Iowa's Generous Employee Benefits, Winning Audits, and the Side Effect of Furloughs

Plus: the misconception about failure and more management news
April 18, 2013

As the economic outlook bounces back to near pre-recession levels, so has municipalities’ willingness to borrow. More than a third of the nation’s cities and counties plan to borrow cash for capital projects this year (the most in at least two years), according to a National League of Cities survey.

It's kind of hard to belittle confidence, but we've got a question: As municipalities borrow cash for building new infrastructure, what are they doing to raise cash to maintain the infrastructure they've already got? Given the huge backlog of maintenance problems, clearly they're not doing enough.

It’s not up to us to decide whether workers’ benefits are too generous, but here’s a candidate.

Under the Affordable Care Act, adults who are 26 years old or younger can be covered under their parents health insurance (a change that some consider to be too generous). But at least one state has a long-standing rule that goes well beyond that.

When chatting recently with Michelle Minnehan, the chief operating officer for Iowa’s Human Resources Enterprise, she mentioned that her state covers unmarried children of state employees at any age, as long as they’re full-time students in an accredited university or college. Apparently, there are some Iowans in their 50s still covered by the older folks at home.

This appears in our free Management e-newsletter. Not already a subscriber? Click here.

According to Minnehan, her division has brought this issue to the legislature repeatedly over the last few years to tighten up the rules and lighten the load, but efforts to change this policy haven't yet succeeded.

Congratulations to Multnomah County in Oregon for winning honors from the Association of Local Government Auditors for an audit that found that the county could save more than $300,000 by better managing its employees’ use of mobile devices.

Congrats, also, to San Diego for winning the same gold prize for its performance audit of the fire department’s emergency medical dispatch process.

There’s lots to be learned from these award-winning audits, and we suggest you take a look at the list of honorees.

When public-sector innovations fail to work out well, it’s easy for critics to simply maintain that the basic idea was at fault. But as economist Robert Merton writes in the Harvard Business Review, it’s often other factors that lead to an idea’s downfall. Here’s an example we found particularly intriguing:

“Ask yourself this: If you had to drive from Boston to New York in a snowstorm, would you feel safer in a car with four-wheel drive or two-wheel drive? Chances are, you’d choose four-wheel drive. But if you were to look at accident statistics, you’d find that the advent of four-wheel drive hasn’t done much to lower the rate of passenger accidents per passenger mile on snowy days. That might lead you to conclude that the innovation hasn’t made driving in the snow any safer.

“Of course, what has happened is not that the innovation has failed to make us safer but that people have changed their driving habits because they feel safer. More people are venturing out in the snow than used to be the case, and they are probably driving less carefully as well. If you and everyone else were to drive to New York at the same speed and in the same numbers as you did before, four-wheel drive would indeed make you a lot safer. But if you and everyone else were to drive a lot faster, you’d face the same amount of risk you’ve always had in a snowstorm. In essence, you’re making a choice (consciously or unconsciously) between lowering your risk and improving your performance.”

"Walt [Disney] believed that the experience was most important. People could always read about ideas or see photographs of new concepts. They would find it more compelling if they went through it themselves. Once people experienced something first-hand, they could go home to their own communities and make changes." -- John Hench, one of Disney's longest and most-trusted designers.

Homestead tax credits are meant to provide some property tax relief, often to older people or those under a set income. They’re generally applied only to a primary residence. While some argue that taxes shouldn’t be used to advance social policy, this is one instance that surely seems to have wide support. That is, of course, if the right people are getting the money.

A new auditor’s report in Maryland points out that many of the individuals getting a portion of the state’s more than $300 million in homestead credits are actually ineligible.

The audit found a number of weaknesses in the way that the Department of Assessments and Taxation and local assessment offices monitor eligibility. One common complaint was insufficient capacity in the state office to oversee locals and deal with compliance concerns.

Technology may not solve all of governments’ woes, but here’s an interesting case where Los Angeles is trying to use magnets, sensors and computers to try to relieve congestion on its notoriously gridlocked roads.

As Governing has reported, the city synchronized more than 4,300 traffic lights in order to promote the smooth flow of traffic. For example, if buses aren’t keeping up with their schedules, the computers will instantly make the green lights last longer in bus-only lanes; and when roads close for parades or events like the Academy Awards, the light patterns encourage cars to take alternate routes.

But will this really relieve the city of its congestion problems? The L.A. Transportation Department has indicated that the average speed of traffic has gone up under the new system and delays at major intersections have gone down. But when traffic moves faster, more people may be inclined to drive, which would make the traffic move slower again.

The side effect of furloughs has become clearer thanks to a study of their impact in California.

It turns out that many state employees used furlough days instead of taking vacation or sick time. The result? According to the audit, the average employee’s leave balance increased by 16 days between 2008 and 2012, and the state now owes upwards of $1 billion extra to employees when they retire.

Some states, including Virginia, are trying to save money by encouraging employees to use their own cell phones. The biggest challenge to making this change, however, is not technological, according to tech consulting firm GCN.

“Even though logic would say users would be better off once they switch over to … start using their own phones for work, many either don’t want to change how things are or are worried about their personal data and work data being on the same device. Because the service for Virginia state employees is entirely voluntary, adoption is currently at about 5 percent of all employees with mobile devices.”

Casinos -- both commercial and Native American -- are significant sources of jobs, wages and tax revenues for the many cities and states that house them. Native American gaming generated about 44 percent of all U.S. casino gaming revenue in 2011, according to Casino City Press, but its growth rate that year was 3.4 percent, compared to 1.7 percent for commercial casinos. Can anyone explain why? And how can cities and states take advantage of that information to pull more revenue out of commercial casinos?

Join the Discussion

After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.

More from Smart Management