“Finally, a no-nonsense, how-to book that takes the fear out of statistics and analysis. Tools for Decision Making is an ideal book to use in masters-level research methods classes where the emphasis is on equipping students with basic tools of analysis that they can use in their careers.” — David Schultz, Distinguished University Professor of Political Science and Legal Studies at Hamline University, USA “By incorporating Excel instructions into the collection of analytic techniques presented in Tools for Decision Making, the authors have made this book a must-have. Every local government researcher/analyst in the world has access to Excel, so this feature alone makes this text invaluable. The online Excel templates that accompany the third edition are a major selling point; their availability for student use and for subsequent use on the job make this book a necessity on one’s bookshelf.” — Hunter Bacot, Graduate Program Director and Professor of Political Science at the University of North Carolina at Greensboro, USA “Tools for Decision Making is a gold mine of ideas for improving services. It makes difficult-sounding management techniques very understandable. I caution owners of the book to be leery of those who seek to borrow it; else it may go the same way as the trusty hammer and saw.” — W. Bartley Hildreth, Professor at the Center for State and Local Finance / Department of Public Management and Policy at Georgia State University, USA “The analytical tools described by Ammons and Roenigk demystify the management of complex organizations. This book can serve as your tool box of ideas and models for continuous improvement.” — Russell Blackburn, City Manager at the City of Port St. Lucie, Florida, USA “Tools for Decision Making is a very user-friendly book that can be used in policy analysis or financial management courses in upper-division or graduate instruction. Ammons and Roenigk use excellent examples that place tools in realistic and appropriate context for typical public administration students.” — Howard Frank, Professor in the Department of Public Policy & Administration at Florida International University, USA TOOLS FOR DECISION MAKING This book guides readers to the mastery of a wide array of practical ana- lytic techniques useful to local governments. Written in an easy-t o- read style with an emphasis on providing practical assistance to students, local government practitioners, and others interested in local government per- formance, this updated third edition features analytic methods selected for their relevance to everyday problems encountered in city and county governments. The authors outline a variety of practical techniques including the simplest that the fields of management, public administration, policy analysis, and industrial engineering have to offer. Each analytic technique is introduced in the context of a fictitious case presented over a few pages at the begin- ning of that technique’s chapter. Contents include demand analysis, work distribution analysis, process flow- charting, inflation adjustments, annual- izing capital costs, staffing analysis, identifying full costs of a program or service, present value analysis, life- cycle costing, lease/ buy analysis, cost- effectiveness analysis, benchmarking analysis, and more. This updated third edition features a dramatic expansion of Excel- based applications, plus templates and exercises accompanying many of the chapters and available online. New chapters prepare readers to: • use statistical tests to identify significant differences in performance averages; • construct Pareto charts; • develop cause- and- effect diagrams; • prepare control charts; • detect possible discrimination in hiring and appointment practices; and • present analytic evidence more effectively. This book is an essential resource for students and instructors of public administration courses on analysis, methods, evaluation, productivity improvement, and service delivery. Online resources for this book, including Excel templates, are available at https:// toolsfordecisionmaking.sog.unc.edu David N. Ammons is a Professor of Public Administration and Government at the University of North Carolina at Chapel Hill, USA. He has written sev- eral books and his articles have appeared in Public Administration Review, Journal of Public Administration Research and Theory, Public Performance and Management Review, and other public affairs journals. He has served on the National Performance Management Advisory Commission and the North Carolina Governor’s Advisory Committee on Performance Management. He was elected as a Fellow of the National Academy of Public Administration in 2006. Dale J. Roenigk is the Director of the North Carolina Benchmarking Project and a Faculty Member at the School of Government at the University of North Carolina at Chapel Hill, USA. He is the author of an annual benchmarking report on municipal services published by the School of Government. He also helped develop the County and Municipal Fiscal Analysis tool, a web- based dashboard designed to help North Carolina local governments ana- lyze their fiscal condition. His research interests include benchmarking, performance measurement and management, and evaluation. TOOLS FOR DECISION MAKING A Practical Guide for Local Government Third Edition David N. Ammons and Dale J. Roenigk Third edition published 2022 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2022 David N. Ammons and Dale J. Roenigk The right of David N. Ammons and Dale J. Roenigk to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. First edition published by CQ Press 2002 Second edition published by CQ Press 2009 British Library Cataloguing- in- Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging- in- Publication Data Names: Ammons, David N., author. | Roenigk, Dale J., author. Title: Tools for decision making: a practical guide for local government / David N. Ammons and Dale J. Roenigk. Description: Third edition. | Abingdon, Oxon; New York, NY: Routledge, 2022. | Includes bibliographical references and index. Identifiers: LCCN 2021005408 (print) | LCCN 2021005409 (ebook) | ISBN 9780367654399 (hardback) | ISBN 9780367654320 (paperback) | ISBN 9781003129431 (ebook) Subjects: LCSH: Local government–Decision making. | Public administration–Decision making. Classification: LCC JS78 .A49 2022 (print) | LCC JS78 (ebook) | DDC 352.3/7214–dc23 LC record available at https://lccn.loc.gov/2021005408 LC ebook record available at https://lccn.loc.gov/2021005409 ISBN: 978- 0- 367- 65439- 9 (hbk) ISBN: 978- 0- 367- 65432- 0 (pbk) ISBN: 978- 1- 003- 12943- 1 (ebk) Typeset in Joanna by Newgen Publishing UK CONTENTS List of boxes xi List of figures xiv List of tables xviii List of worksheets xxii Preface xxiii Part I Introduction 1 1 The role of analysis in local government 3 Part II The basics 25 2 Central tendency and dispersion 27 3 Performance measurement and monitoring 38 4 Smoothing data trends by using moving averages 60 5 Sampling for analysis 69 6 Basic statistical testing: Correlation and chi- square 80 7 Sensitivity analysis 99 viii CONTeNTS 8 Break- even analysis 107 9 Detecting meaningful differences in average performance 112 Part III Analyzing a unit’s capacity to meet the demand for service 125 10 Demand analysis 127 11 Work distribution analysis 139 12 Using performance standards 149 13 Staffing analysis 163 14 Staffing factor calculation: Projections for uninterruptible services 180 Part IV What does it cost? 187 15 Adjusting for inflation when comparing revenues or expenditures 189 16 Basic investment calculations: Figuring interest rates and yields 201 17 The time value of money: Opportunity costs, discounting, compounding, future value, and present value 214 18 Simple options for annualizing costs of capital items: Usage- rate and straight- line depreciation 224 19 Identifying full costs of a program 236 20 Calculating go- away costs for privatization decisions 257 21 Life- cycle costing 263 CONTeNTS ix 22 Lease or buy? 272 23 Cost- effectiveness analysis: A truncated version of cost- benefit analysis 283 Part V Process improvement 297 24 Pareto charts 299 25 Cause- and- effect diagrams 308 26 Process flow charts 319 27 Control charts 333 Part VI Other analytic opportunities and techniques 357 28 Citizen surveys and customer surveys 359 29 Analyzing survey data: Revealing graphics and simple statistics 369 30 Financial condition analysis 384 31 Random chance or bias? A practical use of binomial probability distribution 400 32 Forecasting 416 33 Analysis of operations via benchmarking 434 Part VII Presenting analytic evidence 453 34 Presenting analytic evidence: Tables or graphs? 455 Part VIII Wrap up 471 35 The place of analysis in a political environment 473