PUBLIC OFFICIALS of the YEARPUBLIC OFFICIALS of the YEAR GOV11_Cover.indd 1 10/16/12 2:23 PM Assured Guaranty works with issuers and their advisors who want to structure high quality,

THE STATES AND LOCALITIES November 2012 $4.50

Toni PreckwinkleCook County Board President

PUBLIC OFFICIALS of the YEAR

GOV11_Cover.indd 1 10/16/12 2:23 PM

Assured Guaranty works with issuers and their advisors who want to structure high quality, cost-efficient transactions. Investors have confidence in our unconditional guaranty of principal andinterest when due – backed by $13 billion in claims-paying resources – and value the carefulanalysis, ongoing surveillance and market liquidity our guaranty delivers. That’s why we’ve insuredover 8,000 municipal offerings since the financial crisis began. For rock-solid reliability, rely onthe leader in municipal bond insurance, Assured Guaranty. Learn more at assuredguaranty.com

ASSURED GUARANTY CORP.

ASSURED GUARANTY MUNICIPAL

SAVING LIVES IS COMPLICATED.SAVING FINANCING COSTS ISN’T.

Assured Guaranty Municipal Corp. and Assured Guaranty Corp. and Affiliates, New York, New York.

Designer Creative Dir.

Editorial Prepress

Other OK to go

100 Blue Ravine RoadFolsom, CA 95630 916-932-1300

Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100

Cyan Magenta Yellow Black

5 25 50 75 95 100

November 2012 | GOVERNING 1

11.2012

VOL. 26, NO. 2

Crews work to clean up

Joplin, Mo., more than a

year after it was hit by

a deadly EF-5 tornado.

PH

OT

O A

ND

CO

VE

R P

HO

TO

: D

AV

ID K

IDD

FEATURES25 PUBLIC OFFICIALS OF THE YEAR

Bruce Hanna & Arnie RoblanElaine M. HowleJoette KatzJohn E. NixonToni PreckwinkleMark RohrBrian Sandoval

40 SUPER/POWERWhat happens when the U.S. becomes an energy exporting nation? By Dylan Scott

48 EVERYBODY GET TOGETHERAging residents are increasingly turning to cohousing.By Ryan Holeywell

54 MISSING MONEYMore properties are coming off the tax rolls. What are cities doing about it? By Mike Maciag

GOV11_01.indd 1 10/12/12 1:59 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

PROBLEM SOLVER

60 Housing Teachers To improve schools, a county in West Virginia is strengthening its infrastructure.

62 Smart Management Who wins when public employees bid against private companies for a city contract?

63 Idea Center After a rash of large chemical fi res, Camden, N.J., has taken to profi ling abandoned buildings.

64 Tech Talk Smarter traffi c signals could make life easier for drivers in Washington, D.C.

66 Public Money Changes in California’s political system may point the way for it to meet fi nancial challenges.

68 Last Look Duluth, Minn., fi nds a new use for its old City Hall.

DEPARTMENTS

4 Publisher’s Desk

6 Letters

OBSERVER

9 Uncooperative GovernorsThey don’t always play nice with

legislators. Does it matter?

10 Let’s Talk About RaceCleveland hosts a series of

forums on race relations.

12 Counting VotesEven with new technologies,

human errors still creep in.

POLITICS + POLICY

14 Dispatch A Georgia program opens young minds to a career in government.

16 Potomac Chronicle Once the election is over, it’s time to start governing.

17 FedWatch Should states decide same- sex marriage?

18 Health Technology could lend a hand in stemming addictions to opioids.

20 Green Government Microgrid technology faces its fi rst big test.

22 Economic Engines Millennials will soon be putting down roots. Are cities ready?

23 Urban Notebook Urban casinos aren’t just about taxes and jobs, but amenities too.

14

GOVERNING | November 20122

62

© R

ON

HA

VIV

/VII/

CO

RB

IS

DA

VID

KID

D

SH

UTTE

RS

TO

CK

.CO

M

18

GOV11_02.indd 2 10/12/12 3:03 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

siemens.com/answers

Siemens answers generate cleaner electrical energy and exports for the U.S.

Energizing our grids and our economy.

Once an international textile center, Charlotte, North Carolina, is rapidly becoming a major energy hub. Here, Siemens builds large-scale steam and natural gas turbines that help generate cleaner, more efficient electrical energy. Power producers as far away as Saudi Arabia are ordering Siemens turbines built in Charlotte.

We’re helping here at home, too. Charlotte’s economy gets a boost. And thanks to our turbines, communities across the U.S. will enjoy cleaner air and highly efficient, reliable electricity. Somewhere in America, the people of Siemens spend every day creating answers that will last for years to come.

© Siem

ens A

G, 2012. A

ll Rig

hts R

eserved.


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

PUBLISHER’S DESK

Honoring the Best

November is one of our favorite months at Governing because it’s the issue in which we honor Public Offi cials of the Year. For 18 years we have selected and recognized state and local leaders for their commitment to the

public sector and for their achievements in government service. Throughout the year, we receive many nominations and spend months researching the fi nal candidates, eventually selecting the eight profi led in this issue [page 25] and later honoring them at a reception here in Washington, D.C.

The selection process is a humbling one. Reading through the recommendations reveals a great number of individuals who, in most cases, have been recommended by their employees or

colleagues for work that would otherwise go unnoticed and unre-ported. One of the pleasures of working for a publication focused on state and local government is that I get a chance to see a part of the public sector most don’t witness—a group of employees tirelessly dedicated to their work and the notion of public service.

Arkansas Gov. Mike Beebe, a 2011 honoree, said in his acceptance speech last year that it’s public offi -cials’ responsibility to restore faith in government. He added that for

every public offi cial who’s garnered negative publicity, there are countless others who go unrecognized for doing the right thing. It’s why we choose to honor outstanding public offi cials.

This year three additional people will be recognized by Governing at our awards dinner this month. They aren’t public offi cials—not yet, at least. Rather, these three individuals are part of a program to improve government. Each year, the University of Pennsylvania’s Fels Institute holds a competition called the Public Policy Challenge in which it invites students from fi ve universities to compete in developing an innovative policy proposal for state and local government. The winning team receives startup funding to implement its solution.

This year, the Fels Institute invited several past Public Offi cials of the Year to serve as judges. They chose to recognize Miriam Altman, Barrie Charney Golden and Alexandra Meis, graduate students from New York University’s Wagner School of Public Service, for a project which uses an app to track student atten-dance in the New York City public school system. We’re excited to partner with Fels and to support future leaders in what John F. Kennedy referred to as a “proud and lively career” in public service.

I look forward to hearing from you about our coverage. You can always reach me at [email protected].


Publisher Erin Waters

Editor Tod NewcombeExecutive Editor Jonathan WaltersEditor-at-Large Paul W. TaylorManaging Editor Elizabeth DaigneauSenior Editor Zach PattonAssociate Editor Jessica MulhollandChief Copy Editor Miriam Jones; Copy Editor Elaine Pittman Staff Writers Ryan Holeywell, Dylan ScottCorrespondents John Buntin, Alan Greenblatt Contributing Editors Penelope Lemov, Steve TownsColumnists Katherine Barrett & Richard Greene, William Fulton, Peter A. Harkness, Donald F. Kettl, Alex Marshall

Editor, Governing.com Kathy A. GambrellDeputy Editor, Governing.com Caroline CournoyerData Editor, Governing.com Michael MaciagSocial Media Specialist, Governing.com Brian Peteritas

Creative Director Kelly MartinelliDesign Director & Photo Editor David KiddArt Director Michelle Hamm Senior Designer Crystal HopsonIllustrator Tom McKeithProduction Director Stephan Widmaier

Chief Marketing Offi cer Margaret MohrMarketing Director Meg Varley-Keller

Founder & Publisher Emeritus Peter A. Harkness

Advertising 202-862-8802Associate Publisher, Infrastructure Marina LeightAssociate Publisher, Finance Erica Kraus Account Director Jennifer GladstoneAccount Managers Jason Easley, Kori Kemble, Kyle KochOffi ce Manager Alina Grant Digital Media Associate Elisabeth FrerichsMedia Account Coordinators Hillary Leeb, Lauren Mandel, Cheleyne SummerhaysMarketing/Classifi ed [email protected]

CEO Dennis McKennaCOO Paul HarneyCAO Lisa BernardExecutive Editor Steve TownsExecutive VP Cathilea Robinett

Reprint Information Reprints of all articles in this issue and past issues are available (500 minimum). Please direct inquiries for reprints and licensing to Wright’s Media: 877-652-5295, [email protected]

Subscription/Circulation Service

Eenie Yang [email protected]://www.governing.com/subscribe

Governing (ISSN 0894-3842) is published monthly by e.Republic Inc., with offi ces at 1100 Connecticut Ave. N.W., Suite 1300, Washington, D.C. 20036 and at 100 Blue Ravine Road, Folsom, CA 95630. Telephone: 202-862-8802. Fax: 202-862-0032. Email: [email protected]. Periodical postage paid in Washington, D.C., and at additional mailing offi ces. Copyright 2012 e.Republic Inc. All rights reserved. Repro-duction in whole or in part without written permission of the publisher is prohibited. Governing, Governing.com and City & State are registered trademarks of e.Republic Inc.; unauthorized use is strictly prohibited. U.S. subscription rates: Government employees—free; all others—$19.95 for one year. Foreign subscriptions: $74.95 in U.S. funds. Postmaster: Send address changes to Governing, 100 Blue Ravine Road, Fol-som, CA, 95630. Subscribers: Enclose mailing label from past issue. Allow six weeks. Member: BPA International. Made in the U.S.A.

Erin Waters, Publisher

GOV11_04.indd 4 10/12/12 2:05 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Work anywhere, security everywhere.AT&T has solutions to protect constituent data, no matter where it is – in a pocket, on a desk or dwelling in a data center.

State and local governments can count on AT&T’s legendary reliability to provide both security and solutions to support and protect your agency.

Rethink how government does business inside the network of possibilities from AT&T.

To fi nd out how, visit att.com/secureworkforce

VU

LNE

RA

BLE

PRO

TE

CT

ED

Download the free scanner app at http://scan.mobi and scan this code to learn more. © 2012 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other AT&T marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affi liated companies.


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

LETTERS

Boomers Weigh InAuthor Neil Howe is out of touch [“Talkin’ ’bout My Generation,” September 2012]. Boomers got together and protested the Vietnam War; got the vote for 18-year-olds; promoted Roe v. Wade; changed the stuff y habits of their parent’s genera-tion by bringing social problems out into the open, like segregation; and worked to combat the infl ation of their parents’ spending habits. Our parents had more money when the husband retired than when he worked, thanks to generous corporate pensions which dried up and disappeared for boomers.

—Randy on Governing.com

Great multimodal transportation is criti-cal to quality of life for seniors [“Boom(er) Town,” September 2012]. I am a boomer, over 60, living and working in an East Coast city with extensive and varied tran-sit. I had always planned to move back to my home state, Wisconsin, when I “retired.” I have since changed my mind, realizing that I would be forced back into a car lifestyle because transit investments have been inadequate. Wisconsin should reconsider the high-speed rail project that was rejected. It would have allowed the populace to stay in their hometowns and take jobs in Madison and Milwaukee, com-muting to work by high-speed rail.

—Patricia ZingsheimWashington, D.C.

You need to do an article on the dramatic shift in driving behavior and the determi-nation seniors will have to keep their cars. Perception issues, reaction time, signage/larger letters, more advanced notifi cation of exits, handicap parking—it is going to be like a demolition derby. I just turned 65, who will save me from myself? Take a global look at what countries around the world are doing.

—Kevin Conway Ontario, Canada

Defi ne ‘Comprehensive’Unfortunately, [author Jonathan Walters] appears to be another individual who does not understand the purpose of the comprehensive annual report [“Looking at the Books,” September 2012]. It is a document that provides information on the fi nancial position of the government in accordance with current accounting standards at a certain date in time. It is reviewed by external auditors for com-pliance with those standards. If you want something predictive, you should focus

on the budget document. By its very nature, it is required to look at least one year in advance. It is here where projec-tions about the future are appropriate. The CAFR provides evidence that fi nan-cial transactions were recorded and assets were properly accounted. Thus it fulfi lls a very important, though limited, role.

—Ed Mullins on Governing.com

Bond agency rating reports are certainly not perfect for either the public sector or the private sector, but they do play a critical role in objectively assessing an organization’s ability to repay its debt. My experience is the real audience for a CAFR is the bond rating agencies. Try getting a AAA bond rating without having a rock solid CAFR and fi nancial plan for pay-ing back the bond proceeds in the future. When the rating agencies want better or diff erent information from government fi nancial reports, I am all ears. When it is GASB sticking its head out the window from its ivory tower, I pay as little atten-tion as possible.

—David FrischmonCarver County, Minn.


Correction: In the October issue of

Governing, Alan Greenblatt’s article “All Politics is

National” mistakenly referred to Iowa Senate

Democratic leader Mike Gronstal as Matt Gronstal.

“ GOVERNING magazine came out to Iowa and

followed me around and put our story on their cover!

Pretty cool ... though I’ve already taken some fl ack

from some for carrying a ‘purse’ while I knock [on]

doors (see cover photo). I don’t care what you call it—

it helps me accomplish my job each day—make fun

of me all you want! :).”

— Iowa Senate candidate Matt Reisetter, who was featured on the October cover, on his Facebook campaign page

GOV11_06.indd 6 10/16/12 10:08 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Learn > Plan > Act

IN 2030, 1 IN EVERY 3 AMERICANS WILL BE 50 OR OLDER. IS YOUR COMMUNITY READY?

Visit AARP’s new online resource, AARP Livable Communities: Great Places for All Ages,SM

at aarp.org/livable for valuable information to help you learn, plan and act on behalf of

your residents. At the AARP Livable Communities website you’ll find the latest information on

livable community issues, plans from other communities, and guidance on how to fund and

implement local initiatives. Through research, policy analysis, and on-the-ground experience

from aarp.org/livable, you’ll find practical guidance and resources for making your community

livable for all ages.


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

VIP PASS

THIS IS YOUR

AS A PRIOR ATTENDEE

Jan. 29 – 30, 2013National Press ClubWashington, D.C.

Your State & Local Government Market Briefi ng Event

Register by December 21st and SAVE $200!

governing.com/outlook


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

9November 2012 | GOVERNING

When Governors Don’t Play Nice

FLIC

KR

/TH

E N

AT

ION

AL G

UA

RD

SOME GOVERNORS don’t treat leg-

islators like equal partners. And they’re

not. Almost any governor can dominate

both the policy agenda and how it’s

likely to turn out. “If you’re a legisla-

tor and you look at the governor, he’s

calling the shots, whoever he is,” Rut-

gers political scientist Alan Rosenthal

said—at the recent annual meeting of

the National Conference of State Legis-

latures, no less.

But some Louisiana legislators

think Republican Gov. Bobby Jindal

has taken things too far. Jindal has

never been keen on consulting with

legislators, but after their last ses-

sion ended, Jindal spent the summer

slashing nearly $1 billion in spend-

ing that legislators had approved. He

cut some programs by 34.5 percent

(35 percent reductions would have

required legislative approval) and shut-

tered major facilities such as a prison

and a mental hospital.

All this without so much as a by-

your-leave from legislators. In some

cases, the cuts came down from the

governor’s offi ce with less than an

hour’s notice. “You can’t legislate cour-

tesy,” says longtime Louisiana political

observer John Maginnis. “He may feel

it’s the easiest way to do it. If you have

to make a painful cut, you just do it and

don’t give people forewarning so they

can raise hell.”

Legislators don’t deny that Loui-

siana’s budget situation called for

action, particularly in light of a drop

in federal Medicaid reimbursements.

They just believed that they should

have been part of the conversation.

“Most of the cuts might be right, but

we have no input,” says state Rep.

