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White Hats Public Sector

Examples from November 1994

New Ideas

In Reinventing Government (1993 book by David Osborne & Ted Gaebler) we find that Visalia, California made it easier for the local school district to build a new school by arranging a four-parcel land swap and sale.

Orlando, Florida got itself a free city hall by letting a developer build two office towers on the same seven-acre parcel.

Fairfax County, Virginia gave a private developer up to 146 acres of prime public land valued at $50 million to $70 million in return for construction of a new county government center.

In 1993 Minnesota's Department of Revenue saved Minnesota taxpayers $60,000 in printing and mailing costs by publishing 700,000 fewer tax booklets. The state sent instead a postcard and address label to the almost one million taxpayers who use professional tax-preparers and therefore didn't need the income tax forms and instruction booklets. Officials estimated an additional savings of 102,500 kilowatt-hours of electricity, 820 trees and 460 thirty-gallon cans worth of landfill space. This was reported in the March, 1993 issue of Governing magazine.


In Florida, first-time convicted criminals are paroled into the care of the Salvation Army---25,000 at a time, according to Gaebler and Osborne.

Massachusetts has an interesting program for juvenile offenders. Instead of institutional correction facilities juveniles are housed in group homes. Studies have shown this leads to low recidivism rates and fewer violent crimes, but keeping juveniles in institutions was actually more expensive than housing them in community-based group homes.

The number of prisons doubled in ten years to 100,000 and could double again. Just five years ago, 1986, CA, TX and NY were neck and neck for prison population - it is up 90% in the rest of the country but 250% in California. California has 35,000 more prisoners than Texas and 45,000 more than New York. Forty percent of California's prisoners have no prior record for violence or were not charged for a violent crime. It costs $30,000 a year to keep someone in prison in California.

Barry Krisberg of the National Council on Crime and Delinquency says we should put low-risk prisoners in low-security facilities or even release them. The idea of Mr. Krisberg is to transfer prison dollars to education as the way children are brought up is seen as the single largest cause of delinquency. He says we can't afford to warehouse prisoners, we must treat their addictions and lack of education etc. That goes for those "potential prisoners" still in the community. He wants to see preventive programs started with emphasis put on young kids in the form of Headstart and Nutrition programs.

In West Philadelphia, Sister Falaka Fattah, has significantly reduced gang violence with her House of Umoja Boystown, where over the years she has provided shelter for about 600 gang people. Begun in her home more than 20 years ago, the program includes tutoring and training, operating small businesses and renovating more than 20 row houses. The Philadelphia Psychiatric Center found that only 3 percent of the ex- offenders sent to the House of Umoja were ever arrested again. The re- arrest rates ranged from 70 to 90 percent in the city's more expensive correctional facilities.

In Crime and Human Nature, social scientists James Q Wilson and Richard Herrnstein made a persuasive point with the following assertion: During the 1960s, one neighborhood in San Francisco had the lowest income, the highest unemployment rate, the highest proportion of families with incomes under $4,000 a year, the least educational attainment, the highest tuberculosis rate, and the highest proportion of substandard housing....That neighbor- hood was called Chinatown. Yet in 1965, there were only five persons of Chinese ancestry committed to prison in the entire state of California."

School Reform

In Chicago, every public school is now run by a council of six parents, elected by parents; two community members, elected by community residents; two teachers, elected by the school staff; and the principal. This council acts as the board of directors: it hires the principal (on a four-year performance-based contract), prepares a school improvement plan, and prepares the school budget, in accordance with the improvement plan. Principals are now hired and fired based on merit rather than seniority. After the first year, 81 percent of parents and 62 percent of teachers said their schools were operating 'better' than before the reform. Seventy -eight percent of parents reported improvements in safety and discipline, 61 percent saw improvements in the physical plant, and 83 percent reported progress in educational programs.

In 1968 New Haven Connecticut set up Governance Management Teams consisting of parents, teachers, staff and a principal at two poor- performance schools. In ten years their students were performing at their grade level and 6 years later they not only had the best attendance record but students were scoring third and fourth highest in the district. By 1990 this pilot program was in all 42 New Haven schools and in over 60 schools in eight states.

Arkansas encourages parents to give their preschoolers a head start at home with a program imported from Israel - a Home Instruction Program for Preschool Youngsters. The simple workbooks have been used by over 2,500 welfare mothers who get once a week visits from a trained helper. In 1989 only 6 percent of the children entering the HIPPY program tested at or above the national average but 74 percent fell into that category by the program's end.

