Do States Care About Cities?

Plus: Low ethical standards, the Rubber Room, and more
March 1, 2008 AT 3:00 AM
Barrett and Greene
By Katherine Barrett & Richard Greene  |  Columnists
Government management experts. Their website is

If you're working in city or county government, does the state care about you? The other day we posed a question like this one to a large group of Municipal League directors. Remarkably few answered with a "yes." Was that extreme? Please tell us whether you think your state government genuinely moves forward with the interests of its cities and counties in mind.

Last month we asked you about the perceived ethical standards of your government. One of the most interesting responses came from a manager of a county agency in a Midwestern state. We're hoping he's not representative, but his comments are certainly provocative:

"Only around 10% of our employees believe that we have an ethically operating system. ... I believe that as far as our agency is concerned, the staff perceive (perhaps rightly so) that there is a sort of double standard for how management is allowed to 'cheat' on their time off and staff are held to strict standards. There is also a belief that our senior managers (except the CEO), all who have been at the agency for 30 to 39 years, are at some level corrupt. It is a complex and difficult issue to deal with and staff perceive that there will be no true agency cultural/ethical shifts until the long-term managers retire."

The Rubber Room? There's ongoing debate about the reasons why some school districts spend so much more per student than others, without any sign of better results. The Chicago Public Radio program "This American Life" recently featured a story that shed some light on why this might be true in New York City. According to the program's Web site, this was "the true story of little-known rooms in New York City Board of Education buildings. Teachers are told to report there instead of their classrooms. Usually, no reason is given. When they arrive, they find they've been put on some kind of probationary status, and they must show up every day until the matter is cleared up. Teachers continue to receive their salaries, but it can take months, sometimes years, until they are either returned to the classroom or fired. So every day the teachers report to the 'Rubber Room'... to wait."

You can listen to the broadcast here.

This Baby Boom Generation business is tricky. There's been a great deal of attention paid to the needs of the baby boomers as they age -- whether it's housing, insurance, health care or something else. But we've had a few conversations lately that make us think there may be too little discussion of the people who depend on the baby boomers. What happens, for example, to the growing number of young people, advancing into middle age, who have been cared for by their parents, because they are physically or intellectually incapable of caring for themselves? When Mom and Pop need to move out of the family house, where do they go? And who has the money to pay for them to go there? The states?

And what about the baby boomers' folks? Most of the lucky people we know, who are about our age, spend a fair amount of time helping out with their parents in one way or another. As life expectancy gets higher, grandma and grandpa are going to find themselves without that critical support when their kids become seniors. What becomes of them?

We've written a couple of items about the difficulties government employees face in attending conferences or traveling to other states in the face of tight fiscal times. Our observation, as careful readers will remember, is that there are many benefits to these expenses and they shouldn't be cut off thoughtlessly. Now we've come across a new wrinkle. Turns out that some folks in the states and localities are so intent on gaining professional growth through conferences and other gatherings that they actually offer to pay the full fare themselves. And they're told "no." The ostensible reason? It would create the impression of unfairness to other employees. No additional comment seems necessary.

As city leaders confront the vast financial problems posed by the housing bust, they would be well served by reading a study done by Community Research Partners at the request of ReBuild Ohio, a consortium of local government, nonprofit and civic organizations. The mandate was to answer these questions: "How many vacant and abandoned properties are there in Ohio cities? What are the costs to local governments and neighborhood residents? What are communities doing to track and address these problems."

We can hardly imagine a more timely topic given the likelihood that the number of vacant and abandoned properties is set to grow dramatically right now.

We'll let the report speak for itself, but some of the outstanding conclusions reached in eight Ohio cities (Cleveland, Columbus, Dayton, Ironton, Lima, Springfield, Toledo and Zanesville) are compelling:

o There were 25,000 vacant and abandoned properties that cost some $15 million in annual city services.

o Beyond the direct expenses, they represented some $49 million in cumulative lost property tax revenues.

o The cities had limited capacity, on their own, to track and address vacant and abandoned properties.