Dee Richard.

Richard has been trying to con-

vince his colleagues to call themselves

into special session to address Jindal’s

cuts. He hasn’t had success. The

legislative leadership still has Jindal’s

back. And Richard and other legisla-

tors unhappy with the governor’s

do-it-himself budget cutting are

worried that the current levels of out-

rage might dissipate by the time the

Legislature reconvenes for its next

session, which isn’t until March.

It’s possible that they’ll fi nd oppor-

tunities for revenge at that time. In

most states, a governor who is too

high-handed will often fi nd his agenda

a tough sell for the rest of his term.

Some governors become accustomed

to having their vetoes overridden on

a bipartisan basis. “If the governor

ignores the legislators, they have the

power to ignore him back,” says Thad

Kousser, co-author of a new book, The

Power of American Governors. “You

can’t sit back in the governor’s chair

and think any of these things are going

to happen automatically.”

Louisiana might be a special case,

however. Its governors get to appoint

many top legislative leaders, includ-

ing the House speaker and committee

chairs. “My advice to you, if you want a

consultative relationship with the gov-

ernor,” says Rosenthal, “is move to a

different state.”

—Alan Greenblatt

Louisiana Gov. Bobby Jindal

doesn’t work with legislators.

Does that matter?

GOV11_09.indd 9 10/12/12 2:16 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


“I was invited to the picnic, and I was the

main course.”

CLE

VE

LA

ND

MA

YO

R’S

OFFIC

E

Let’s Talk About RaceCLEVELAND HAS ITS SHARE of race-related problems. But at least it’s willing to talk openly about them.

The city’s Community Relations Board has started a yearlong series of forums on race. “It was a proactive step in relation to the Trayvon Mar-tin shooting,” says Ronnie Dunn, an urban affairs professor at Cleveland State University. “They decided it was best to do something proactively to address issues of race in the city of Cleveland.”

The city does have issues. Cleveland consistently stands uncomfortably near the top in rankings of the nation’s most segregated metropolitan areas. Incar-ceration rates tend to track such segregation. The Cleveland area supplies 20 percent of the prisoners in Ohio state penitentiaries, with a major chunk of that number—fully 79 percent—coming from just fi ve pre-dominantly African-American neighbor-hoods on Cleveland’s east side.

Even before the recession, unem-ployment among African-Americans in Cleveland was near 15 percent. Now, it’s closer to 20 percent, Dunn says. “We deal with race-related issues every day,” says James Hardiman, presi-dent of Cleveland’s NAACP branch. “Employment is the big-ticket item.”

No one expects a series of com-munity forums to solve all these problems, but leaders in the black community, as well as those who are

Hispanic or come from other groups, have welcomed the city’s eagerness to address them.

Cities that have healthy relations with their minority communities have found that they require an ongoing effort. Talking about race can’t be a one-off event. Instead, it’s a continuing dialogue that not only informs leaders at City Hall about minority group con-cerns, but allows the city to communi-cate the logic behind certain policies to

—Mike Chaney—the insurance commissioner for Republican-led Mississippi, where he’s having diffi culty setting up a state-based

health insurance exchange—referring to a confrontation with an opponent of the federal health-care law at a luncheon.

Source: The New York Times; Image: Shutterstock.com

the populations most directly affected by them.

“It has to be a very important feature of what you want your community to become,” says former Wichita, Kan., Mayor Bob Knight, who led discussions years ago about race in his city and nationwide as president of the National League of Cities. “It’s just a continual process. It takes more than words, it takes action.”

—AG

Cleveland hosted

the fi rst of a series

of forums on race

relations at City Hall

in late August.

GOV11_09.indd 10 10/12/12 3:06 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

11

WITH MORE CYCLISTS HITTING U.S. CITY STREETS, bicycle racks are proliferating. But the utilitarian racks need not be boring. Back in 2008, New York City commissioned David Byrne—yes, that David Byrne, the artist and founding member of the band Talking Heads—to design a series of racks for diff erent neighborhoods in Manhattan and Brooklyn. This year, Byrne created two more racks, located in front of the Brooklyn Academy of Music. The new racks, unveiled in August, spell out “pink crown” and “micro lip”—words chosen by Byrne just for their appearance. —Zach Patton

IMAGES: DINO PERRUCCI, NEW YORK CITY TRANSPORTATION DEPARTMENT

GOV11_09.indd 11 10/12/12 2:19 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


SO

UR

CE

S:

AS

SO

CIA

TE

D P

RE

SS

, P

OLIT

ICO

, P

EW

CE

NTE

R O

N T

HE

STA

TE

S,

CE

NS

US

OF G

OV

ER

NM

EN

TS

THE BREAKDOWN

25%

1.3years

>300k

The portion of their income that low-income smokers in New York spend on cigarettes, according to state data. New York has the nation’s highest cigarette taxes.

The number of people who voted in 2010 in part because

of Facebook’s efforts to encourage users to go to the

polls, according to a new study.

The average time South Dakota inmates released in 2009 had spent in prison, refl ecting the

shortest prison stay among 35 reporting states, according to a

recent Pew report.

6,968The number of local governments in Illinois—the most of any state.

8.7%

The portion of Chattanooga, Tenn.’s budget spent on employee health care, about half the average rate for a typical locality. Chattanooga lowered its health-care spending by setting up an onsite, government-sponsored clinic and phar-macy and providing financial incentives for workers to get or stay healthy. Source: Mayor Ron Littlefi eld, speaking at Governing’s Cost of Government conference

One thing computers are good at is counting. But New York state seems reluctant to rely on machines when it comes to election results.

New York was the last state to imple-ment the Help America Vote Act, the 2002 federal law passed to help avoid the kinds of vote-counting debacles seen in the 2000 presidential election. New York didn’t adapt to the new law until 2010, and even then it didn’t get things right—particularly in New York City.

The city’s Board of Elections found 200,000 uncounted votes a month after the 2010 general election; Mayor Michael Bloomberg called it “a royal screw-up.” This past June, the outcome of a con-gressional primary was uncertain for days due to a slow count and shifting results.

The problem in New York was human error. Most New York state jurisdictions download results onto secure fl ash drives that are taken to a central com-puter for counting. But in New York City, district poll workers wrote results by hand on tally sheets that were then delivered, as legally required, by police

offi cers to police precincts. There, they were added up again and then fi nally sent to elections databases.

This so-called cut-and-add process cre-ates plenty of opportunities for mistakes, says Alex Camarda of the advocacy group Citizens Union. His organization is pushing for changes in state law to help straighten out the process. In the meantime, he was pleased to see a state legal opinion mak-ing it clear police offi cers could carry away fl ash drives, rather than just tally sheets.

That helped reduce—but not elimi-nate—the number of detectable screw-ups in New York City during legislative primary voting in September. Poll work-ers were still doing their old cut-and-add routine as a backup. In many cases, their hand-tallied results were delivered and tabulated faster than the fl ash drives. Marrying an old system to a new one worked about as well as it usually does. “It was not until 2:51 a.m., almost six hours after the polls closed, that the board’s digital effort caught up to its manual one,” according to the New York Daily News. —AG

In Vote-Counting, Human Errors Still Creep In

CH

AT

TA

NO

OG

A M

AY

OR

’S O

FFIC

E

“Anyone who gets inside a car and finds out the car is driving [itself] will be

a little skittish, but they’ll get over it.”—California Gov. Jerry Brown, signing legislation that paves the way for his state to

approve driverless, automated vehicles. Source: Associated Press

GOV11_09.indd 12 10/12/12 2:20 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

To put our Corporate Trust expertise to work for you, call us today.

You have a partner that specializes in trust.Frustrated by a lack of support from their previous financial provider, and with taxpayer dollars on the line, the County of Solano wanted a partner they could rely on to tackle their complex bond issues. That’s when County Treasurer Charles Lomeli turned to the corporate trust experts at Union Bank.® We provided Charles with the personalized service of a relationship manager, backed by a skilled team of industry specialists that anticipates his needs and solves his problems. Having his compliance requirements met, plus receiving online reports, helped streamline Charles’ workflow, allowing him to focus on day-to-day issues. It’s what you’ll experience from a relationship built on trust.

Charles Lomeli TreasurerTax Collector and County Clerk County of Solano

©2012 Union Bank, N.A. All rights reserved.

unionbank.com

Carl Boyd Vice President 213-236-7150

Southern California Dean Levitt Vice President 415-705-5020

Northern California & Pacific Northwest

Julie B. Good Vice President 714-336-4230

Midwest & Western U.S.

Jenepher Lattibeaudiere Vice President 646-452-2014

U.S., Latin America & Asia

Nils Dahl Vice President 646-452-2115

U.S., Europe & Middle East


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


ATLANTA—Ross King, executive director of the Association County Commissioners of Georgia (ACCG), is doing something some think is a lost cause: trying to get students to consider a career—or at least a career stop—in public service. Through the newly created Civic Aff airs Founda-tion, ACCG is fostering civic awareness among high school students and provid-ing college students with internships in an eff ort to give them a deep understanding of the inner workings of county govern-ment. So far, the association has placed 188 interns in 50 Georgia counties.

“Only through the internship program are they able to sate the civic appetite they didn’t know they had,” says King. He explains that political science and public administration students tend to have some connection to the fi eld, usually informed by a parent or mentor who worked in public service. Interns from other disci-plines—ranging from nursing, psychology and sociology to mechanical engineering, urban studies and Web design—admit they didn’t know much about local government at fi rst. “As we attract from other disci-plines,” says King, “it is those students that are most likely to move into the govern-ment sector and stay engaged and involved because we have opened a door that in their minds hadn’t been opened before.”

But there’s a catch. “As they step into the workplace,” says King, “they tell us that local government positions are enticing and interesting, but not for a career.” Burdened by rising student debt in a still uncertain economy, “the students’ bottom line is to be gainfully employed.” King also says interns see government workplaces as more aus-tere than private-sector companies. The interns wonder, he says, whether govern-ment is the best place for them to make the biggest diff erence, particularly when

By Paul W. Taylor

Issuing the Clarion CallA program in Georgia is hoping to open young minds to a career in government.

King sees the same attitude prevalent among many of the association’s interns. He’s concerned we may be waiting in vain for the next great call to action. It has been a long time, after all, since President Ken-nedy’s inaugural call to “ask not what your country can do for you; ask what you can do for your country.”

“I don’t know how long we can wait for it,” says King, noting the yawning tal-ent gap in public service as more and more public servants retire. But for generations that are instinctively social and continu-ously connected with one another, he holds out hope that they will serve as each other’s Camelot.

“It may not take Kennedy’s or Reagan’s call. It may come from students talking to students, and peers talking to peers, say-ing, ‘it’s time for us to step up.’ I think if they are given a chance, they themselves might issue the clarion call.” G

Email [email protected]

foundations and NGOs seem to be able to move more quickly and eff ectively.

That gives ACCG interns a lot in com-mon with the 2,200 public employeessurveyed earlier this year by Governing and the Institute for the International Public Management Association for Human Resources. The fi ndings indicate that younger workers in government (34 years of age and younger) are more likely (47 percent) than their older colleagues (38 percent) to consider leaving their jobs if working conditions do not improve.

The study found that only 58 percent of all respondents reported being fully engaged. That group was three times likelier to report being very satisfi ed in their work and twice as likely to stay in their current job. Engaged employees were also 2.5 times likelier to feel they can “make a diff erence.” This is not the case for younger workers, who are less likely than the average employee to feel they can make a diff erence in the public sector.

DA

VID

KID

D

Politics+Policy | DISPATCH

“Students tell us that local government positions are enticing and interesting,

but not for a career,” says ACCG’s Ross King.

GOV11_14.indd 14 10/16/12 10:13 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

This advertisement is for informational purposes only. RBC Capital Markets is a registered trademark of Royal Bank of Canada. RBC Capital Markets is the global brand name for the capital markets business of Royal Bank of Canada and its affi liates, including RBC Capital Markets, LLC (member FINRA, NYSE and SIPC); RBC Dominion Securities Inc. (member IIROC and CIPF) and RBC Europe Limited (authorized and regulated by FSA). ® Registered trademark of Royal Bank of Canada. Used under license. © Copyright 2012. All rights reserved.

Corporate & Investment Banking | Sales & Trading | rbccm.com/municipalfi nance

Client Focus. It’s all in our approach.

For over 100 years, client focus has been essential to the RBC approach. It’s with this dedication that we have helped hundreds of municipal issuers achieve their objectives. RBC Capital Markets’ U.S. Municipal Finance Group offers highly-rated balance sheet solutions coupled with superior execution and a global distribution network. We have one of the largest U.S. Municipal Markets practices in the country, with over 345 banking, sales, trading & underwriting professionals in 31 cities. Our commitment to municipal fi nance has generated a long and successful history of serving the needs of our clients throughout the nation.

Take Confi dence in our Approach


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Hard ChoicesIt’s hard to know when campaigns begin or end. We do know we need big ideas.

By Peter A. Harkness

I’m writing this well before the national election, even before the fi nal presidential debate, the last hope for salvaging an intel-ligent conversation between the candidates about the central issue in this campaign—what role government should play in

our modern society. Sadly, we have missed the opportunity to address press-

ing, complicated and intertwined problems and their possible solutions. A national election is supposed to do that. Not sur-prisingly, the modern craftsmanship of electoral politics doesn’t allow for much substance—just platitudes, misleading accusa-tions, silly allusions to pop culture, clever TV ads, and strategic choices of venue and audience to attract ever thinner slices of the electorate based on gender, nationality, race, sexual pref-erence, age, education level, economic position and so on, all driven by mountains of money underwritten by people with very special interests.

The challenger in this contest should be winning, given the state of the economy. But ever the prag-matist, he positioned himself far to the right during the primaries. And despite eff orts to recast himself as a moderate, his robotic, awkward demeanor is not that of someone who can “elegantly” (to use his word) slide back to the middle. The incumbent, playing his “likability” advantage for all it’s worth, works the pep rally campaign stops, as well as the ultra-lite entertainment shows like “The View.” That way he doesn’t have to say too much, just be charming.

Elections and governance have become so inter-twined that it’s hard to know when campaigns begin or end. When Senate Minority Leader Mitch McCon-nell announced just after the last midterm elections that his top priority was to defeat the incumbent presi-dent, it set the tone for the next two years.

The question is, no matter who wins this desultory election, what can be done to address the nation’s most urgent problems? The idea that the federal government can be signifi cantly downsized falls, in my mind, into the “ain’t gonna happen” category. Any savings real-ized from an economic rebound will be off set by the silver tsunami of boomer retirements. It’s possible that a solution to the fi scal cliff of mass tax hikes and budget cuts we face at the end of the year might be patterned after a Simpson-Bowles-type plan for reforming both entitlements and the tax code. But I doubt it.

More likely, we will continue to muddle along, at least for a while, not only on taxes and spending, but also on what to do about K-12 and higher education, immigration, infrastruc-ture fi nancing, health care, regulation, even the melting arctic ice cap, and on and on. Revenues in most states—except Califor-nia, which is still in the muck—are slowly improving. But cities and counties, dependent on property taxes and mired in pension problems, have a long way to go to achieve whatever passes now as normalcy.

What is lacking are bold ideas about how we might change what we’ve been doing, both in terms of policy and management—ideas that transcend rigid ideologies. And that’s where state and local governments can make a real contribution if Washington will allow it, because they are far likelier to try new, unproven approaches—whether it be charter schools, lowering health-care costs, privatization, public-private partnerships or collaboration across jurisdictional lines.

Politics+Policy | POTOMAC CHRONICLE


TO

DD

SU

MLIN

Once the

election is

over, it’s

time to start

governing.

GOV11_16.indd 16 10/12/12 2:26 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


By Ryan Holeywell

Testing Federalism Should states decide gay marriage?

