies greatly from community to community. It depends, for example, on the expectation of involvement on the part of the citizens and the experience level of the elected leaders.

The implication is that there is a spectrum or range of political capacity. Picking a site for a new landfill, for example, or implementing zoning in a previously unzoned area typically stirs up a significant amount of opposition. Comparing these challenges to a more mundane task, such as siting a recreation facility, shows the substantial variation in political capacity that is required for different governmental tasks.

Fiscal Capacity

At its most basic, fiscal capacity is a measure of what the local government can afford. A government with limited reserves and a high debt ratio in a utility fund lacks the fiscal capacity for a substantial water plant or infrastructure upgrade. If the municipality is struggling to make the budget balance, it is unlikely that it has the capacity to take on general fund debt for a significant project or to invest in needed capital.

Unlike political capacity, fiscal capacity is easily measured. A review of the comprehensive annual financial report, reserve balances, tax rate, and tax base can provide a quick overview of the likelihood that a municipality has the capacity to tackle such a significant project as a utility expansion, neighborhood renewal, or the development of a new industrial park.

Fiscal capacity is relative, of course, depending not only on the capacity present in each community, but on the capacity required for each project. The substantial difference between being able to replace 10 police vehicles a year versus constructing a $15 million recreation facility highlights the point.

Putting the Concept to Work

Think of the last time a project or initiative failed. Was the demise of the project “in the cards” due to unexpected community opposition or because the costs simply exceeded the funds available? Regardless, the capacity concept can help explain what happened and provide lessons for the future. Here are some straightforward first steps:

Know the capacity of the community. In order to move projects to completion you have to work within the capacity of the community and its leaders. The only way to know that capacity is to seek input through thoughtful communication with the elected body and through community feedback. Convening elected officials as a group at a retreat or work session and openly discussing individual and shared goals and objectives is the first step in knowing where projects will land in the locality’s capacity zone.

Start with problems, not solutions. Inviting residents to talk about a problem and what they think can be done about it is considerably different from proposing a solution and inviting them to react to it. Seeking solutions from the community is more likely to result in solutions that are within the locality’s capacity than solutions developed in isolation. You are more likely to divide a community with a top-down solution than with a bottom-up one.

Expand the timeline. Complex issues have complex solutions. What can’t be done in a few months may be possible in a few years. Taking time to move a project into the “capacity zone” through outreach, engagement, and communication costs little, but it may be the difference between something that can be accomplished and something that can’t.

Break complex projects into phases. Keep the concept, but pay as you go. Expensive projects can cause some municipalities not to “dream big,” but even big projects can be undertaken one phase at a time. A $100 million dollar industrial park is easier to pay for as five $20 million dollar projects over a decade (land, road, grading, rail service, utilities). Just because it can’t all be done at once doesn’t mean it can’t be imagined all at once.

Learn from failures. Recreate and rethink to make things work. When a project, program, or initiative fails to get off the ground, follow up with those involved. Try to understand how the project was initially connected to the goals and vision of the elected body, how it was communicated to the community, how the community was involved, and what factors ultimately led to its demise.

Many projects can be salvaged by listening to this kind of input. Sometimes a “failure review” reveals a brilliant project that was proposed without any consideration of the political capacity of the locality, which is a learning experience in itself.

Identifying Projects in the “Zone"

Understanding political capacity and fiscal capacity can reveal whether and when a certain project is “in the zone” and suggest ways to either extend capacity or change the requirements of the project itself. A simple set of guidelines helps ensure that projects are assessed realistically:

• Projects are connected to a vision and strategic concept supported by the elected leaders.
• The amount of community outreach essential to success is part of the initial planning process.
• The capacity required is part of the selection process for vendors and is considered in the development of the timeline.
• Projects are not brought forward until the capacity building steps are complete.