Hard times? We gave a talk the other day to the National Association of State Treasurers. We were last on the bill, following a number of other men and women who were addressing a wide range of topics, many fiscally related. When we left, one of the participants thanked us for our contribution and then said this, "You know, all day long all we've heard is bad news. One speaker after the other. Your presentation was nice, because you had some suggestions, but it was still based on troubles. I got a lot out of the day, but mostly all I want now is a drink."

"Leaner and meaner." Who hasn't heard that phrase used repeatedly to describe a goal of good government? One way any number of states, cities and counties try to get to the lean part is by cutting administrative expenses wherever possible. This may make sense in some situations. But it's worth watching out for cases where more staff actually can make things more efficient.

According to a recent piece published by the Agency for Healthcare Research and Quality, "Bita A. Kash, Ph.D., M.B.A., of Texas A & M University, and colleagues examined the relationship between 10 financial ratios (6 activity expense ratios, 2 growth and risk ratios, and 2 profitability ratios) and staffing levels and turnover in 1,018 Texas nursing homes. The researchers measured expenditures by the ratio of a given type of expenditure to net resident revenues. They found that higher administrative expenses (implying more management capacity) can reduce both staff turnover and staffing levels."

It make sense. If staff is used most efficiently, money will be saved and morale will stay higher. But that kind of efficiency requires management. And that requires managers.

Along the same lines, here's a real success story, which we found in Ohio's Columbus Business First. Under normal circumstances, employees at Ohio State University who had medical problems would wind up at home while they mended. But the decision was made to allow Ohio State's disabilities benefits manager to spend $300,000 hiring three employees "to match ill or injured workers with light-duty assignments instead of sending them home," according to Columbus Business First. The hoped-for savings: $1.5 to $2 million in lower disability payments and medical costs. That would have been a home run. But the program hit a grand slam, saving some $2.2 million in its first six months, with a possible $4 million in savings for the year ending in June.

And while we're still talking about efficient use of staff, consider this study we ran across a few weeks ago. According to a new poll by LifeCare Inc. and publicized by, the biggest single barrier to on-the-job productivity last year was being "overloaded." Almost four out of ten workers said they just didn't have enough time to accomplish all their tasks. This survey wasn't focused on the public sector, but it's our guess that if it had been, that percentage would still hold true -- or rise.

A good piece of advice came in the other day from Don Cowan, who works in the budget office for Georgia's Department of Labor: "I have worked for many different agencies during my 30 plus year career in Georgia state government," he wrote. "One important lesson I pass on: I have learned what to do and what not to do. Learning what not to do pays off more in the long run."

Economic development is good for city revenues. Nobody is going to argue with that.

Or are they? Consider the results of this excellent audit done in Fullerton, California. Back in 2002, the city created a restaurant district, and it's been a smashing success. The number of restaurants and bars has grown dramatically, and the downtown has turned into a much more vibrant place. This has brought in about $500,000 a year in new revenue.

But when the auditor looked a little more closely, it turned out that the city's costs for police, fire and maintenance services have also skyrocketed. The estimate is that this new growth costs the city about $1.5 million a year. The city council paid attention and "approved new restrictions on food establishments, limiting outdoor drinking areas and authorized the City to explore new methods of raising revenue specifically tied to the ... district."

Hooray for Fullerton. This is the kind of careful analysis that others should emulate.

Governments in America have unquestionably made improvements in the quantity and quality of financial information they share with citizens. But, according to a recent survey by the Association of Government Accountants, there's still a large "expectations gap." As the AGA states, "The public overwhelmingly believes government has the obligation to report and explain how the government generates and spends its money; however, government is not meeting expectations in any area included in this survey.... Across all levels of government, those surveyed held being 'open and honest in spending practices' vitally important but felt that governments did extremely poorly in terms of being 'responsible to the public for its spending.'"

We can't help but wonder whether the real problem here is that many entities publish all sorts of clear, worthwhile information, but don't take the next step -- making sure that stakeholders actually know how to get their hands on this good stuff.