A pitched battle is being fought that could signal federalism’s future—and it

has nothing to do with health-care reform. Rather, states and the U.S. House of

Representatives are arguing the validity of a 1996 law that defi nes marriage as

exclusively between a man and a woman.

The latest fl ashpoint in the debate, currently being heard in a federal appeals

court, began with a 2010 lawsuit. New York resident Edith Schlain Windsor, who

owed the IRS more than $363,000 in estate taxes after her wife died, sued the

feds, arguing that she shouldn’t be subject to different tax laws than other married

couples just because her marriage was to a woman.

Historically, when a spouse dies, the estate tax isn’t triggered, and the sur-

vivor collects an inheritance tax-free. But while New York recognizes Windsor’s

same-sex marriage, the federal government does not, thanks to the Defense of

Marriage Act (DOMA). Because federal law doesn’t view same-sex marriages the

same way it views heterosexual marriages, the unlimited marital tax deduction

doesn’t apply to Windsor.

At issue, her attorneys argue, is that

the federal government should defer to

states when determining whether a cou-

ple is validly married.

In June, U.S. District Judge Barbara

Jones agreed with Windsor and ruled that

DOMA was unconstitutional. By sanction-

ing some states’ defi nition of marriage and

rejecting others, Jones wrote, the federal

government had launched “a sweeping

federal review” that “does not square

with our federalist system of government,

which places matters at the ‘core’ of the

domestic relations law exclusively within

the province of the states.”

Since February 2011, the Obama administration has refused to defend DOMA,

so a body within the U.S. House has taken up its defense and is appealing.

Democratic attorneys general in Vermont, New York and Connecticut, which

make up the Second Circuit where the case is on appeal, fi led an amicus brief this

fall in support of Windsor. They argue that DOMA serves little purpose other than

to stigmatize same-sex couples and “signifi cantly intrude on core state powers.”

Meanwhile, 14 Republican attorneys general fi led their own amicus brief

defending DOMA—an unusual stance for red state public offi cials who often

decry federal overreach into state matters. They argue that DOMA encourages

procreation. They also fear that if a court fi nds the law unconstitutional on equal

protection grounds, it could invalidate similar state-level statutes.

DOMA has been found unconstitutional in other federal cases, and most

Supreme Court observers think the High Court will probably rule on same-sex

marriage soon. It’s less clear how the court will take it up. Some speculate

that it may address same-sex marriage more directly and weigh in on chal-

lenges to California’s Proposition 8, the

2008 ballot initiative that bans same-

sex marriage.

|

Find out what thefeds are up to at governing.com/fedwatch

FEDWATCH

AP

IMA

GE

S.C

OM

It isn’t sexy and it has almost no politi-cal resonance, yet how government at all three levels works with one another is important if we’re to make a real eff ort at solving our problems. You would think that people in the executive and legislative branches in Washington would care about how the feds interrelated with states and locals. My own impression is that it hardly crosses their collective minds, aside from a few wonks.

Paul Posner is one of those wonks, and he is worried. He led the budget and public fi nance work of the U.S. Govern-ment Accountability Offi ce for 14 years before becoming director of the public administration school at George Mason University. Intergovernmental coopera-tion and consultation has been on the decline for some years, he says, even as “the actual interdependence of govern-ment has increased.” The ideological chasm so apparent in the nation’s capital “has worked to undermine the capacity” of the National Governors Association, the National League of Cities, and other state and local groups in Washington. “The inability of the state and local com-munity to strike deals with the Obama administration on health reform—deals that were successfully struck by the drug manufacturers and hospitals—refl ects the dilution of internal collaboration among governments,” Posner says.

That changed somewhat during the stimulus eff ort in 2009-2011. It was imper-ative for the feds to make sure state and local leaders fully cooperated with and bought into what Washington was trying to do—kick-start the economy. I believe the overall eff ort was an inexact success both in its goal to avoid catastrophe and to forge a healthier relationship between Washington and sub-governments.

From past national campaigns we recall images that are notably absent in this current contest. Imagine Bill Clin-ton’s man “from a place called Hope” or Ronald Reagan’s “Morning in America” in the current context.

It almost seems quaint. G


The federal

government

doesn’t

recognize

same-sex

marriages.

GOV11_16.indd 17 10/16/12 10:16 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

By David Levine

Rx for Prescription Drug AbuseTechnology could lend a hand in stemming addictions to opioids.

Politics+Policy | HEALTH

IMA

GE

: S

HU

TTE

RS

TO

CK

.CO

M;

SO

UR

CE

: A

UTO

MA

TIO

N O

F R

EP

OR

TS

AN

D C

ON

SO

LID

AT

ED

OR

DE

RS

SY

ST

EM

OF T

HE

DR

UG

EN

FO

RC

EM

EN

T A

DM

INIS

TR

AT

ION

, 20

10


The war on drugs is being fought on many fronts—includ-ing the bathroom medicine cabinet. In fact, that’s where the heaviest action is, because prescription drug abuse is the fastest-growing drug problem in the United States.

The National Survey on Drug Use and Health has found that nearly one-third of people ages 12 and over who used drugs for the fi rst time in 2009 began with prescription drugs. And more overdose deaths have involved prescription opioids than heroin and cocaine combined since 2003, according to the Centers for Disease Control and Prevention (CDC). In 2007, approximately 27,000 unintentional drug overdose deaths occurred in the U.S. For every such death, nine more people are admitted for sub-stance abuse treatment.

The problem is most troubling among the military, where illicit prescription drug use increased from 5 to 12 percent among active duty service members over a three-year period from 2005 to 2008.

Abuse is also rampant among the young. One reason is the sheer number of addictive pills out there. Opioid prescriptions have jumped 48 percent between 2000 and 2009. The other is weak prescription drug monitoring programs (PDMP). Nearly every state has one, but most are not up to the task of tracking the epidemic. A big issue is technology. To that end, the federal gov-ernment has set up pilot programs in Indiana and Ohio to improve real-time access to PDMP information for health-care providers. The Offi ce of the National Coordinator for Health Information Technology (ONC) is managing the overall project in conjunction

with the Substance Abuse and Mental Health Services Adminis-tration, CDC and Offi ce of National Drug Control Policy.

Though PDMPs track potential abusers, doctors simply haven’t yet learned how best to utilize the information. “Forty-nine states have monitoring programs in place, but most of their providers and pharmacies are not accessing them regularly because it doesn’t fi t in with their workfl ow,” says Kate Tipping, a policy analyst with the ONC. “We wanted to explore ways we could help get that information to providers in real time and see if it can be used to determine if a controlled substance should be prescribed.”

In Indiana, the ONC chose a health system with electronic health records (EHR) in place. Whenever a patient is admitted to, discharged or transferred from the emergency room, that order will trigger the Indiana Scheduled Prescription Electronic Col-lection and Tracking program (INSPECT) to upload information about the patient’s drug history to the EHR. “We’re working to demonstrate a deep technical integration with INSPECT,” says Tipping. “If we are successful there, other hospitals can connect with the health information exchange (HIE), and other HIEs can connect with INSPECT to add PDMP access to their capabilities.”

Ohio’s project is similar, but it is focusing on integrating a smaller, family practice-based EHR system with the Ohio Auto-mated Rx Reporting System. Patients are given a numeric score using a software program that indicates their risk of abuse. If the score is over a certain threshold, the provider receives an alert on that patient’s EHR. If the pilot proves successful, practices without an EHR will still be able to access the data through a Web interface.

“We’re not building anything new, just connecting existing systems,” Tipping says. “This makes it easier for others to dupli-cate what we have done.” The pilots ended in September, and data

is being analyzed to see if the information fl owed as planned and if the number of abuse reports decreased. “Mainly, we want to see if this information is getting to providers in real time,” Tipping says. “The overall goal of all our pilot tests is to give

health-care providers the data that they need to make the best prescribing decisions that they can.” G


Kilograms of prescriptionpainkillers sold per 10,000 people

3.7-5.9

6.0-7.27.3-8.48.5-12.6

Tracking Opioid Sales State by State, 2010

D.C.

GOV11_18.indd 18 10/12/12 2:28 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

In this school, employee protection gets straight A’s.

“Being able to offer Aflac – at no cost to us – while

giving our staff peace of mind and confidence

really makes a difference. It’s a no-brainer.”

“We are very much a family and providing Aflac

to our staff shows they’re valued, appreciated and

cared for. It means a lot to us.”

Milton Gonzalez Principal McAllen, Texas

Hear the rest of Milton’s story at aflac.com/milton

Individual coverage underwritten and offered by American Family Life Assurance Company of Columbus. In New York, individual coverage underwritten and offered by American Family Life Assurance Company of New York. Some policies may be available as group policies. Group coverage underwritten and offered by Continental American Insurance Company. Policies may not be available in all states. Aflac pays cash benefits directly to the insured, unless assigned. There may be indirect administrative or other costs to the employer. Individual’s travel expenses for securing this testimonial were paid by Aflac.NAD1215


Editorial Prepress

Other OK to go

100 Blue Ravine RoadFolsom, CA 95630

916-932-1300

PAGE

By Elizabeth Daigneau

The Grid Gets Smaller—and SmarterMicrogrid technology faces its fi rst big test.

On the afternoon of June 29, a severe thunderstorm tore across the Midwest and Mid-Atlantic. By day’s end, the intense storm, called a “derecho,” had left 22 people dead and millions without power (some for as

long as a week) in six states and the District of Columbia. The power outages left customers fuming. But more frustrat-

ing was a sense that blackouts were becoming normal. In 2011, more than 3,000 outages in the U.S. aff ected 41.8 million people, according to the Eaton Corp., which tracks blackouts. That’s up from 2,169 power outages that aff ected 25 million people in 2008.

Volatile weather is largely to blame for the increase in outages. But the underlying issue is an aging energy grid that, according to a 2005 report by the U.S. Navy’s Inspector General, is “stressed by relentlessly increasing demand, operating at near capacity with decreasing staff s and reliant on electronic components.”

Last year, after two storms left nearly 1 million Connecticut businesses and home-owners without power, Gov. Dannel Malloy had had enough. He formed a panel to look for ways to avoid future outages. The group came back with the usual suggestions, like burying power lines. But their report also included another less familiar idea: microgrids.

A microgrid is essentially a small electric grid with its own generation source, such as fuel cells, wind, solar or other energy sources. It’s usually linked to a main electric grid, but “its dis-tinguishing feature is that it if a utility shuts down, a microgrid can disconnect itself and operate in ‘island mode,’” says Peter Asmus, a microgrid expert and senior research analyst at Boul-der, Colo.-based Pike Research. In other words, a microgrid can provide power to college campuses, neighborhoods, industrial facilities and military bases, while retaining the ability to operate independently if the main grid loses power.

In June, the Connecticut General Assembly created a microgrid pilot program, making it the fi rst state to have an explicit policy on microgrids. The Department of Energy and Environmental Protection (DEEP) was given $20 million to test the idea with a handful of municipalities, which will be selected by the end of the year, with several microgrids operating by mid-2013. The idea is not only to strategically place microgrids near critical facilities, such as hospitals, police and fi re stations, and water systems, but also near town centers and commercial hubs.

That way, if the power goes out, grocery stores, gas stations and pharmacies will remain open too.

Connecticut’s microgrid pilot will be the technology’s fi rst real case study. There are certainly other microgrids operating in the U.S.—for example, the Santa Rita Jail in Dublin, Calif., runs on one; the University of California at San Diego has a microgrid that operates on a mixture of renewable and traditional energy sources; and the U.S. Department of Energy is currently spending $55 million to support eight microgrid projects. Still, there are no

regulations governing the technology, according to Asmus. So it will be up to Connecticut to develop technical, operational and safety standards. The state also must fi gure out funding. For now, Connecticut’s plan is that the cost will be borne by all ratepayers, including the businesses tied into the system.

There are about 270 microgrids worldwide, according to Pike Research. And because “we have a much higher rate of power outages [than other countries], we are the leading market for microgrids,” says Asmus. (That market will generate more than $3 billion in annual revenue by 2015, say commercial research fi rms.) But there are green benefi ts as well: Because they generally rely on cleaner energy sources, microgrids are more environmentally friendly than big power grids. And since they’re located near the point of demand, the electricity doesn’t have to travel as far, so less power is lost in transmission and distribution. G


Politics+Policy | GREEN GOVERNMENT


The Santa Rita Jail’s microgrid gets some of its energy from solar panels.

CH

RIS

MA

RN

AY

/BE

RK

ELE

Y L

AB

GOV11_20.indd 20 10/16/12 10:18 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Leadership.

Celebrating courageous public service.

Working alongside state and local government

officials every day, we see first-hand the

dedication, determination, courage and

commitment of the men and women who

respond to the call for public service. We’re

proud to help bring the extraordinary

contributions of just a handful to the forefront.

Congratulations to Governing’s 2012 Public

Officials of the Year.

ch2mhill.com | 1.888.CH2M.HILL

VISIT US IN BOOTH 623 AT THE CONGRESS OF CITIES

© 2012 CH2M HILL

Learn more about whatwe’ll be doing at theCongress of Cities.

Scan this QR code with your smartphone or visit bit.ly/N93V4I to visitour Congress of Cities page.


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

22

The Enticement WindowMillions of millennials will soon be putting down roots. Are cities ready?

By William Fulton

Politics+Policy | ECONOMIC ENGINES

New downtown lofts in

Omaha, Neb., were built

to attract millennials and

get them to stay.

concentration of universities in the coun-try, lots of cool neighborhoods and a big chunk of the innovation economy.

The problem, Massachusetts economic development folks say, is that metro Bos-ton is so expensive they can’t keep the kids, especially after those kids begin to have their own kids. Yes, they can live in tiny city apartments, or maybe in a pleas-ant older suburb like Newton—if they can aff ord it. After that, they are living some-where beyond Interstate 495 and the reach of most commuter rail lines. What Boston needs, the experts say, is more starter homes in interesting, transit-rich locations.

Don’t we all. If Boston can’t stop the brain drain, is there any hope for the rest of us? Yes, but it requires a concentrated eff ort to create compelling places to live and work—and fast. Because of the demo-graphics of young talent, the cities and

suburbs on the downward cycle have a limited window to turn things around: ten years at most, and maybe no more than fi ve.

Here are the facts most people know: For the foreseeable future, the so-called millennials (currently ages 18-30) will drive both the housing market and the fast-growing innovation economy. It’s a huge cohort of about 70 million people. And as I mentioned above, they are gravi-tating toward a select group of metros and small cities.

But there are a couple of other facts that we don’t usually think about. Most people settle down by age 35, and usu-ally don’t move from one metro area to another after that. And the demo-graphic group behind the millennials is a lot smaller. Just like baby boomers, the preferences of the millennials will drive our society for two generations. They’re making location decisions based on their idea of quality of life. And they’re going to make all those decisions in the next few years—by the time they’re 35.

So if you’re not one of the hip places today, you have only a few years—the length of one real estate cycle and the time horizon for planning an infrastructure project—to become hip enough to keep your kids and attract others.

This might seem like a daunting, if not insurmountable, challenge, but frankly I’m encouraged by what I see. Over the last six months I’ve been to many sec-ond-tier cities—Omaha, Neb.; Oklahoma

Iknew the “brain drain” problem had reached a crisis point when they started talking about it in Boston.

You know the story: Kids move to where they want to live and then look for a job, not the other way around. They’re drawn to a small number of hip metro areas (D.C., San Francisco, Seattle) and smaller cities (Boulder, Colo.; Missoula, Mont.; Palo Alto, Calif.) around the country and hip employers follow them. The result is an upward cycle of talent and jobs and business growth in the fashionable places, and a downward cycle everywhere else.

