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Charting a new course

Entrepreneurial government is a concept that is taking hold in cities across North America

On April 7, 2005, John Street, mayor of Philadelphia, announced his city’s intention to build a citywide wireless broadband network. The intent of the venture is to sell the service to residents, with low-income users getting price breaks.

The announcement sparked an intense debate over whether cities have any business in the broadband industry. A year earlier New York City Mayor Michael Bloomberg created a similar stir by hiring Joseph M. Perello (a former sports marketing consultant) as chief marketing officer, a first for a United States municipality. Perello’s first announcement was that he’d secured a deal with Snapple to be the official beverage provider on New York City’s properties, including schools.

The controversy that surrounded both of these announcements is old news to Whistler residents who witnessed the roll out of the Yodel wireless broadband network, commonly known as Wi-Fi (wireless fidelity), in the summer of 2003 and the purchase of 50 per cent of whistler.com last year. In October 2004, Whistler’s municipal council adopted a policy to set parameters for public-private partnerships (PPPs). In fact, Whistler has been on the leading edge of entrepreneurial government since its framework was laid out in the RMOW’s Vision 2002 Document.

By now, entrepreneurial government is a familiar term, and in a town with a higher than average rate of entrepreneurs per capita (6.7 per cent of Whistler residents vs. 4.6 per cent for B.C.), the term has a pleasing ring. However, few people have a firm grasp of exactly what it means.

In their influential book, Reinventing Government, David Osborne and Ted Gaebler coined the term "entrepreneurial government" to describe their vision of how government could adapt and change to become a source of support and service. Simply defined, entrepreneurial government is citizen-centred, results-oriented and market-based, actively promoting innovation and competition. Their model for entrepreneurial government led to the initiation of the National Performance Review by then U.S. Vice President Al Gore in 1994 and the federal government reform objectives adopted by President Bush, in 2001.

Almost 15 years later, Osborne and Gaebler’s vision of government as a catalyst for change is just as relevant. Here in Whistler, the concept has been embraced and the mandate is to move beyond the good idea to achieve its fruition. Most significant is their recommendation that: "government can – and must – compete with for-profit businesses, non-profit agencies, and other units of government."

"An enterprise, whether a business or any other institution, that does not engage in entrepreneurship, will not long survive." — Peter Drucker

As Whistler envisions its future to 2020 and beyond, cold realities must be considered. Financial tools, long promised by the province, may not be forthcoming; four consecutive years of declining tourist visits are having some effect on the tax base; and local homeowners enduring crippling property tax rates cannot be sustained. It may very quickly become necessary to generate revenue from alternate sources, and bets must be placed if there is to be significant payoff.

But governments must balance different priorities than the private sector. Often they are not able to react quickly to market demand and thus are not able to be competitive with the private sector. Responsibility for public finance also carries a necessary amount of risk-aversion, which the private sector does not bear.

Fundamental to this scenario is the question of whether entrepreneurial government and its pursuit of public-private partnerships will upset a delicate economic balance. Political issues could erupt if public private partnerships become revenue makers. Moreover, a cash strapped municipality cannot afford to stand aside and allow private upstarts with next-generation technology or the next big event idea into the market. When starved for income, it may be necessary to milk the revenue generators to protect established franchises.

"These two poles, stasis and dynamism, increasingly define our political, intellectual and cultural landscape." — Virginia Postrel

It is a precarious balance, meeting the expectations of citizens in a way that is economically viable, particularly in the climate of continuous change that is pervasive in our society. For the last nine years, striking that balance has been the task of the RMOW’s chief administrative officer, Jim Godfrey, who has recently been named Executive Director for the 2010 Games – Whistler. Assuming the administrator’s roll, at least in the interim and perhaps long-term, is 25-year RMOW veteran Deputy Administrator Bill Barratt, who largely credits Godfrey with introducing the entrepreneurial government model to Whistler.