Privatizing Education

EAI (Education Alternatives Inc.), a commercial company, took over nine schools in the Baltimore area in 1993. The program has not been in place long enough to see the difference in test scores but the parents are more involved, the facilities are better and it is evident that the children are flourishing under the private regime. Hartford Connecticut has recently enlisted the services of EAI to turn around its faltering school system.

Job Training Programs

Massachusetts sets up government centers and hires counselors and trainers to help displaced workers find work when a plant announces a closing or major layoff. Massachusetts' Bay State Skills Corporation is one of the most effective job training and placement programs in the country. The state acts as a broker between businesses that need trained workers and companies that provide training. Massachusetts encourages retraining by offering start-up capital to corporations and educational organizations who promise to create new training programs. The state is careful, however to make certain the programs serve genuine market needs. In five years Massachusetts placed 80 percent of more than 37,000 dislocated workers, in jobs that paid more than their former wages. The program is being duplicated in another half dozen states. That helps the economy because for every one percent of unemployment (one million one hundred thousand workers) it costs the federal government $35 billion.

Minneapolis catalyzed the formation of a series of neighborhood networks involving community organizations and businesses, to get local corporations to hire low-income residents. (One city employee, whose salary was paid by the business community, acted as a coordinator and trouble- shooter.)

Arkansas state government used funds to start its Total Quality Management programs to help private employers. MA and PA used seed money to encourage small manufacturers to increase their productivity.

In Connecticut, people used to stand in unemployment lines to register for compensation, then go to a second line for a job-matching service and finally make their way through a third line to sign up for job training. Computers have allowed staff to redefine their role as helper rather than administrator. The lines have given way to sit-down interviews. Before implementing the program, policy makers interviewed 500 front-line employees to get suggestions and support.

Nursing Home Care

By financing home health care and community health care, Florida keeps elderly residents out of nursing homes and saves $180 million a year in the bargain.

The Illinois Dept. of Public Aid reimbursed nursing homes for Medicaid patients according to the level of care required. Bedridden patients required more services and so the state thought it logical and fair to pay more for these patients. However the state discovered an unintended consequence which made it change its ways. Nursing home operators tended to keep more patients bedridden for longer periods of time.

Illinois devised a rating system similar to the star system used by travel clubs to rate resorts, hotels and restaurants. According to Gaebler and Osborne, the authors of Reinventing Government, stars were given for patient satisfaction, community and family participation, and the quality of the nursing care.

America Works

America Works is a private for-profit company, but it deserves to be mentioned here because it works so well with state governments in reducing welfare rolls. America Works is an employment agency that finds entry-level jobs for poor unskilled workers and then monitors candidates and supports them in the workplace. Success is also profitable. Local governments that are innovative enough to use the service should be applauded.

A Cost Saving Act of Kindness

When Homestead High School in Cupertino, California outfitted its band with new uniforms it took the time to locate a school with the same name in Florida that could use the old uniforms. Commendation should be extended to officials at the two schools and the commercial moving company who agreed to deliver the uniforms.

Ford Foundation Innovation Awards for 1993

Each year ten innovative state and local government programs receive recognition and $100,000 grants from the Ford Foundation. Four of the winning programs are described below. The quotations are all from Governing magazine's November 1993 issue.

The Community Voice Mail program in Seattle Washington was developed by the Seattle Worker Center. It gives unemployed or homeless people a way to remain in contact with the world. A user gets a phone number, records a personal greeting and receives a private access code to retrieve messages. The system can be accessed from any touch-tone phone. ... A survey of 141 voice mail users between May and November 1992 indicated that 83 percent had found jobs in less than eight weeks. The program has an annual budget of $100,000. Each mail box costs only $2.90 a month. Besides getting welfare recipients into jobs more quickly, social workers spend less time tracking down clients and have more time to provide counseling.

Columbia, South Carolina received a grant for its Police Homeowner Loan Program. (The program) offers police officers low-interest, no-down-payment mortgages on inner-city homes that the city renovates for them. By renovating rundown properties, the program helps revitalize neighborhoods and provide better housing. By moving police officers and their families into neighborhoods they serve, the plan enhances community-based policing and reduces crime rates. To encourage participation, the chief of police rewarded residency in the city with a Christmas bonus and made promotions dependent upon it. The success of the program was due to a combination of factors but an essential component is a strong and vibrant neighborhood organization.