It’s not unusual to hear people com-plain about this problem in Middle Amer-ica, or in second-tier cities without a big university, or in populous but aging subur-ban locations such as Long Island, N.Y. But it’s not a common thing to hear about in a place like Boston, which has the greatest F

LIC

KR

/TY

NIG

H


GOV11_22.indd 22 10/12/12 2:35 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

November 2012 | GOVERNING

| URBAN NOTEBOOK

23

City; Richmond, Va.; Syracuse, Buff alo and Rochester, N.Y.; and Manchester, N.H., among them—that would not to be good candidates for a hip urban core. Yet they’re all developing one.

Nebraska’s conservative Republi-can governor, Dave Heineman, took the opportunity of hosting a National Gover-nors Association event in Omaha to show off downtown lofts and restaurants. In Oklahoma City, Republican Mayor Mick Cornett, who lives a block from City Hall, has championed urban reinvestment—one of his latest projects is a streetcar line. In Manchester, the old mills bordering down-town are being refurbished. In Syracuse, where the urban core is adjacent to a prom-inent research university, several hundred housing units have been created in historic buildings, attracting many new downtown residents, including my onetime room-mate, who moved back downtown after 20 years of living in a ritzy, cutesy suburb.

The lesson for me is that even though the window is short, there’s still time for sec-ond-tier cities and older suburbs to create the compelling places that will be required to succeed in the 21st-century economy. Most people—even millennials—want to live near their families and near where they grew up, meaning that if you can create interesting places, they’re likelier to stay. And you don’t need the endless hip urban fabric of New York or D.C. to compete. You just need a few great neighborhoods for people to live and work in. For most cities, that’s an achievable goal.

In his recent book, The New Geography of Jobs, economist Enrico Moretti of the University of California, Berkeley, noted that the current pattern of winners and losers is good for the national economy even if it’s bad for most cities, because the innovation economy thrives on agglomer-ation. That’s probably true, at least in the short run. But in the long run, it’s surely better to have more compelling places—large and small—that can attract their share of young talent and economic buzz. America’s prosperity will be more endur-ing as a result. G


The New Urbanist CasinoDowntown gaming isn’t just about taxes and jobs.

If you’re a city mayor, and a developer comes to you with a proposal to attract 15,000 money-spending visitors every day, you would give the idea some serious consideration, right? That’s the type of pitch a growing number of urban mayors are hearing from casino developers eying the latest market for gaming: downtowns.

For years, developers have put casinos and slot parlors primarily in suburban and exurban locations, where they are close to highways, there’s plenty of room to build large, single-fl oor gaming rooms, and there’s lots of inexpensive parking. But recently, some casino developers have begun moving locations closer to cit-ies and their downtowns.

Unlike traditional casinos, these urban versions are diff erent in several ways. They tend to be built in existing buildings rather than as stand-alone structures. They are porous, meaning the casino has many exits that allow customers to leave, walk the streets, shop and then return for more gam-bling. Developers even intentionally under-develop the space so as to encourage other businesses to set up shop nearby and share the wealth.

Detroit’s Greektown and Pitts-burgh’s Rivers casinos both have some of these new features. Last May, Cleveland’s Horseshoe Casino opened downtown in what was once the landmark Higbee’s department store (best known for its starring role in the 1983 holiday fi lm, A Christmas Story), bringing modern gaming and a $350 million investment to Cleveland’s urban core. In the fi rst month of operation, nearly a half million people headed to the Horse-shoe; annual attendance is forecast to reach 5 million.

Urban casinos are diff erent because they can bring excitement and amenities to cities, according to Andrew Klebanow, the principal at Gaming Market Advisors. “The thinking now is that casinos can do more than just bring jobs and new taxes, they can actually help communities,” he says.

But urban casinos are not a slam dunk. They tend to be more expensive to build: Blame the high cost of parking and security, says Klebanow. Put-ting a casino on multiple floors of a reused building means more workers are needed, which raises operational costs. And then there’s the issue of placing gambling so close to low-income neighborhoods—a major point of contention for casino opponents.

Still, the challenges and drawbacks have not stopped casino developers and cit-ies from actively courting one another. Baltimore, Chicago, Cincinnati, Columbus, Milwaukee and a host of other cities have expressed interest or have plans under way to place casinos in downtown locations. For cash-strapped and job-starved cities, it’s game on. G


FLIC

KR

/CH

RIS

TO

PH

ER

CA

PE

LL

Cleveland’s

Horseshoe

Casino

By Tod Newcombe

GOV11_22.indd 23 10/12/12 2:36 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

December 11, 2012 | Atlanta Botanical Garden

www.governing.com/events

Healthy LivingATTEND OR SPONSOR, PLEASE CONTACT

Susan Shinneman

VP of GOVERNING Events

[email protected]

916.932.1337

LEARN how to

healthy living programs and strategies in your communities.CONNECT, DESIGN, & IMPLEMENT


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

When there’s something in your house that’s broken, you call in a repairman to fi x it. The same is true in government. And while states and localities may not necessarily be broken, the past few years have left many of them in serious need of repair. The Great Recession and its long, unsure recovery have meant historic

revenue declines for governments at the same time they’re facing mounting fi scal pressures from things like Medicaid, pension obligations and other public assistance programs.

Governments need fi xers, and this year’s eight Public Offi cials of the Year are some of the best handymen and repairwomen in public service. They’ve closed massive budget gaps by fi nding new sources of revenue and making sure government dollars are spent in the best, most responsible way possible. They’re mending broken agencies, ensuring that government services reach the people who need them most. They’re implementing new technologies to make government faster, more effi cient and more responsive than ever. (Sometimes the repairs are more literal: One city manager has led a massive rebuilding eff ort after a devastating tornado decimated his town.)

The best fi xers know how to work together to get the job done. These honorees have shown a true commitment to cooperation, often reaching across the aisle to tackle problems. A Republican governor forged a fi scal compromise with his Democratic legislature. A county executive worked with a city mayor to merge services and drive down costs. Two state representatives of opposite parties in a tied state House opted to share the speakership, an unprecedented decision to join together in the task at hand.

What’s broken can be fi xed, and it can be made better than it was before. But it takes the kind of tireless work and dedicated leadership shown by these eight honorees. When they saw government in need of repair, they rolled up their sleeves and got to work.

2012PUBLICOFFICIALS

YEARhen there’s something in your house that’sfi x it. The same is true in government. Andnecessarily be broken, the past few years hof repair. The Great Recession and its long

revenue declines for governments at the same time they’rethings like Medicaid pension obligations and other public

of the


governing.com/poy

GOV11_25.indd 25 10/12/12 1:54 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


GOV11_25.indd 26 10/12/12 1:55 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


E L A I N E M. H O W L EAuditor, State of California

Good work is often rewarded with more work. Take California State Auditor Elaine Howle. For 12 years and through three governors and six legislative sessions, Howle has worked tirelessly to root out

wasteful spending and failing programs, and to fi nd ways to make government run better. Her wins have resulted in greater responsibilities and an enhanced role in her state. At a time when many departments in California are facing major cuts—along with many state auditors’ offi ces around the country—Howle’s offi ce is growing.

Not a lot of auditors are involved in electoral redistricting. But when election-reform advocates pushed through a 2008 ballot initiative to create an objective, apolitical method of redistricting, they knew they wanted Howle for the job. (The ballot actually referred to Howle’s offi ce by name.) She was charged with recruiting, screening and assembling the group of citizens who would serve on the board tasked with creating new districts.

Howle embraced the historic responsibility, says Kathay Feng, executive director of California Common Cause and architect of the ballot initiative. “They were very diligent and thorough about this whole process,” says Feng of Howle’s offi ce. “It ended up being the thing that increased people’s confi dence in the commission.”

Like any good auditor, Howle has come up with plenty of ideas for saving money in a state facing a $16 billion defi cit. Her audits have raised questions about the solvency of high-speed rail and state custody of juvenile off enders. This year she was given broader authority in an unusual role for a state auditor, to start looking into the fi nances of local governments—an important responsibility in a state where three communities declared bankruptcy this summer alone. The hope is that Howle will be able to spot problems before they grow into full-blown scandals.

Regard for Howle is so high that last fi scal year, the state Legislature increased her $17 million annual budget by about $8 million. The funding will allow her to hire more than 50 new auditors who can proactively investigate high-risk areas, such as the state’s teacher credentialing program. Howle’s offi ce made headlines last year when it produced an audit outlining serious lapses by the California Commission on Teacher Credentialing, which had a backlog of 12,600 unprocessed reports of arrests and prosecutions of state educators. That lengthy list potentially allowed questionable teachers to remain credentialed—and working with students—for years. Today, the commission is implementing all of Howle’s recommendations, she says. “The part that’s satisfying and rewarding is that people are taking the issue seriously.” —Ryan Holeywell

The Watchdog

RO

BE

RT D

UR

ELL

P U B L I C O F F I C I A L S O F T H E Y E A R | 2 0 1 2

GOV11_25.indd 27 10/12/12 1:56 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


J O E T T E K A T ZCommissioner, Connecticut Department of Children and Families

It’s probably the toughest job in government, with one of the highest burnout rates. That alone would make Katz’s decision to leave her job as a Connecticut Supreme Court Justice to

become commissioner of the Department of Children and Families remarkable. But it is her record of accomplishments since taking the job in 2011 that’s most impressive.

When Katz started, the department had already been operating under a federal consent decree that was put in place in 1991. To get it lifted, her overall approach has been to focus on clinically proven strategies for helping children and families, which has been a “welcome and noteworthy development,” says Jamey Bell, executive director of Connecticut Voices for Children. “She pays attention to the years of accumulated data and then tries to shape policy based on those parameters.”

In that regard, one of her signal achievements has been to get Connecticut kids out of clinically questionable congregate care settings (group homes) and back into less restrictive settings. In four years, she’s cut the number of kids in institutional care by more than 70 percent. “We’ve monitored the ones who we removed and they’re doing fi ne,” says Katz.

Getting out from under the consent decree has dovetailed nicely with all the work that Katz wants to do. The state is now in full compliance with one-third of the goals outlined in the decree and another third are in sight.

In particular, she sees an improved relationship with the federal monitor as a signature achievement for the agency. “For the longest time the monitor was viewed as the enemy,” says Katz. “But you don’t shoot the messenger; we were fl unking the test. So now we’re working closely with him and making progress.”

Bell says it is that ability to reach out to other interests that has been an especially refreshing hallmark of Katz’s tenure. “She elicits outside input from people in the fi eld—providers, advocates and, most signifi cantly, families of impacted children. She has shifted the focus from, ‘You’re a bad parent and we have to take your kids away,’ to ‘What can we do to support you in a way that we can help you keep this family together?’” —Jonathan Walters

The AdvocateP U B L I C O F F I C I A L S O F T H E Y E A R | 2 0 1 2

DA

VID

KID

D

GOV11_25.indd 28 10/12/12 1:57 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


GOV11_25.indd 29 10/12/12 2:00 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


GOV11_25.indd 30 10/12/12 2:04 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


B R I A N S A N D O V A LGovernor, State of Nevada

When Brian Sandoval won the Nevada governor’s race in November 2010, his state was in shambles. It had the nation’s highest unemployment rate, a crushed housing market and a looming $3 billion budget defi cit.

Public faith in the state’s government was at an all-time low. Sandoval’s predecessor, Jim Gibbons, had served a controversial and tumultuous term that saw his approval rating dip as low as 10 percent.

So, after leaving a lifetime appointment as a federal judge to return to the perils of elected offi ce (he was a state legislator from 1994 to 1998), Sandoval went to work. And in an era of hyper-partisanship, the Republican governor forged a compromise to close the state’s massive budget hole with a Democratic Legislature. He relented on a campaign pledge not to raise taxes and agreed to extend sunsetting taxes on mining companies, a $620 million boon to state coff ers. In return, Democratic leaders signed off on spending cuts, as well as education reforms that were on the governor’s to-do list: reforming teacher tenure and instituting performance pay for teachers.

“We may not have agreed all the time, but we had a very good relationship. So when it came down to crunch time, we were able to get things done,” Sandoval says. “I think it’s really important to listen to everyone and to see what their goals are. I think it paid dividends in the end.”

Indeed, the atmosphere in Carson City is noticeably diff erent. Upon taking offi ce 22 months ago, Sandoval went out of his way to personally meet with all 63 legislators so he could learn about their priorities for the state. The previous administration had developed a reputation for being uninterested, even lazy. “He’s been much more engaged in the process, and that makes a diff erence if you’re going to work together,” says state Sen. Mo Denis, the Democratic caucus leader. “We’re able to sit down and talk, even though we don’t always agree. That’s an important part of trying to fi gure out solutions.”

In February, on the back of the previous year’s bipartisan legislation, the governor introduced a two-year economic development plan that pledges to create 50,000 new jobs by 2014 and diversify the state’s economy. The plan has already enticed Apple to the state, which plans to build a $400 million data center near Reno. The company also pledged to invest another $1 billion in Nevada over the next decade.

From July 2011 to July 2012, the state had the biggest drop in unemployment among the 50 states. New home sales are up, and housing prices are slowly recovering. The latest poll numbers place Sandoval’s approval rating above 60 percent, one of the highest marks in the nation.

“You often see this in swing states with mixed government. People have to make compromises to move forward,” says University of Nevada, Las Vegas political science professor David Damore. “He has that personal touch. He’s optimistic. For Nevada, that’s a major change.”

—Dylan Scott

The Helmsman

RO

BE

RT D

UR

ELL


GOV11_25.indd 31 10/12/12 2:08 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


GOV11_25.indd 32 10/12/12 2:12 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

J O H N E . N I X O NDirector, Michigan Department of Technology, Management & Budget

When Utah Budget Director John Nixon was approached about joining the administration of newly elected Michigan Gov. Rick Snyder, he thought the idea was “a little bit crazy.”

Nixon certainly wasn’t looking for a new job—least of all one in Michigan. His boss, Utah Gov. Gary Herbert, had just won re-election and Nixon was settling his family into a beautiful new house outside of Salt Lake City. Two years earlier, the Pew Center on the States had named Utah the best managed state in the nation.

Michigan, on the other hand, was a mess. The American auto industry had nearly collapsed in 2009, and the state’s Rust-Belt economy was locked in a decade-long struggle to replace disappearing manufacturing jobs. The state was facing a $1.5 billion budget defi cit.

Ultimately, though, taking part in a massive turnaround eff ort became too appealing to pass up. The kicker was that Nixon would head Michigan’s Department of Technology, Management and Budget, a super-agency that oversees all of the state’s fi nancial, technology and administrative functions. “This really put the weight of the budget offi ce behind administrative functions like technology to streamline government going forward,” Nixon says.

After just six weeks on the job, Nixon had rebalanced the state budget and helped Snyder fashion a sweeping tax-reform package that became law. But Nixon didn’t just cut. He launched a $2.5 million grant program to fund small but innovative IT projects. He also created a $5 million fund to promote shared services for local governments. “The concept was, ‘Let’s fi nd money to make strategic investments in areas that are going to make us more competitive, more effi cient and more eff ective,’” Nixon says.

With the state on fi rmer fi nancial ground for 2013, Nixon locked $47 million into the base budget over the next fi ve years to replace creaky state computer systems, including Michigan’s 30-year-old tax system and “archaic” fi nancial applications. He also built an unusually productive partnership with state CIO David Behen, who spearheads Michigan’s new IT plan. Too often, Nixon says, budget directors and CIOs talk past one another. In Michigan, they’re fi rmly on the same page.

“I support technology as budget director because I know we’re never going to keep up with demands on state services without a strong IT infrastructure,” he says. “If we’re successful at this, we’ll be able to make further investments.”

—Steve Towns

The Tech-Savvy CFO

DA

VID

KID

D



GOV11_25.indd 33 10/16/12 10:21 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


M A R K R O H RCity Manager, Joplin, Mo.

