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Rebounding From a Budget Deficit, Creating a Culture of Innovation

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Shelley Fulla

The city of Rockford is the third most populated city in Illinois. In 2010, the city needed to reduce a projected budget gap of $5.5 million for FY11 without significantly impacting core municipal service levels. In September 2010, the city began a project to facilitate the assessment of service delivery alternatives ranging from service level approach changes to outsourced service options. The city initially identified eight functional areas of focus for the study. These areas were determined to have the highest potential for impact on the budget deficit, e.g., street sweeping and emergency management services. In all, the project identified potential savings in the range of approximately $11 million. However that is not where the story ends.

The original project has served as a foundation for the city to create its own culture of innovation. It started with the mayor creating a Budget Advisory Committee. This committee included members of the community and looked at operations. This committee tapped into the expertise of the community. They worked to create a set of recommendations about how the city can operate more effectively. Because staff can often get absorbed in the way things have always been done, the city saw this as an opportunity to tap into their community resources, engage them in their work and really look at how things can be done differently.

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Also as part of the larger initiative is a performance measurement review process, RockStat. This process is built around open forums where the quality, efficiency and effectiveness of critical city business processes and services are evaluated and monitored. Forums focus on the ability to bring to the forefront the operational issues that may be limiting the city from reaching its goals while building on the collaborative resources of the team.

As a result, the city has been able to use creative ways to combine staff and expertise in order to get things accomplished. One of the best examples is in forestry. Like many of their counterparts, the city has a problem with the emerald ash borer, and has historically had a backlog of tree issues as a result. When the city chose to outsource its street sweeping activities in the early phases of the program, it committed to dedicating staff to addressing tree issues. The city had a valued employee who sat down and did the financial analysis to see what staff does well and what is cheaper in the market. They found that while tree trimming was more expensive to outsource for them, tree removal was not. This is because liability insurance and specialized equipment is expensive. The city then focused on training staff on trimming, and collaborated with community service providers to take down trees. They were able to get an incredible amount of work done, and due to its change in approach, it saw a complete turnaround in its forestry division. Last year alone the city took down approximately 1,000 trees and trimmed more than that. The city is now looking to partner with community groups, Boy Scout troops and other organizations to replace these trees at a lower cost.

This is not to suggest that everything has been easy for the city. There have been some bumps in the road as it has worked through this program. One of the issues was its street sweeping contract. On the first contract, there were some service issues with the vendor. Like other municipalities outsourcing for the first time, both parties were not entirely satisfied with the arrangement. Rather than suggest that outsourcing doesn’t work, the city chose to apply the lessons learned and put the contract back out to bid. This time around, the city focused on communication with the vendor, council and residents. It followed through on a performance bond, refined its contract language, including work specifications and held a pre-bid meeting to make expectations clear. The city was able to achieve a cost of service reduction of about $600,000.

Another lesson learned for the city was the emphasis on contract management. One initiative in particular, parking management, has taught the city some lessons on coordination. The city proceeded with outsourcing parking management as retirements and other issues created an opportunity to move forward with little staff impact. The estimated annual savings of this decision is $200,000. One of the difficulties with this project is that parking is an operation that affects public works, police, community development and finance. When the project started, there was not one person assigned to coordinate all of the service issues; there were four departments doing four different things with the vendor. The city learned that it needed to have one person ultimately responsible for managing the contract.

These two examples showed city staff that it is important to give staff the trust and flexibility to try some of these things and see how they work. It encourages staff to come forward with suggestions and realize that their implementation is on a trial basis. As a result, people are not afraid to think outside of the box. As a result, some permanent changes were made — not just one-time revenue adjustments

At first, people were scared of the process and defensive of their positions. Through effective communication and flexibility, executives were able to demonstrate that they have compassion for people who have worked their entire career with the city. The focus was on how to redeploy or redirect services in a way that maintained standards of care and quality without needlessly slashing jobs.

The future holds more challenging projects. The first phase looked at some of the common places for improvement. The next phase will focus more on facilities, capital improvements and ways to fund them. Many of the ideas will likely be centered on energy efficiency and better utilization of engineering staff. Whatever the outcome, one thing is for sure. City staff will work through trial and error to continue to make Rockford a more efficient and service focused city.


Author: Shelley Fulla is a senior manager with Baker Tilly Virchow Krause, LLP and works with agencies around the country addressing issues related to performance and operational efficiency. She is a certified Strategic Workforce Planner and published in the areas of organizational effectiveness and technology. Fulla can be reached at [email protected].

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The American Society for Public Administration is the largest and most prominent professional association for public administration. It is dedicated to advancing the art, science, teaching and practice of public and non-profit administration.

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