When we give young reporters advice about reaching government officials, one of our favorite tips is this: "Call on a Tuesday." This is based entirely on personal experience. We would never have had the gall to share this advice with an audience larger than one or two, until now. A recent survey by Robert Half International asked 150 executives to name their most productive day. Six in ten listed Tuesday. It is, as we've suspected, the day when people really start their new week -- most of Monday is spent catching up with last week.

Times are hard. We know that. And we applaud states that are exploring ways to make legitimate budgetary cuts, rather than fiddle around with accounting gimmicks or one-time revenue sources. But there are some cuts that seem to us as particularly short-sighted. According to the Center on Budget and Policy Priorities, Medicaid in Mississippi is "slated for a 13.9 percent reduction, once special funds are taken into account. The specifics of the cuts are not yet available. Public health programs such as vaccinations, disease management, obesity awareness, and mosquito control would be subject to an 11.8 percent reduction." It's that last that particularly alarms us. It feels like preventive health care -- most notably vaccinations -- is pretty well proven to be fiscally sensible, not just rational public policy.

Our quote of the month award goes to Governor Sonny Perdue of Georgia. He's come out opposing a $672 million plan to eliminate the state's car tag tax. State analysts have raised concerns that while this may be a popular measure, it lacks long-term fiscal logic. It could force the state to dig into reserves and cut back on services -- without even knowing now what those services might be. Said the governor: This is like the "Wright Brothers jumping off of Kitty Hawk and designing the airplane on the way down."

There's a little brouhaha going on in Morrison County, Minnesota, in the wake of a comment by the county administrator when he noted it was "spooky" that there are no educational requirements for the county treasurer's job, even though the position oversees a publicly funded investment portfolio worth $20 million, according to the St. Cloud Times. It's important to be clear that we didn't see anyone questioning the work of the current treasurer -- it's more a matter of principle.

It's a principle we're rather concerned about. Whether offices like this are elected or appointed, it feels like there should be some kind of minimum standards applied. We recently wrote about this at length, in terms of the often sub-standard education and training on the part of members of public-pension boards. In fact, when you consider the overemphasis on credentials for so many jobs in society today, it seems odd that billions of dollars are controlled by men and women who had the good fortune to be in the right place at the right time.

Eight years ago, we wrote a column in Governing about employee suggestion programs. At the time, we lamented the fact that so many of these efforts to let good ideas trickle up from every corner of government weren't as successful as they should be. We can't claim that this continued to niggle at us, but we were receptive when we came across a piece by Brian Barber in Oklahoma's Tulsa World a few weeks back. Apparently, the municipal-employee suggestion program there "does not work," according to the city council attorney. From 1998 to 2005 only 180 suggestions were submitted and 44 were accepted.

The article pointed to some of the problems, based on a conversation with the attorney, Drew Rees: "Some employees who were informally surveyed said they feared retaliation from their supervisors if they suggested improvements.... The process also was deemed complicated with far too many rules that seemed to discourage participation.... Employees also said they distrusted the process because they could not track their idea's progress and could not argue on its behalf once it had been submitted."

The city is now considering overhauling the effort, with bigger payoffs for good ideas. We'll keep you posted as this moves forward.

You New Yorkers can skip this item, as you've probably already read about this in one of the local papers. But we thought it was important news to share with the rest of the country. Just a little while back, the city announced its new "Citywide Performance Reporting System." It's a performance measurement tool that will make some 300 indicators available to the public online.

According to Jeff Kay, director of the Mayor's Office of Operations, "CPR is the culmination of more than two years of work coordinated by the Office of Operations, and involving more than 40 City agencies. CPR will let us use City data to identify problem areas and improve service delivery. It is another step in improving transparency and customer service for New Yorkers."

Of particular significance, CPR data is divided into various themes, such as public safety, education or infrastructure, so that citizens can begin to see the forest and the trees.

One personal note: Don't try to find the site by plugging "CPR" into your search engine. You're likely to find yourself deluged with links to places that'll help you keep somebody's heart beating.

Research Assistant: Heather Kleba