Early Sunday evening, May 22, 2011, Mark Rohr was getting ready to watch the Cubs game on TV when he got a phone call that would change his life. The city of Joplin, Mo., where Rohr lives and has served as city manager

since 2004, had just been hit by a catastrophic tornado that ripped through the center of town. Minutes later, Rohr was running down Main Street—felled trees and building debris made driving impossible—to meet up with the city fi re chief. “He was standing in what used to be a Chinese restaurant,” Rohr says. “The fi rst thing I saw was a minivan in the entryway, with the windshield and all the windows blown out, and two deceased citizens in the front seat. I realized right then and there that this was serious.” He allowed himself a moment of emotion, but he knew he had to take charge.

Overall, the tornado wiped out one-third of the city, killing 158 people. More than 7,500 homes were rendered uninhabitable; 540 businesses were impacted. It was one of the deadliest tornadoes on record, and, with estimated damages of more than $3 billion, the costliest single tornado in U.S. history. The city was strewn with a staggering 3 million cubic yards of rubble and debris.

But the story of Joplin—and the story of Rohr—isn’t about the tornado. It’s about everything after. Starting the very night of the storm, Rohr led one of the biggest disaster recovery eff orts in memory—and by all accounts one of the smoothest and most effi cient. Rohr coordinated the state, local and federal response, along with private and nonprofi t partners, and he immediately became the public face of the city’s recovery, communicating constantly with citizens. “He never disengaged,” says Jerry Ostendorf, the FEMA section chief who oversaw the federal response eff ort. “He was there whenever you needed him. Local and state offi cials from around the country need to learn from how Mark managed the disaster.”

An Ohio native, Rohr began his public service career early: He was managing a city by age 27. Colleagues describe him as laser focused, strategic and straightforward. Succinct and to-the-point, he’s known to send one- and two-word emails. He’s a good listener, but “he’s not afraid to tell you how it’s going to be done,” says Mike Woolston, a city councilman who was serving as mayor when the storm hit.

Today, 85 percent of the aff ected businesses have been rebuilt, and 76 percent of the destroyed homes have been repaired or issued permits for repair, according to Rohr. The entire recovery has progressed without infi ghting, backbiting or miscommunication, and that’s a testament to Rohr’s leadership, says Woolston. “Mark’s role in this whole process has been huge, and I don’t think most people here will recognize that until we’re several years down the road.”

—Zach Patton

The Builder

DA

VID

KID

D


GOV11_25.indd 34 10/12/12 2:20 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


GOV11_25.indd 35 10/12/12 2:24 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


GOV11_25.indd 36 10/12/12 2:28 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


B R U C E H A N N AA R N I E R O B L A NCo-Speakers, Oregon House of Representatives

Competitive elections these days are hard-fought aff airs—nasty, brutish and staggeringly expensive.The focus is on winning and winning alone. That was certainly the goal of both Oregon’s Demo-

cratic and Republican parties entering the 2010 election cycle. When the votes were tallied on Election Day, however, both parties were in for a surprise. For the fi rst time in Oregon’s history, each party won the same number of seats. The House of Representatives was evenly divided—30 Democrats, 30 Republicans.

When something like this happens, party leaders usually solve the problem by going after a defector or convincing someone to switch caucuses in order to secure power. But in Oregon, Democratic leader Arnie Roblan and Republican leader Bruce Hanna took a diff erent approach and chose to serve as co-speakers.

Ask political scientists and they’ll say co-governance rarely works. In the case of Roblan and Hanna, they were hardly close allies to start. Rather, they virtually epitomized the divi-sions between the two parties. Roblan, age 64, had spent his entire career in the public sector, working fi rst as a teacher and then as a principal before retiring in 2004 and running successfully for a seat in the Legislature. Hanna, age 52, is an entrepreneur and currently the owner of a Coca-Cola bottling company and a vending service company. Nevertheless, the two leaders negotiated a clear set of rules that would govern House operations. They also made a commitment to sit down together to solve problems—and to stay seated until both sides had a solution they could agree on.

The beginning, says Hanna, was “tough.” But the two legislative sessions presided over by co-speakers Roblan and Hanna rank as among the most productive in Oregon’s history, with balanced budgets, a sweeping health reform overhaul, state and congressional redistricting, and a successful school reform package. As the two leaders prepare once again for Election Day (with Roblan as a candidate for the state Senate this time), both promise to carry the experience of the past two years into the future.

“[W]hen you don’t give a credible voice to the minority, it creates real animosity,” says Roblan. “There are always oppor-tunities, even in the majority, to seek out and try to listen care-fully to what they are really wanting.”

“People now expect us to move forward,” says Hanna. Before the 2010 election, working together was a surprise. “Now, it’s an expectation.” —John Buntin

The Odd CoupleP U B L I C O F F I C I A L S O F T H E Y E A R | 2 0 1 2

LE

AH

NA

SH

GOV11_25.indd 37 10/12/12 2:31 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


T O N I P R E C K W I N K L EBoard President, Cook County, Ill.

Running a city or county in these tough economic times is not an easy task. Just ask Cook County, Ill., Board President Toni Preckwinkle. Her fi rst days on the job in December 2010 came

with a big surprise: a previously undisclosed $487 million budget defi cit. But Preckwinkle has never been one to back down from a challenge. By fi nding new revenue sources and cutting agency budgets by an average of 16 percent, she closed that budget gap in a matter of days, and then set out to fi x the chronically cash-strapped county for good.

Preckwinkle, who started her career as a history teacher, closed that defi cit while making good on a campaign promise to roll back a widely unpopular sales tax hike implemented by her predecessor. That reduced the burden for residents previously saddled with the highest combined sales tax rate of any major U.S. city.

Using a performance management system, Preckwinkle also spearheaded eff orts to cut costs and rein in ineffi ciencies. The initiative has paid off , with county residents receiving property assessment bills early for the fi rst time since 1978. “In just one year on the job, Cook County Board President Toni Preckwinkle has made county government practically unrecognizable,” a Chicago Sun-Times editorial gushed.

Preckwinkle is known for being outspoken, but her 19 years as a city alderman taught her that a good leader must bring everybody to the table. So before Chicago Mayor Rahm Emanuel took offi ce last year, Preckwinkle met with him. The two agreed it didn’t make sense to share a space—both governments are housed in the same downtown Chicago building—and not work together. They have since merged workforce training, revenue collection and purchasing operations, collectively saving $33 million in the fi rst year.

Today, Cook County is clearly on a good path, and that’s largely thanks to Preckwinkle. Dick Simpson, a former city alderman and political science professor at the University of Illinois at Chicago, says that’s possible because Preckwinkle has brought Cook County’s antiquated—and at times corrupt—government into the 21st century. “Parts of it had a history of being fairly dysfunctional,” he says. “It hadn’t been modernized in any meaningful way.”

Preckwinkle is modest about her progress. Almost two years after taking over the nation’s second most populous county, she says there’s still a lot to do. “We’ve made a good start, but have a long way to go,” she says. “I don’t feel like my job is done, in any respect.” —Mike Maciag

The Turnaround Artist

DA

VID

KID

D


GOV11_25.indd 38 10/16/12 1:57 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


t

GOV11_25.indd 39 10/16/12 1:57 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


GOV11_40.indd 40 10/12/12 2:39 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


FORTY YEARS AGO, Montana lost the coal race. In the 1970s, the state competed with its neighbor Wyoming to take advantage of a boom in demand in the eastern and southern United States. Wyoming emerged the clear winner: It was better positioned to ship its coal eastward, and political turmoil stifl ed production in Montana. Today, Wyoming exports 10 times more coal than Montana, even though Montana is home to the biggest coal reserve in the country.

WHAT HAPPENS WHEN THE U.S. BECOMES AN ENERGY EXPORTING NATION?

B Y D Y L A N S C O T T

©Z

AC

K S

EC

KLE

R/C

OR

BIS

GOV11_40.indd 41 10/12/12 2:41 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

But another boom is on the way, thanks to soaring demand in China, India and other parts of Asia. On the whole, the Asian-Pacifi c market is expected to increase global energy demand by 40 to 50 percent in the next two decades. Who will supply that energy? The United States, among other countries. According to Mark Mills, an adjunct fellow at the Manhattan Institute and a former adviser to President Ronald Reagan, the United States is sit-ting on more than 10,000 billion barrels of oil-equivalent in natural gas, oil and coal—four times what’s available in the Middle East.

This time around, Montana doesn’t want to lose out. The state has 120 billion tons of coal below its surface, nearly one-quarter of known coal reserves in the United States, according to the state’s energy department. Gov. Brian Schweitzer has been an impas-sioned advocate of increased coal mining (specifi cally, clean coal) since he came into offi ce in 2005. “We have a lot of coal in this country. We have more coal than any other country on the planet,” he said at a 2007 legislative conference, advocating for clean coal technology. “We’ll create hundreds of thousands of jobs during the next 20 years. We’ll be energy independent. And you won’t have to send your grandchildren to another war some place that has oil.”

Such is the promise of America: Energy Exporter. Thanks to the unprecedented shift in global supply and demand, the U.S. is poised to transition from one of the world’s biggest consumers of energy to one of its largest producers. In 2011, refi ned oil exports

from the United States eclipsed imports for the fi rst time since the government began collecting comprehensive data in 1993. For refi ned gasoline specifi cally, the United States hadn’t been a net exporter since 1959. (It’s important to note that when it comes to crude oil, we still import far more than we export—meaning that the United States, for now, remains a net energy importer.)

But the long-sought goal of energy independence is starting to look like a possibility for the fi rst time since the 1950s. “The thought that U.S. oil and gas production would boom the way they have—after all, oil production is growing more quickly in North America than any other part of the world—would have been unthinkable to many only a decade ago,” says Blake Clayton, a fellow for energy and national security at the Council on Foreign Relations. “The prospect of the United States ever returning to the days of producing more oil than it consumes, what politicians often describe as ‘energy independence,’ used to seem like a chi-mera. Now it’s not nearly so far-fetched.”

Some have estimated that the United States could become the world’s leading energy producer by 2020. The economic impact would be staggering. The Manhattan Institute has esti-mated that if the energy exportation potential of the United States were maximized, as many as 4 million jobs would be created, and federal, state and local coff ers would be fl ooded with as much as $1 trillion in new revenue. Beyond the fi nancial windfall, the global ramifi cations of such a shift are diffi cult to predict. But the fallout would undoubtedly lead to a fundamen-tal reshaping of America’s geopolitical and macroeconomic role on the international scene.


S U P E R / P O W E R

1,000

2,000

3,000

4,000

-1,000

0

1993 1996 1999 2002 2005

Previous page: If coal exportation to Asia increases,

coal trains (like this one in Wyoming) will cut across the

Pacifi c Northwest to ports in Oregon and Washington.

U.S. NET IMPORTS OF PETROLEUM PRODUCTS (1993-2012)(Thousands of barrels per day)

GOV11_40.indd 42 10/12/12 2:43 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

At the local level, the impact is already being felt. States like Ohio, Pennsylvania and Texas have benefi ted greatly as the oil and gas industries have taken off in recent years. After natural gas deposits were discovered a few years ago near Williamsport, Pa., for example, more than 100 companies set up shop there. In 2010, while other cities were only beginning to dig out of the Great Recession, Williamsport’s 29,000 residents saw their town’s econ-omy grow by 7.8 percent, one of the fastest rates in the country. Meanwhile in Ohio, the unemployment rate is a full percentage point below the national average, and companies are reportedly investing hundreds of millions of dollars in the state to prepare for a pending natural gas boom. North Dakota, another leader in the oil boom, has the lowest unemployment rate in the country.

If coal follows a similar trajectory, states like Montana want to position themselves to reap the benefi ts. But eager policymak-ers will have to make the sell to their cities and towns. Turning the Pacifi c Northwest into the next frontier of energy expor-tation would require substantial investments in infrastructure. It would call for ports in Oregon and Washington to ship the product to China and its neighbors, along with increased rail traffi c cutting across Montana and Idaho to carry the coal to the sea. Both of those elements are already encountering resistance from many communities along that route, the places that would bear the brunt of the export boom. Local offi cials are worried about the impact on their infrastructure when rail traffi c, which is already a nuisance, rises to meet the increased output. (And that’s not to mention broader concerns about the environment and public health.)

No one’s anticipating a Persian Gulf on the Great Plains. At least not yet. But if even a fraction of that estimated trillion-dollar payday turns out to be realistic, cities and states may see the fi nan-cial promise of coal increasingly trump other concerns. And if the U.S. continues on the path toward becoming a net exporter of energy, the nation—and its place in the world—could soon be radically diff erent.

I f you want to get coal out of Montana, you’ll almost cer-tainly have to go through Helena. The state capital sits nestled between Helena National Forest to the north-east and Beaverhead-Deerlodge National Forest to the southwest—squarely on the path of any coal being shipped from the eastern part of the state to potential

terminals in Washington or Oregon. Bisected by the Montana Rail Link line, Helena already has between 35 and 50 trains passing through every day, according to a recent city traffi c study. Because most crossings are at grade, traffi c comes to a standstill every time they do. The problem is serious enough that the city’s emergency services have laid out alternate routes if they need to make a run, going signifi cantly out of their way to avoid the crossings.

If Montana’s coal industry expands as supporters hope it will, Helena offi cials expect the train traffi c could double. Ideally, the city would build concrete walls to mitigate train noise or, even better, replace the existing rail crossings with underpasses or overpasses. But in the wake of the economic downturn, Helena, like most cities, can’t aff ord such investments. “We don’t have the money to address any of this,” says Helena Commissioner Katherine Haque-Hausrath. “We’re a small city in the whole scheme of things. We’re just trying to do our part to be a part of the conversation.”

Three hundred miles west of Helena lies the town of Cheney, Wash., which would be similarly impacted by the increased rail traffi c from more coal production. Mayor Tom Trulove says he, too, is concerned about how the additional trains would aff ect his citizens. “Like everyone else, we’re in favor of jobs. We support economic activity. We’re just trying to fi nd a way to mitigate the social costs of that activity.”

Helena and Cheney are among the many communities that have sent letters to the Army Corps of Engineers, which is review-ing applications for coal ports in Oregon and Washington, asking for an environmental impact assessment of the plans—specifi cally the swell in rail traffi c—before any approval is granted. Oregon Gov. John Kitzhaber submitted a similar plea in April, and so far his request is the only one to earn a response. The Army Corps told Kitzhaber it would meet its requirements under the National Envi-ronmental Policy Act, but it didn’t respond to his concerns about rail traffi c. In a local newspaper, Kitzhaber’s natural resources policy adviser called the corps’ response “opaque.”

Helena’s letter cited the risk of increased traffi c congestion and pollution, of course. But it also framed the issue as one of international importance. “With access to our cheap coal, coun-tries in Asia will be induced to build new coal-fi red power plants, instead of transitioning to cleaner energy sources,” the City Com-mission wrote. “This will lock in reliance on coal as a source of



2008 2011 SO

UR

CE

: U

.S.

EN

ER

GY

IN

FO

RM

ATIO

N A

DM

INIS

TR

ATIO

N

GOV11_40.indd 43 10/12/12 2:43 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

energy for the life of these power plans, with an astronomically negative eff ect on climate change.”

For its part, the coal industry says it’s conscious of local concerns. The railroad companies say they’ve invested in new technologies to reduce the amount of coal dust escaping from their trains. And mining companies seem on board with Sch-weitzer’s push for clean coal technology. A spokesperson for Montana Rail Link, one of the largest rail companies in the state, says that fears like those voiced in Helena’s letter are “a gross mischaracterization.” “We think that there can be a balance,” says Bud Clinch, executive director of the Montana Coal Council. “All these concerns can be mitigated. This can be a good thing for the state of Montana.”

