Getting It Right (Sized) in City Hall

Memphis Mayor A C Wharton has an ambitious agenda that he laid out during his campaign, but the goal he set recently surpasses all of them for its audaciousness: To make Memphis one of the country’s best-run cities.

That is of course why he supports consolidation to correct the broken business models of both Memphis and Shelby County Governments, two governments which he has seen up and close and personal as the mayor for both.  In addition, he is launching a “Strategic Business Assessment” process whose ambitious goal is to retool and reengineer city government from top to bottom.

It couldn’t come at a better time.  This year’s budget hearings were challenging, but they are kid’s stuff compared to what awaits city government next year if it does nothing to shake things up.  Hopefully, the Tennessee Supreme Court will soon rule in favor of the Memphis City Council on whether city government is required to continue the funding for Memphis City Schools that was widely considered as discretionary for decades by everyone in city and county governments.

If the court says city government will be required to fund city schools, the hurdle for City of Memphis is substantially higher, but even if the court rules in favor of logic and fairness and says city government is not legally required to fund schools, City of Memphis will face tough sledding ahead.

Perfect Storm

With property taxes as the largest source of city revenues, any negative shift can be devastating, and right now, there a lot more than one.

There are high commercial vacancy rates, the epidemic of foreclosures has left 60,000 vacant houses (doubling in eight years), median household income has been flat since 1990; poverty is climbing, especially among children; an average of three middle class families and five college-educated 25-34 year-olds leave Memphis every day; and about $25 million in city taxes is waived in tax freezes to business.

To top it off, the Ponzi scheme that is city annexation policy is collapsing as the expected riches from new taxpayers are unable to backfill the increased costs of an urban core that is less dense, making costs there more expensive.

The convergence of these trends was already under way but the recession super-charged them.  Developing the city budget in the midst of the current economy is like changing a tire on a car going 70 miles per hour (or at least finding a way to change tires without spending $1 million a year on it as it did in one of the questionable contracts Mayor Wharton inherited from the Herenton Administration).

Principled Plans

As the work of Mayor Wharton’s BRAC-inspired task force begins its work, there are several principles that should guide it:

There are no sacred cows.  Every part of city government should be under the microscope regardless of political considerations and political support.

* City government is not a jobs program.  Ultimate loyalty is to taxpayers who pay the bills.  City Council members who act as if their responsibility is to keep any city jobs from being cut have misplaced priorities.

* City government doesn’t have to do it all.  It should focus on its core business and consider new ways to deliver it better and cheaper.  This means that managed competition, right-sizing and outsourcing have to be on the table as options for the future.

* Strategic planning must move from an afterthought to a necessity.  Planning in city government is haphazard, and better planning must be institutionalized and mandatory so there is a game plan for administrators and Council members as they set priorities for city funding.

* Data and measurements are absolutely critical to make judgments about what’s working and what’s not.  The Wharton Administration’s plan to establish a set of Citistat-like data needs to be at the top of the to-do list.

Making the Right Things the Right Things

While we don’t blindly subscribe to the principle that government needs to act more like business, one thing is inarguable: In the marketplace, consumers are king, creating pressure to improve services and lower costs.  It’s a dynamic missing from the public sector but Mayor Wharton said a top aim for the task force is to find ways to increase productivity and improve customer service.

The heart of the problem is that government rewards spending, not results, and more prestige and higher pay largely come with a growing empire.  To compound the problem, budget systems track spending, not results.  Without a fully loaded cost of the service, there’s no way to make a realistic comparison of internal costs to outside options.  Of course, the nature of the beast – a monopoly – does little to restrain costs, because old methods, redtape and technology abound.

It seems to us that progress starts with technology.  Everything that can be done at a counter in City Hall should be available online.  Every service and function in city government should look for ways that technology can be imbedded to cut costs.  City government should adopt a self-service attitude, looking for ways to allow citizens to conduct their transactions when they want to, not just when city offices are open.  The opportunity to consolidate a variety of citizen services and support them with web-based self-help tools and self-reporting of problems is dramatic, and it’s encouraging that Kerry Hayes in the mayor’s office has made this a passion of his.

It is no secret that the City of Memphis website is a mess (of course, it looks state-of-the-art compared to the dismal Shelby County website), presenting citizens with a confusing and bureaucratic maze that in its digital form replicates the one found in the real world.

Targets

The five broad areas for city management analysis are:

* Financial Management: Rigorous is the watchword from contingency planning so that City Council has exhaustive information in front of it when it makes its decisions on budgets and the impact of those decisions.

* Human Resources: Professional training for workers, transparent personnel systems and programs to identify and unleash agents of change inside city government

* Information Technology: Information management provides for involvement of departments and offers opportunities to eliminate turf wars.

* Capital Management: Sophisticated capital planning processes need serious five to seven-year plans, backed with data to inform the public.

* Managing for Results: Vision and core values that are communicated and inculcated throughout the entire culture of city government.  It’s also about getting citizen input and involvement.  It’s about taking pride in innovation and improvement.

In the end, how city government does things matter as much as what it does.  And that is exactly why the task force created by Mayor Wharton is the right idea at the right time for City of Memphis.  Only the future of city government hangs in the balance.

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