"My view is that Whistler is a different animal than any other place, as far as government goes," Barratt says. "I think Jim discovered that coming here from Langley, but it was certainly Jim that brought this whole system, including the innovation fund, directors savings and better governance."

The innovation fund was created to provide investment capital required to explore innovative and creative solutions directed towards making the municipality more efficient and effective. Ideas like these are part and parcel of the governance model.

While Barratt is quick to give credit, he also acknowledges the uniqueness of Whistler’s position. "It was primarily Jim, but at the same time, there was an entrepreneurial culture in place, for example with Meadow Park, to provide better service and it has a much better recovery rate (of operating costs) than (most) facilities of its type, which have a recovery rate of 50-55 per cent. We have a recovery rate of 75 per cent."

While Barratt may be new to the job as top administrator, his understanding of entrepreneurial government is deep and he uses a favorite quote from Winston Churchill to illustrate: "Some see private enterprise as the predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon."

While guiding the vision is Barratt’s domain, the execution rests squarely on the shoulders of John Rae, Manager of Strategic Alliances & Marketing Services. It is Rae’s responsibility to ensure that the public private partnerships balance against the community interest. "Specifically, we have a set of guiding principles that ensure we are entering into public private partnerships that are needed by the community and that are not overtly competitive to businesses that are in the resort or that may be in the resort in the near future."

Rae is also quick to point out the benefits of these partnerships. "Reduced risk married with increased efficiency. I believe we can mitigate costs by virtue of getting involved in a public private partnership, depending on the nature of the project and its objectives, we can access expertise that we wouldn’t necessarily have in house."

While Yodel is a venture with a goal of adding incremental revenue, other ventures have different objectives. As Rae explains: "There are a number of other partnerships that operate day to day, one example is Cross County Connection. Originally, people expressed concern that it might put other rental/retail operations out of business, when, in fact we were working in partnership with a private business to enhance the guest’s experience.

"Another would be our partnership with Sweat Equity Productions to produce the initial Whistler Comedy Festival," Rae continues. "There was a minor investment on our part as well as some investment in administrative resources to help make that event the success that we feel it was."

Rae also explained the rationale behind the deal with whistler.com

"The reason for purchasing 50 per cent of whistler.com was to make sure that we protected an extremely important marketing vehicle on behalf of the community. It was a preemptive strike to ensure that the URL didn’t fall into the wrong hands, that might use it for the wrong purposes."

Whistler’s entrepreneurial drive won't stop any time soon and, typically, plans are ambitious and bold. However, both Rae and Barratt dismiss any fears that public money will be at risk. As Barratt explains, "any partnership we enter into is at arm’s length from the community, so that the taxpayer is not at risk. We are restricted (through the Community Charter) from putting any capital money into a private business."

Rae goes further in explaining the potential return on investment for the partnerships. "Both (Yodel and whistler.com) are scheduled to deliver modest profitability over the next five years, both were entered into on a five year payback horizon. We went in with a forecast of full ROI within five years in whistler.com."

"Excellence in a disruptive age is not excellence amidst placid waters."

— Tom Peters

The ideal of entrepreneurial government is to provide more income to local governments so that they may sustain a positive policy agenda with lower taxes and more services.

Like it or not, the revolution gripping the business world and shaping the expectations of consumers is having the same effect on public institutions because citizens, becoming increasingly demanding, will insist that government remains in step with all other social and commercial organizations. This fundamental belief appears to be imbedded in the culture of Whistler, as Bill Barratt sums up the necessity for government to strive to match as much as possible the competence and efficiency of the commercial sector.

"We have to react as fast, for example with development. We have a responsibility to process rezoning applications, business licenses, etc. quickly because it’s part of the economy. Because the business world is operating faster government has to as well, because you have to keep up with business".

Local government is going to come under increasing pressure to continuously innovate, streamline and improve every aspect of its services. To be effective, municipal leaders will have to understand and confront the economic, social and political complexities this fundamental shift will make in the way we run our businesses and shape public policy.



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