The tug-of-war between environment and economics is nothing new. But the promise and politics of energy exporting heighten the debate. Oregon and Washington have both fostered environmentally conscious reputations over a number of years. But with a total of six ports proposed in the two states—ports that would funnel as much as 100 million tons of coal to Asia every year—the states’ leaders have largely stayed quiet. Other than his letter to the Army Corps, Kitzhaber has declined to take a fi rm position on whether the ports should be built. Washington Gov. Chris Gregoire has taken a similar wait-and-see approach.

Many local leaders within those states, however, have been vocal in their opposition to becoming centers of the new coal economy. In May, the Seattle City Council passed a resolution


Some estimates place

the amount of exportable

natural gas, oil and coal

in the United States at

10,000 billion barrels of

oil-equivalent—four times

what’s in the Middle East.

GOV11_40.indd 44 10/12/12 3:22 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

opposing the construction of any coal terminals in the state, saying the impact on traffi c, public health and global climate change would be detrimental. Similarly, in September, the Port-land City Council voted unanimously to oppose any new port until a full environment and health assessment is conducted by the Army Corps.

Thanks to the slower-than-hoped-for recovery from the eco-nomic downturn, however, those environmental concerns may ultimately be outweighed by fi nancial ones. “If we weren’t still mired in the Great Recession, I think it would be more likely that the ports would not get built,” says Tom Power, an economics pro-fessor emeritus at the University of Montana. “But all bets are off given the anxiety associated with the lingering recession.”

S tates and localities are, understandably, focused on the tangible impacts of a shift toward energy exportation of coal, oil and natural gas. But there are other fundamental questions at the heart of such a transition. Is energy indepen-dence really achievable—and is it worth the

environmental toll? How would it reshape America’s role on the global stage?

Indeed, is the trend toward exporting even real? Some ana-lysts, for example, attribute last year’s shift on refi ned oil exports to decreased domestic demand in a depressed economy. Once the economy recovers, the thinking goes, American energy demand will rebound, and last year’s export boom will turn out to have


“THE PROSPECT OF THE UNITED STATES EVER RETURNING TO THE

DAYS OF PRODUCING MORE OIL THAN IT CONSUMES ... USED TO

SEEM LIKE A CHIMERA. NOW IT’S NOT NEARLY SO FAR-FETCHED.”

—BLAKE CLAYTON, COUNCIL ON FOREIGN RELATIONS

AP

IMA

GE

S.C

OM

GOV11_40.indd 45 10/12/12 3:22 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

been an anomaly, a statistical blip. Or maybe it won’t. Michael Ross, a University of California at Los Angeles political science professor and author of The Oil Curse: How Petroleum Wealth Shapes the Development of Nations, says that a host of factors—new technologies, discoveries of new resource deposits—could aff ect the country’s potential future as an energy exporter. Few people foresaw the current boom, he points out. The real bottom line, he says, is that “we simply do a terrible job of forecasting. I wouldn’t place a whole lot of money on anybody’s long-term forecast.”

It’s certainly not inevitable that states will choose revenues over environmental concerns. New York, for example, has placed a fi rm moratorium (although not necessarily a permanent one) on natural gas fracking, despite some estimates that the state is forgoing nearly 100,000 new jobs by doing so. And not everyone is so sure of the purported economic impact anyway. An analy-sis by the University of Montana projected that, while mining jobs in the state will likely increase between 2010 and 2020, they would actually grow more slowly than they did between 2000 and 2010. Other sectors, such as health-care services and lei-sure/hospitality, are expected to grow much more quickly.

“You only need a relatively small workforce to move huge quantities of coal. Mining and rail shipping are incredibly effi -cient in terms of labor,” says Power of the University of Montana. “It’s not that it’s a boon for the economy. It’s a boon for the state government. That’s where the impact is and that’s the reason it’s being pushed.”

But it’s the international implications of energy independence that could represent the most sweeping changes. It’s an idea that echoes the perspective that Montana’s Schweitzer expressed in his 2007 remarks. If we didn’t need to import oil from other countries, would we have gone to war with Iraq? Would we have intervened in Libya?

Michael Klare, a professor at Hampshire College and author of The Race for What’s Left: The Global Scramble for the World’s Last Resources, says there are numerous potential outcomes of an energy-independent America, including “a greater willingness of the part of the United States to pull its boots from the ground in the Middle East, while still controlling the oil fl ow at sea; a greater boldness in confronting China, sensing its greater dependence on imported oil carried by ship over sea lanes controlled by the U.S. Navy; and a greater focus by the United States on oil production in the Western Hemisphere.”

In other words, as much global power and infl uence as the United States wields today, energy independence could expand that reach even more. “Energy exporting countries are a lot less inclined to be cooperative, to play nice in the realm of interna-tional diplomacy,” says Ross. “For the world’s most powerful diplomatic and military power to go from dependent on others for its fuel to being independent, that could have quite far-reaching consequences.” G




WHERE’S THE COAL?These states have the highest recoverable coal reserves, according to the U.S. Energy Information Administration.

Wyoming38,284

West Virginia17,259

Illinois37,892

Kentucky14,388

Montana74,724

Texas9,339

New Mexico6,881

Pennsylvania11,436

(2010 fi gures, in million short tons)

SH

UT

TE

RS

TO

CK

.CO

M

Colorado9,609

Ohio11,378

GOV11_40.indd 46 10/12/12 2:47 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Only those who care for others know what it’s really like to care for others. That’s why AARP created a community with experts

and other caregivers to help us better care for ourselves and for the ones we love.

aarp.org/caregiving or call 1-877-333-5885


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


Aging residents are increasingly turning to cohousing.

Everybody Get Together

GOV11_48.indd 48 10/12/12 3:26 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

S everal years ago, Steve Pretl of Potomac, Md., saw that his next-door neighbor was outside, so he walked over to say hi. They chatted for a few minutes before the neighbor stopped Pretl and said, “You know I moved out three months ago, right?” He had only stopped by pay a visit. Pretl had had no

idea. He took it as a wake-up call. Perhaps it was time to get to know his neighbors. Today, Pretl is in his 12th year of living in a type of tight-knit residential develop-

ment known as cohousing, and it’s a good bet that his neighbors won’t move—or experience some other life-altering events—without his knowing about it. “It’s a blend of community and privacy,” says Pretl, 73. “You can have all the privacy you want. But if you do it too long, people will ask, ‘Why don’t we see you around?’”

Pretl and the other 80 or so residents of Takoma Village Cohousing in Washing-ton, D.C., treat one another like extended relatives. They range in age from 12 months to 85 years. Every week they cook and eat dinner together. Communal facilities—liv-ing spaces, a children’s play area, a tool workshop—encourage interactivity. There’s no professional management company in charge: The residents themselves handle basic repairs, cleaning and landscaping. When somebody’s ill, there’s an understand-ing that the neighbors will help out.

Once a relative novelty, cohousing developments continue to increase in popular-ity—and they could become a key part of the way developers and cities accommodate an aging population. Unlike their parents’ or their grandparents’ generation, baby boomers say they don’t want to decamp to Florida or Arizona upon retirement. They want to stay in the communities where they’ve spent their adult lives. For many experts on housing and senior issues, cohousing looks like an increasingly attrac-tive solution.

The idea of cohousing originated in Denmark in the 1970s; American develop-ers imported the model in the early 1990s. Today, there are about 110 cohousing developments throughout the country, says Joani Blank, a former board member of the Cohousing Association of the United States, which acts as a clearinghouse of information about the developments.


generatıons

By Ryan HoleywellPhotographs by Matt Roth

Takoma Village

Cohousing resident

Ann Zabaldo, who has

multiple sclerosis,

prepares lunch with

Brigitte Wazana, a

resident of the Blue-

berry Hill Cohousing

community in nearby

Vienna, Va.

GOV11_48.indd 49 10/12/12 3:26 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Blank fi rst moved into a cohousing residence in 1992, and she has the enthusiasm of an early adopter. The idea behind cohousing, she says, is very simple. It’s about creating “inten-tional neighborhoods” in which residents interact with their neighbors, as an alternative to the relative anonymity of high-rise apartment complexes or sprawling exurban McMansions. “Our intention is to be close to our neighbors, and be known by our neighbors, and know them,” Blank says. “And that’s it.”

The cohousing development where Blank lives, in Oakland, Calif., has wide sidewalks to encourage residents to stop and congregate. Cars don’t park in between homes, because doing so would create a barrier. A staple of cohousing is lots of meet-ings and lots of committees, since residents play such an active role in decisions large and small. In Blank’s community, residents have windows over the kitchen sink, and most tend to keep the curtains open. “In cohousing,” she says, “we want to maximize the openness.”

Inevitably, Blank says, people learning about cohousing for the fi rst time are tempted to view it as co-op-meets-commune, a dream of hippie counterculture. (The fact that many cohousing residents are baby boomers who came of age in the 1960s only fuels those parallels.) But Blank says that’s just a caricature. “We all have completely functional, self-contained units. I could be in any condo in the country.”

Historically, cohousing developments have included residents of all ages, but now there’s a growing interest in developments exclusively for aging residents, says Kath-ryn McCamant, president of the developer

CoHousing Partners and one of the earliest pioneers of the cohousing movement in the U.S. “Boomers are looking for an alternative that hasn’t been there before,” McCamant says. “They don’t want to live in communities of thousands of old people. They want to stay in charge.”

Those leading the shift will likely be seniors who’ve already lived in multigenerational cohousing developments, which tend to focus on families, and who may be searching for something else. “It’s not that the kids are annoying. Everybody loves them,” says Jim Leach, CoHousing Partners’ chairman and a resident of Silver Sage Village, a senior cohousing development in Boulder, Colo. “But when you have an intergenerational community with a lot of young families, the kids come fi rst. Dinners are like going to McDonald’s Playland. Ours are like going to a nice restaurant.”

Advocates of senior cohousing say it’s an attractive option for many reasons. Developments in urban areas would allow aging people to be less reliant on cars. The units are much easier to main-tain than large single-family homes. And cohousing allows them to remain socially active and engaged with the community. Meanwhile,

there’s the very practical benefi t of knowing that there are people close by in case of a medical emergency. While cohousing isn’t a solution for those suff ering from serious medical conditions, it can be a useful solution for people who merely need the occasional helping hand.

“When people are connected, they start to work as an extended family,” Leach says. “They tend to take care of each other, even though there’s no obligation.”

When a resident of Blank’s development in Oakland was diagnosed with cancer, neighbors provided round-the-clock help so that her hus-band could continue going to work. Advocates say that with a minimal amount of care—in some cases, just the care that’s provided by thoughtful neighbors—seniors can remain at home and relatively independent much later in life than they may otherwise have been able to. “[Seniors] want to feel like they control their own destiny,” Leach says. “A high percentage of them don’t want to be stuck somewhere where people are taking care of them, and they don’t have much of a relationship with them.”

Groups like AARP and the American Plan-ning Association have paid close attention to cohousing, since both styles—seniors-only and multigenerational—may be an attractive option to aging baby boomers. The model will no doubt remain a niche option. But the boomer demographic is so large that it’s worth paying attention to, says Rodney Harrell, senior stra-


E V E R Y B O D Y G E T T O G E T H E R

Cohousing Developments, by State

California 41Washington 20Colorado 17Massachusetts 13North Carolina 11Oregon 11SOURCE: COHOUSING ASSOCIATION OF THE UNITED STATES.

NUMBERS INCLUDE PROJECTS AT ANY STAGE OF DEVELOPMENT.

GOV11_48.indd 50 10/12/12 2:54 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


generatıons

Steve Pretl, a 12-year resident of

Takoma Village, drops off his recycling.

Below: Residents gather for a weekly

dinner in the complex’s common area.Right now there are just a handful of cohousing developments exclusively for seniors:

Silver Sage Village/Boulder, Colo.ElderSpirit Community at Trailview/Abingdon, Va.ElderGrace/Santa Fe, N.M.Wolf Creek Commons/Grass Valley, Calif.Glacier Circle/Davis, Calif.SOURCE: COHOUSING ASSOCIATION OF THE UNITED STATES

GOV11_48.indd 51 10/16/12 10:28 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

ADVANCING EFFICIENCY ADVANCING COMMERCE

©2012 MasterCard.

MasterCard, MasterCard Government Purchasing Card, MasterCard Public Sector Payment Solutions, and the MasterCard Brand Mark are all trademarks of MasterCard International Incorporated.

Government PaymentSolutions

Who knows, they may appoint you

Secretary of Efficiency and Convenience.

It’s a new era of productivity with advanced procurement and disbursement solutions from MasterCard.

At MasterCard, we’re providing progressive solutions to help government processes run more smoothly and

efficiently. With MasterCard Public Sector Payment Solutions® like the MasterCard® Prepaid Government

Benefits Card and MasterCard Government Purchasing Card,® you can help reduce administrative expenses,

increase transparency, and make program management more secure. Plus, by improving service for

recipients and employees, MasterCard procurement and disbursement solutions deliver the kind of

convenience that everyone can get behind.

Explore our prepaid card solutions at mastercard.com/government.


Editorial Prepress

Other OK to go

100 Blue Ravine RoadFolsom, CA 95630

916-932-1300

PAGE

tegic policy adviser with AARP’s Public Policy Institute. “You’ve got enough num-bers that there are still people out there to fi ll every niche and category,” he says.

Cohousing isn’t for ev-erybody. Some critics say more work must be done to encourage affordable housing

units within the developments. Otherwise, they say, cohousing will remain a bou-tique option for the already well-to-do. As one resident of Takoma Village Cohous-ing notes, while her neighbors often tout the racial and religious diversity within their community, the economic makeup of the development is homogeneous: sol-idly and entirely middle class. “We don’t just want condos for rich people,” Harrell says. “We want aff ordable units mixed in. But it’s a challenge, especially [because] when it’s such a niche option, prices tend to go up.”

Advocates have also called on city gov-ernments to help encourage cohousing by creating zoning policies that foster the type of dense development that includes cohousing. “It’s a matter of recognizing the new constituency and the new popu-lation and tailoring government programs to meet those unique needs,” says former

U.S. Department of Housing and Urban Development Secretary Henry Cisneros, who has written about housing options for aging Americans.

In some places, local offi cials have worked to help support cohousing develop-ments. Dene Peterson, one of the founders of ElderSpirit Community at Trailview, located in southwest Virginia, says the development leveraged government money in order to secure private loans before opening in 2006. The development became a reality thanks largely to a combination of loans from the Virginia Housing Development Author-ity and a grant distributed by the Virginia Department of Housing and Community Development. Of the senior development’s 29 units, 16 are designated as low-income rentals. In fact, ElderSpirit calls itself “the fi rst mixed-income, mixed-ownership elder cohousing community in the United States.”

Peterson, who says she wasn’t inter-ested in a nursing home, couldn’t imagine spending her fi nal years anywhere else. “I expect to die at home,” she says. “And one reason I built this was for a good death for myself.” G

Email [email protected] Photo slideshow and more stories on aging at governing.com/generations


generatıons

*Source: RPMG Research Corporation, 2010 Purchasing Card Benchmark Survey Results.©2012 MasterCard. MasterCard, MasterCard Purchase Control, and the

MasterCard Brand Mark are all trademarks of MasterCard International Incorporated.

Reduce costs and increase operational efficiency with

MasterCard Purchase Control.® Learn how at

mastercard.com/incontrol.

Takoma Village’s communal facilites include a garden, a hot tub and a play

area for children.

E V E R Y B O D Y G E T T O G E T H E R

GOV11_48.indd 53 10/16/12 10:31 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


JOHNS HOPKINS HOSPITAL anchors an expanding network of medical facilities on Baltimore’s east side. To the north, the Johns Hopkins University campus covers some 140 acres. Nearby, the grounds of Loyola University Maryland stretch out over 80 acres. In all directions of the city, a large roster of governments, universities and nonprofi ts own parcels of land. Yet the one place where most of these plots are noticeably absent is on the city’s property tax rolls.