Lansing, Michigan was recognized for its computer learning centers. Rather than ask businesses or schools to donate hand-me-down computers, $72,000 of housing commission funds was used to purchase state-of-the-art high tech computers "slicker than the computers at school". Since the housing commission set up three Computer Learning Centers three years ago, 80 percent of the 300 kids who live in the public housing projects have become regulars at the overcrowded but active centers, and kids from nearby neighborhoods have started to come, helping to break the isolation of public housing projects from neighborhoods that surround them. Schools report that the youngsters in the computer program are performing better academically, that school attendance is up and tardiness is down. The police department reports decreased youth involvement in crime and drug use in the housing projects and improved relationships between police and public housing residents. Parents who live in the projects are also wandering into the centers. Some...are taking community college business courses that the centers have begun to offer via computers.

Salem Oregon received its award for installing a new computerized bidding system which has saved Oregonians millions of dollars. Until January, 1992, Requests For Proposals (RFP) were handled in Oregon as they are in most places: Vendors registered with the state, then periodically received fat RFPs in the mail. Keeping the paper mill churning required several dozen bureaucrats, and postage was running at $144,000 a year. Now, instead of waiting for the mail, vendors use their modem- equipped personal computers (or those in chamber of commerce offices, libraries and community colleges round the state) to call the state's Vendor Information System computer. They can register on-line, download the appropriate RFPs and even have access to historical information: who got the last contract, who lost out, how much the winning and losing bids were. The cost of the equipment and the marketing of the system to vendors cost less than $400,000 whereas the savings due to more competitive and knowledgeable bidding saved the government more than $17 million in purchasing. Oregon is planning to expand the system to involve local governments and allow them to reap the savings also.

Entrepreneurial Government

The Montreal Olympics in 1977 left Canadian taxpayers with $1 billion debt that won't be paid off until sometime into the next century. The 1984 Olympics which took place in Los Angeles was a very different story; it turned a profit of $225 million. How? For the first time in 85 years it was financed without public money. Entrepreneurial organizers recruited corporate sponsors and 50,000 private sector volunteers to handle transportation, food services and even to provide the very sophisticated anti terrorist systems required to protect the thousands of dignitaries, athletes and tourists from 118 countries. With the 1984 Olympics as a model, public managers all across the county are beginning to ask "How can this turn a profit?"

Milwaukee sold sewage sludge for $7.5 million.

Phoenix gets an annual $750,000 by selling methane gas, a byproduct of its waste water treatment, to neighboring Mesa, Arizona. Mesa residents use the gas for cooking and heating.

Chicago used to pay $2 million a year to have abandoned cars towed. Now it receives $2 million a year from a private company that pays for the privilege of towing the cars.

The St. Louis Police Department developed a software program that allows officers to call in rather than write up their reports. This saves time and labor, but better still it generates $25,000 each time the software is sold to another police department.

The Washington State ferry system makes money from selling advertising in its terminals and leasing space to operators of two duty-free shops on two international ferries.

San Bruno, California operates its own cable television system which offers lower priced comparable service than its private sector competitors and makes a profit besides.

Paulding County, Georgia built a prison with four times the beds it needs and ended up with a $200,000 profit its first year by taking in the overflow from other jurisdictions.

Some enterprising California police departments have come up with a similar idea but without the expense of building a new prison. They rent blocks of cheap motel rooms over the weekends and pay someone to make sure convicted drunk drivers, who generally are sentenced to serving time on weekends, stay in the rooms. Whereas Georgia charges $35 a night for use of each bed, California inmates must pay $75 a night for their substitute jail cells.

Visalia, California found that it cost the city $140 to provide umpires, equipment and park maintenance to each softball team every season. It had been charging $25 per team. It decided to raise the fee to $90 because that's all they thought players would bear. However, the fee was finally set at $400 and city managers and softball players were both ecstatic. Why? Because they had decided to recruit team sponsors, who would pay the $400. Ballplayers no longer had to pay a fee, merchants got inexpensive advertising and loyal customers, and the city earned $260 per team, per season." But the story goes on. Soon there were 300 teams and there simply weren't enough toilets. "The finance director assured the recreation director that if she wrote up a request she could get portable toilets tacked onto the end of the five-year capital improvement plan. If she could get a state matching grant, in six or seven year the city could buy her some new toilets. The recreation director set up a concession stand and leased it to A/W Root Beer, the highest bidder. It took 31 months to recoup the money spent on the toilets and from then on the stand generated pure profit of at least $24,000 a year. The ballplayers got not only their toilets, but the opportunity to buy soft drinks, beer, and hot dogs. A and W earned a profit, but so did the city. Where were the losers in that story?



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