In all, the value of property owned by governments, nonprof-its and other tax-exempt organizations totals $15.1 billion—30 percent of Baltimore’s entire assessed value. Six years ago, exempt properties accounted for only 25 percent of the total value. But since Baltimore relies on property taxes for half its revenue, the increase is a signifi cant hit to the city’s pocketbook. In 2007, Baltimore’s tax bill for all exempt properties would have totaled $202.4 million if they were taxable at the current rate. This year, the city would have collected $343.2 million. “It’s a long-term issue that we can’t ignore,” says Mayor Stephanie Rawlings-Blake. “Doing nothing isn’t an option.”

Baltimore is hardly alone. A pattern of property disappear-ing from tax rolls has developed across many of the nation’s

urban cores as cities grapple with dwindling tax bases. In 16 of the 20 most populous cities with available data, tax-exempt properties today account for a higher share of the total assessed value then they did fi ve years ago, according to a Governing analysis of assessment rolls [see table, page 57]. Nearly 29 percent of Jacksonville, Fla., property, for instance, was not taxable in 2011, up from 21 percent of the assessed value in 2006. Similarly, the assessed value of exempt Phoenix properties swelled from $2.5 billion in fi scal year 2007 to $3.8 billion in fi scal 2012, even as the city’s total taxable assessed value remained about the same.

The tax base is under siege from many quarters. In most cit-ies, it has deteriorated with the recession and the bursting of the housing bubble. The degree to which newly exempt property has cut into revenues or caused tax rate hikes varies greatly across the country, with some cities far more reliant on property taxes than others. The bulk of exempt property in Baltimore and most other large cities belongs to governments. Accordingly, local gov-ernments buying up vacant parcels for redevelopment or states acquiring additional land are contributing factors to more prop-erty coming off tax rolls.

MISSING

MONEY

GOV11_54.indd 54 10/12/12 2:35 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


BY MIKE MACIAG

Property tax exemptions are most prevalent in capital cities and college towns, where the top employers—governments and universities—are also tax-exempt property owners.

Some cities in fi nancial turmoil are home to par-ticularly high numbers of exempt properties. In Harrisburg, Pa., the state capital whose bankruptcy fi ling was rejected last year, nearly half the total assessed property value is exempt. Much of that property belongs to the state. If Pennsylvania paid taxes on its holdings, its annual bill would total $4.1 million, according to the city. Pennsylvania does, however, appropriate money to cover fi re protection costs. It contributed $496,000 last year and boosted the allocation for the current fi scal year to $2.5 million as part of the city’s fi scal recovery plan.

Other cities increasingly feel the same pain as more public entities and nonprofi ts cross property off tax rolls. Of the few localities Governing analyzed where the exempt share of total property value did not increase, only Fort Worth, Texas, showed a decline exceeding 1 percent.

Many cities respond by negotiating PILOT agreements with nonprofi ts, typically taking the form of long-term contracts. In a

Part of some cities’ jump in exempt property can also be traced to hospitals, universities and other nonprofi ts occupy-ing valuable real estate. Baltimore’s total property exemptions for religious and nonprofi t institutions climbed approximately 76 percent from fi scal year 2006 to 2012, while taxable values increased 35 percent. Nationwide, the number of nonprofi ts grew by 25 percent between 2001 and 2011. It isn’t just the sheer number of them that’s impressive. It’s that these non-profi ts are also economic engines for cities. The National Cen-ter for Charitable Statistics at the Urban Institute reports the nonprofi t sector is expanding faster both in terms of employ-ees and wages than business and government, and the indus-try’s share of GDP rose from 4.86 percent in 2000 to 5.4 per-cent in 2010.

As the problem compounds, state and local governments have embarked on a serious search for answers. Their approaches range from stepped-up eff orts to collect voluntary payments in lieu of taxes (PILOTs) to targeting the defi nition and basis for a nonprofi t’s tax exemption. But a comprehensive solution to replenish municipal coff ers and shift the tax burden away from residents has yet to emerge.

More properties are coming off the tax rolls. What are cities doing about it?

GOV11_54.indd 55 10/12/12 2:36 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

recent survey of jurisdictions throughout the country, the Lincoln Institute of Land Policy found at least 218 localities in 28 states initi-ating PILOTs since 2000. The survey also reported educational and medical institutions fund 90 percent of all PILOT revenue, with much of the total from hospitals and universities in the Northeast.

However, PILOT revenue hardly registers on most city bud-gets, generating only 0.13 percent of a typical locality’s general revenue, according to the study. “It just isn’t really a game changer for most municipalities,” says Adam Langley, a research analyst who co-authored the report. For instance, Boston’s PILOT pro-gram is the nation’s largest—collecting $19.4 million from 34 educational, medical and cultural institutions last fi scal year. Still, the total only accounts for 1.5 percent of its property taxes.

Baltimore’s experience is typical of the tricky balancing act cit-ies face. In 2010, Baltimore formed a six-year PILOT agreement with state hospital and university associations totaling $20.4 mil-lion through fi scal year 2016. Rawlings-Blake acknowledges the PILOT is only a temporary revenue stream and one dwarfed by nonprofi ts’ property tax exemptions. But she notes that nonprof-its, which own approximately 11 percent of the total property value, remain key to the city’s economy. “We have to fi gure out a way to balance the contributions these nonprofi ts are making,” she says, “while at the same time acknowledging the fact that there is a shared burden for the core services the city provides.”

The nonprofi ts felt pressure in 2010 after a bill introduced in the City Council proposed a bed tax for exempt institutions. Joseph L. Smith, director of local government aff airs for Johns Hopkins Med-icine and Johns Hopkins University, says the institutions already pay utility fees and provide numerous benefi ts to the community. “We don’t think it’s good public policy to have our real estate taxed,” he says. “Having said that, we recognized at the time the city had a budget defi cit.” The hospital system and university contributed $5.4 million this fi scal year, an amount set to decline over the length of the agreement. It’s too early to know whether Hopkins will enter into another PILOT after 2016, but Smith says a decision likely hinges on the economy and the city’s fi nancial situation.

In fashioning PILOTs, there is no cookie-cutter formula applica-ble to all cities, says G. Reynolds Clark, a vice chancellor at the Uni-

versity of Pittsburgh, who co-chairs the Pittsburgh Public Service Fund. In his talks with other nonprofi ts, Clark is careful to avoid using the terms “PILOT” and “taxes.” “There’s a concern that if you acknowledge making a payment in lieu of taxes, you’re admit-ting you should be paying taxes,” he says. It’s more important, Clark suggests, for city offi cials to initiate an open dialogue with nonprof-its instead of simply demanding they pay up. “I believe a common denominator can be found that everyone can work with,” he says.

Woods Bowman, a DePaul University professor who has stud-ied exemptions, says PILOTs are often unpredictable and not transparent. When a city is about to lose property from the tax rolls, he suggests it could assess a one-time impact fee. Such fees are on more solid ground legally, he says, and they would allow groups to count payments against project development costs.

A diff erent type of deal was struck earlier this year when Uni-versity of Pittsburgh Medical Center bought a parcel of land from a Pennsylvania township for a new hospital, agreeing to annu-ally pay 50 percent of the assessed value in property taxes. The arrangement led some offi cials in the region to speculate about forging similar agreements with other exempt institutions.

Apart from PILOTs, more offi cials are questioning the defi nitions used to qualify nonprofi ts for tax-exempt status. Most state laws list a myriad of qualifying group types. There’s typically a catch-all term, such as “charity,” that’s open for varying interpretations,

leading to court challenges, many of which reach state supreme courts. “People are identifying the issues and learning how to bring these challenges or at least talk about them,” says Evelyn Brody, a professor at the Chicago-Kent College of Law. Although variations in state laws are relevant, Brody says what’s happening on the ground in each area is more important.

The Pennsylvania Supreme Court raised eyebrows in April when it ruled a Brooklyn-based Orthodox Jewish summer camp did not qualify as a purely public charity. In the case, the court asserted supremacy of its 1985 decision establishing a fi ve-point test granting charities tax-exempt status. At issue was one requirement to “relieve the government of some of its burden,”

which the camp failed to satisfy. Some jurisdictions are looking into modifying

their defi nitions. But, Brody says, about half of states outline exemptions in their constitutions, meaning such changes would be diffi cult.

The exempt status of nonprofi t health-care facilities, in particular, is receiving far greater scrutiny. Some states set mandates for amounts of free or discounted care tax-exempt hospitals must provide low-income patients. Texas nonprofi t hos-pitals, for example, must devote at least 4 percent of net patient revenue to charity care. Illinois Gov. Pat Quinn provided clarity to state rules this sum-mer when he signed a bill setting clear guidelines. A tax-exempt hospital can retain its exemption by providing charity care or health services equal to or exceeding its estimated property tax liability, which would be determined by a third party.

56

M I S S I N G M O N E Y

Denver: Includes tax year 2011 private schools, religious and charitable organizationsColumbus: Includes tax year 2011 colleges, charities or churchesBoston: Includes FY 2012 educational, charitable, religious, scientifi c/cultural and social groupsBaltimore: Includes FY 2012 religious and nonprofi t organizationsHouston: Includes 2011 charitable, religious, youth development organizations and private schools

SOURCE: GOVERNING

Nonprofi t Property ExemptionsPercentages of a city’s total assessed value owned by nonprofi ts and educational

institutions. Cities classify properties differently; see descriptions below.

PERCENT OF TOTAL ASSESSED VALUE

Denver 4.19

Columbus 11.84

Boston 14.41

Baltimore 11.33

Houston 4.43


GOV11_54.indd 56 10/12/12 2:37 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

California Senate Majority Leader Ellen Corbett also called for tightening of rules for nonprofi t hospitals in her state. The impetus was a state audit in August that found exempt hospitals were not required to provide specifi c amounts of uncompensated care or community benefi ts. At the four nonprofi t hospitals audi-tors looked at, each one used a diff erent method of calculating uncompensated expenses.

Nonprofi t hospitals are fi ghting back, arguing that charity care is not the best or only measure of actual community benefi t. Anne McLeod, the California Hospital Association’s senior vice president of health policy, says affl uent communities demand diff erent services than low-income areas where there is more of a need for charity care. “By painting broad brush strokes on everyone, you run the risk of putting unfair demands on some hospitals,” McLeod says. The association opposes narrowing the state’s exemption requirements, arguing they’re already short-changed in Medicare and Medicaid payments. And in theory, once the Aff ordable Care Act is implemented, demand for charity care will be minimized since more people will be insured.

No one is suggesting churches or soup kitchens lose tax exemptions. Brody suspects that nonprofi t hospitals are eyed

because they compete with for-profi t facilities. Moreover, the high salaries of hospital executives likely draw the ire of some offi cials. “You see these pressure points that make the states ask questions that they might not have asked before,” Brody says.

Most exempt nonprofi ts already pay sales tax and utility fees. It’s also important to note that many nonprofi ts own no property. An analysis by Joseph Cordes, a George Washington University economics professor, found only half of nonprofi ts reported own-ing real property on their 2009 IRS 990 forms. Some assessment offi ces don’t expend much resources reassigning values to the properties nonprofi ts own. The Cook County, Ill., Assessor’s Offi ce and three others contacted for this story could not provide exempt property value totals.

In employment hubs, workers living outside city limits exacerbate property tax woes. As Michael Pagano, dean of the College of Urban Planning and Public Aff airs at the University of Illinois at Chicago, points out, these workers converge on downtowns during the day, requiring public

safety and transportation services, but typically don’t contrib-ute property or income taxes.



Property Tax Exemptions for U.S. CitiesGoverning compiled property assessment totals for the 20 most populous U.S. cities with available data. Exempt property includes gov-

ernment parcels unless otherwise indicated. Figures are not comparable between most cities because assessment offi ces collect data

differently and have varying assessment cycles.

Austin, Texas 2011 8,393 88.01 10.87 12.4

Baltimore, Md. 2012 18,774 49.90 15.13 30.3

Boston, Mass. 2012 8,347 118.78 34.80 29.3

Charlotte, N.C. 2011 5,929 98.96 12.61 12.7

Columbus, Ohio 2011 19,073 19.61 5.60 28.5

Dallas, Texas 2011 15,060 100.23 23.44 23.4

Denver, Colo. 2011 18,487 14.19 3.98 28.0

Fort Worth, Texas 2011 8,576 46.54 12.06 25.9

Houston, Texas 2011 40,476 165.00 42.69 25.9

Indianapolis (Marion County), Ind. 2011 16,403 61.26 4.59 7.5

Jacksonville (Duval County), Fla. 2011 19,169 57.73 16.61 28.8

New York, N.Y. 2011 39,102 255.58 107.95 42.2

Philadelphia, Pa. 2012 24,580 18.02 5.57 30.9

Phoenix, Ariz. 2012 21,923 16.21 3.84 23.7

Seattle, Wash. 2012 7,835 142.04 31.56 22.2

Washington, D.C. 2011 12,464 220.82 81.53 36.9

(Assessed values listed in billions of dollars)

CITY

FULLY EXEMPT

PARCELS

TOTAL ASSESSED

VALUE

% OF VALUE

EXEMPT

EXEMPTASSESSED

VALUEYEAR

FULLY EXEMPT

PARCELS

TOTAL ASSESSED

VALUE

% OF VALUE

EXEMPT

EXEMPTASSESSED

VALUEYEAR

2006 7,293 67.62 8.14 12.0

2006 17,467 34.72 8.92 25.7

2007 8,709 110.46 27.46 24.9

2006 4,738 75.04 8.77 11.7

2006 8,980 18.86 4.08 21.6

2006 13,652 96.01 20.92 21.8

2006 19,016 11.46 3.14 27.4

2006 11,436 37.76 10.49 27.8

2006 35,845 130.25 31.09 23.9

2007 19,267 63.09 4.45 7.1

2006 16,846 53.73 11.20 20.8

2006 36,952 192.65 82.63 42.9

2006 26,849 15.80 4.37 27.7

2007 18,046 14.78 2.45 16.6

2006 7,288 109.05 20.06 18.4

2006 - 158.16 59.66 37.7

California Cities In California, government-owned property is considered “non-taxable” and does not require an exemption, so such properties are not refl ected in the listed assessed values. Exempt values shown are only for nonprofi ts and other owners specifi cally required to obtain an exemption.

Los Angeles County, Calif. 2011 - 1,035.95 37.25 3.6

San Diego, Calif. 2011 1,915 176.12 6.51 3.7

San Jose, Calif 2012 1,333 111.32 3.95 3.5

San Francisco, Calif. 2012 4,939 153.45 5.21 3.4

2006 - 880.44 24.50 2.8

2006 1,708 153.98 4.35 2.8

2007 1,261 101.70 2.87 2.8

2007 5,076 115.86 4.06 3.5

Figures exclude personal property unless noted below. Data is current as of the time it was collected earlier this year. Please note that most exempt properties are not assessed annually, and values assigned to exempt parcels in some cities may be out of date. Assessment offi ces for Chicago, El Paso, Texas, Memphis, Tenn., and San Antonio, Texas, could not provide total assessed values for exempt properties. The city of Detroit did not respond to a Michigan Freedom of Information Act request by the time of publication.

Austin: Travis Central Appraisal District Chief Appraiser Marya Crigler estimated approximately 10 percent of exempt improvements have not been assigned a value. Homestead cap and productivity loss values, totaling $515,866,682 in 2011, were included in the total assessed value, but are considered neither exempt nor taxable. Figures include personal property.Baltimore: Listed values refer to the “full cash value,” corresponding to the maximum taxable value for a property during a three-year cycle. In FY 2011, 27.3 percent of the total assessed value was exempt.Boston: Some of the 8,709 exempt parcels in 2007 and 8,347 in 2012 received partial exemptions.Charlotte: Figures listed include personal property. Government buildings and other untaxed properties accounted for a total appraised value of $10,890,781,928 in 2011 and $7,555,068,900 in 2006, according to data provided by Mecklenburg County Government.Dallas: A small number of city properties outside of the Dallas Central Appraisal District are excludedin 2011 data. The total parcels declined from 2006, in part because of a 2008 law that turned over assessment of outlying parts of the city to other entities.

Fort Worth: Figures do not include cases before arbitration and incomplete accounts. Indianapolis (Marion County): Exempt assessed values do not include all government-ownedproperties, which is not assessed in some townships. Assessed values listed include personal property, parcel counts do not.Los Angeles: Exempt parcel counts are for both exempt and non-taxable parcels.Philadelphia: Numbers include abatements. Most recent fi gures are from 2011 assessments for tax year 2012. Phoenix: Assessed values are secondary valuations and include personal property.San Francisco: Exempt parcel counts are for both exempt and non-taxable parcels.Seattle: Values listed are market values; about 21.4 percent of the total market value was exempt in 2011.Washington: The District of Columbia government reports taxable values rose in recent years, refl ecting the commercial property boom in D.C.

SOURCE: GOVERNING CALCULATIONS USING DATA FROM LOCAL ASSESSMENT OFFICES, FINANCE DEPARTMENTS AND AUDITOR’S OFFICES

GOV11_54.indd 57 10/12/12 4:43 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Ensuring citizen safety and supporting critical business operations are important even during tough economic times. At GSA we offer direct access to a wide range of quality local and global contractors offering products and services at pre-negotiated ceiling prices. Our online tools and customer support specialists are available and ready to help you respond quickly to your state and local needs. GSA helps you generate efficiencies and savings for the American people.

To learn more, call 703-605-9155 or visit www.gsa.gov/stateandlocal.

Law Enforcement & Security

Information Technology

Emergency Response

& Recovery

Firefighting Protection

Time, Money, and Lives.

Solutions That Save

In Baltimore, offi cials have responded with a balance of new taxes and credits. William Voor-hees, director of revenue and tax analysis for the city’s fi nance department, says it wants to tax commuters who work there and don’t pay any local taxes. So far, this approach has been lim-ited to taxes on parking and beverage containers. Meanwhile, the property tax rate remains one of the region’s highest, so the city implemented a homeowner’s tax credit this summer. Baltimore property owners subsidize an average of $1,575 in annual tax liability for exempt properties, includ-ing public buildings, before credits. Long term, Voorhees says, the city plans to diversify rev-enues and continue to push down property taxes.

Some local governments lean heavily on prop-erty taxes, particularly in the South, Northwest and New England. Property taxes accounted for 65 percent of Boston’s fi scal year 2012 revenue, compared to less than 10 per-cent for Columbus, Ohio.

Other localities have addressed revenue losses by attaching fees for water and other services. “Cities are being very intelligent in trying to fi gure out how to charge for the demand for services in a way that doesn’t violate the tax-exempt status of the property owner,” Pagano says. In Ohio and Kentucky, workers pay some

income tax to their place of employment. But in other areas, the tax structure often doesn’t link the user of a service to its cost.

This has to change, Pagano says. “What we’re facing is one of those once-in-a-many generation opportunities to fundamentally revisit the social compact between a city and a region.” G

Email [email protected] View more data at governing.com/taxexempt



Baltimore: Total Values of Exemptions

Individual exemptions not included. By comparison, the total taxable assessed value increased approximately 35 percent from FY 2006 to FY 2011, according to Baltimore records.

$5 billion

$4 billion

$3 billion

$2 billion

$1 billion

02004 2005 2006 2007 2008 2009 2010 2011

Educational/Religious Charitable and Fraternal Federal State County/Municipal

SOURCE: MARYLAND DEPARTMENT OF ASSESSMENTS & TAXATION

GOV11_54.indd 58 10/16/12 10:34 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

PUBLIC OFFICIALS

YEARof the2012

Elaine M. HowleAuditor, State of California

Joette KatzCommissioner, Connecticut Department of Children and Families

John E. NixonDirector, Michigan Department of Technology, Management & Budget

Toni PreckwinkleBoard President, Cook County, Ill.

Bruce HannaCo-Speaker, Oregon House of Representatives

Arnie RoblanCo-Speaker, Oregon House of Representatives

Mark RohrCity Manager, Joplin, Mo.

Brian SandovalGovernor, State of Nevada

The award dinner

will be held on

November 15th at

the historic Willard

InterContinental Hotel in

Washington, D.C.

For more information,

visit governing.com/events

Congratulations to the honorees from our sponsors!


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

There was a time when McDow-ell County, W.Va., was nation-ally known for its coal mining industry. At its height in the

1950s, McDowell’s population was nearly 100,000 people—the third highest in the state. Fast-forward to today and coal mining has all but disappeared, and the county’s population has shrunk by 80 percent. Now, a public-private coalition is undertaking a massive project to rescue the struggling county and its troubled schools.

The coalition, Reconnecting McDow-ell, is made up of four dozen public and private organizations that have funneled more than $10 million into McDowell County in an eff ort to revive its 3,600-stu-dent school district, which has been under state control for more than a decade. But as

organizers fi ne-tune their plan to restore the county’s 14 schools and the community around them, the group has hit a road-block: Housing options are slim.

The school system already has doz-ens of teaching vacancies, so to draw in new teachers, Reconnecting McDowell plans to build a “teachers village” in the county within two years. Bob Brown, the project’s lead coordinator, says the 20- to 25-unit apartment building would resemble a college dormitory, with col-laborative workspaces, common rooms and a small gym. That could help draw young teachers from top schools around the country, says Brown. The hope is that the village setup would create ties among new teachers and keep them in McDow-ell County longer.

“You can’t expect someone to leave life on a college campus for an isolated area where they live in the middle of nowhere and don’t know anybody,” Brown says. “They need a collegiate atmosphere where they can have a social life.”

Brown has spent months traveling to live-in work communities in other cities to fi nd the best model for McDowell. Live-in work communities aren’t new develop-ments, particularly for teachers. The idea started in Chicago and has since spread to Baltimore, Cleveland and now Newark, N.J., which plans to open a teachers vil-lage next year. But McDowell County’s teachers village could be the fi rst for a ruralcommunity, which leaders say could serve asa model for other counties facing waningpopulations and crumbling infrastructure.

Housing TeachersTo improve its schools, a county in West Virginia is strengthening its infrastructure.

Problem SolverReal-world solutions and ideas for government managers.


Caption

WIK

IPE

DIA

.OR

G/N

AS

CA

R1

99

6

By Sarah Ferris

Housing for teachers is

scarce in McDowell County.

GOV11_60.indd 60 10/16/12 10:45 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

The project got its start when former West Virginia fi rst lady Gayle Manchin asked American Federation of Teachers (AFT) President Randi Weingarten for help building up the county’s schools. With a promise to tackle issues of poverty alongside education, the two rallied sup-port across the public and private sectors. “A public-private partnership like this has never done before,” says AFT spokes-woman Janet Bass. “Usually these people don’t talk to each other, which is why it’s so incredible.”

With the leadership of AFT, Recon-necting McDowell has put money down on an aging six-story warehouse in the county’s largest town, Welch, but Bass says organizers are still scouting other sites. “The partners very much want this to happen, but we’re not going to just jump,” she says. “We want to make sure it’s right. We feel the urgency, and we very much want to make it a reality.”

Beyond housing, funds have been set aside for reading centers, music pro-grams and online learning resources. Earlier this year, the state Legisla-ture passed a bill to ease the process that McDowell County must follow to become a school innovation zone, which would free selected schools from some state rules and policies, giving them greater fl exibility to embrace new ideas and teaching strategies.

Native West Virginian Brown says locals were initially skeptical about

“people coming from the outside” to confront community issues like drug use and failing schools. According to statis-tics compiled by Reconnecting McDow-ell, the county continues to suff er West Virginia’s worst dropout rate and has

become among the nation’s poorest areas—72 percent of the county’s stu-dents live in households lacking gainful employment. Additionally, the county leads the nation in fatal prescription painkiller overdoses. But as money con-tinues to pour into the county and more organizations sign on, Brown says the doubt has faded.

“What I’ve seen already is hope,” he says, stressing that the project’s eff ects can already be felt around the county. Brown points to a young woman who moved with her husband to McDowell County six months ago to be part of the proj-ect. “It is a massive undertaking, and it’s generated an incredible amount of excite-ment. The community has bought into this project.” G



See how online classes work by watching a multimedia demo at bakercollegeonline.com

(800) 469-3165

THE DBA THAT WORKS FOR WORKING PEOPLE.Introducing a Doctoral Degree designed for real-world

professionals concentrating on real business challenges and

realistic schedule demands. A flexible structure allows you to earn

your degree while still earning a living. Plus, every one of our

graduates receives Lifetime Employment Assistance—free and forever.

watching a eonline.com

X64

08BCO An Equal Opportunity Affirmative Action Institution.

Baker College is accredited by The Higher Learning Commission and is a member of the North Central Association / 30 North LaSalle Street, Suite 2400, Chicago, IL 60602-2504 / 800-621-7440 www.ncahigherlearningcommission.org. Baker Center for Graduate Studies’ MBA program is also accredited by the International Assembly of Collegiate Business Education (IACBE).

THE TAKEAWAY:

• McDowell County’s unemployment rate is higher than both the state’s and the nation’s, and its school system has been under at least partial state control since 2001.

• Reconnecting McDowell is a long-term, comprehensive effort to make educational improvements in the county. Partners from businesses, government and nonprofi t agencies have committed to seeking solutions to problems the county faces—including high poverty, substance abuse, limited medical services, inadequate access to transportation and technology, unemployment and underperforming schools.

GOV11_60.indd 61 10/16/12 10:37 AM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

is sometimes thrown out there as a magic button, but if you go with the low bid [to the exclusion of all other considerations] you may get yourself into big trouble.”

Charlotte, N.C., has been using man-aged competition for about 15 years. David Elmore, business process manager for the city’s Business Support Services, says he learned to “look not just at low price, but also at how people do the work. We learned to ask, ‘Why is this guy low? What kind of equipment is he running? How big is his crew?’”

Some cities back into managed com-petition when privatization creates push-back from unions. That was the case in Indianapolis, according to former Mayor Stephen Goldsmith. Goldsmith agreed to hold off on a wholesale privatization eff ort, and spent time communicating directly with city employees whose jobs might otherwise have been outsourced. “I was impressed with the workers,” he recalls. “They always had good ideas about how to do their jobs better. We did 80 managed competitions. Some were won by public employees and some by private management.”

Phoenix was one of the pioneers in using this technique for services like gar-bage collection. The city now has a 40-year track record in using managed competition. “In most cases,” Frank Fairbanks, former city manager, reports, “it has proven an eff ective way of doing business.”

As he describes it, the city created a thorough description of the service it wanted and wrote an RFP. Once the RFP was prepared, the city would publish it and then hold a bidding conference at which potential bidders could critique the RFP. City departments were allowed to bid against the private sector. Fairbanks adds that the city auditor “owned the process. The City Council did have the power to award the bid to whichever company they

By Katherine Barrett and Richard Greene

62

Problem Solver | SMART MANAGEMENT


feet off . “There is a managed competition benefi t in encouraging public employees to be more innovative,” says Gene Perry, policy analyst at the nonprofi t Oklahoma Policy Institute. It motivates “employees to think about ways to improve effi ciency and to have a more dynamic way to pay employees to improve processes.”

Not that managed competition is a panacea. Relying exclusively on the low-est bids can lead a city astray when quality of services isn’t taken into account. “Cities need to be very careful because the devil is in the details,” says Perry. “Competition

Bidding WarsWho wins when public employees bid against private companies for a city contract?

We’ve grown weary of de-bates about privatization, especially those where commentators tell us that

it is always good or that it is never good. This simplistic argument is troubling as it leaves out an alternative: managed com-petition. Instead of simply preselecting private- or public-sector employees, projects can be put out for bid with both groups competing for the work.

One big benefi t of this is that it encourages public-sector employees to stay on their toes—without lopping their

© R

ON

HA

VIV

/VII/

CO

RB

IS

One big benefi t of managed competition is

that it encourages public-sector employees to

stay on their toes—without lopping their feet off.”

“

GOV11_62.indd 62 10/12/12 2:53 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

| IDEA CENTER

thought could deliver the best services, but I could not recall a single incident in which they did not go with the low bidder.”

Some observers of managed competi-tion fear that the process might be just a backdoor way to outsource city jobs. That was the case in San Diego when its citizens approved an initiative permitting managed competition back in 2006 [see “Bidding for a Job You Already Have” in Govern-ing, October 2012]. At the time, opponents argued that “the initiative was actually a scheme to award lucrative contracts to political allies in the private sector,” according to Keegan Kyle, writing in the Voice of San Diego. Kyle checked around and discovered that all four bids done through managed competition wound up in the hands of city employees.

The theory that managed competition would favor the private sector was also proven to be untrue in Phoenix. “Very early in the process the city lost 80 per-cent of the bids and maybe retained 20 percent,” says Fairbanks. “But as time went on, it headed toward a 50-50 split. For some two- to three-year spans, the city employees would win two-thirds of them. But it went back and forth.”

Charlotte isn’t doing as much man-aged competition-based bidding as it did in years past. The reason: It no longer has as many clearly appropriate contracts for which to use it. But leaders there have given the topic a great deal of thought. According to a document produced by that city, managed competition has a num-ber of benefi ts. One is that it nurtures open discussions between front-line employees, many of whom have a good idea of how to improve effi ciency and management. It also “encourages all involved parties to talk about what services they perform, why they do them and if they should con-tinue to be off ered in the same way.”

Charlotte leaders discovered another plus: Competition can help to create a heightened sense of employee pride. When a city-run business unit competes with the private sector and wins, “every-one is proud of the team.” G


By Brian Peteritas

Fighting Crime by Design The Metropolitan Police Department (MPD) in Washington, D.C., is taking on

an unusual role—that of city planner. In an effort to fi ght crime and increase

public safety, the MPD is actively seeking meetings with developers when new

developments are being designed. If developers take the meetings, police review

plans and make suggestions about how to increase public safety through design.

Developers can decline to meet with police and aren’t required to incorporate law

enforcement’s ideas, but by involving themselves early, the MPD is more likely

to have their ideas incorporated. The district isn’t the only city where police and

developers collaborate—Los Angeles, Seattle and San Diego have also taken

this approach—but the MPD is “ahead of many of its peers” since police get

involved so early, according to The Washington Post. In a recent meeting with

the developer of the Wharf—a planned hub for restaurants, hotels and concerts

along the D.C. waterfront—police recommended eliminating dark nooks and

installing brighter lighting outside restaurants.

Firefi ghters Profi le Buildings A rash of large fi res in abandoned buildings last year has prompted Camden, N.J.,

offi cials to take a preventive measure: The state Bureau of Emergency Response

is sending teams of investigators to inspect abandoned buildings and map any

potential hazards, such as leftover chemicals, combustible materials, mold and

structural issues. From these scouting visits, GIS property profi les are created that

also include information on the construction materials of the building and the nearest

fi re hydrants, hospitals and schools. The profi les will give fi refi ghters detailed data

of what they are dealing with and can be accessed through fi rst responders’ mobile

computer systems or dispatch services. Called Boots on the Ground, the pilot

program launched last December, and so far, 31 abandoned buildings have been

inspected and mapped. The city plans to expand the program next year by taking the

collected data one step further and tracking

down building owners, forcing them to remove

hazards that have been discovered.

Find more ideas forcreative programs atgoverning.com/ideas

AP

IMA

GE

S.C

OM


A state offi cial inspects

an abandoned building

in Camden, N.J.

| IDEA CENTER

63

GOV11_62.indd 63 10/12/12 2:54 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

By Steve Towns

Taming a Tough CommuteSmarter traffi c signals could make life easier for drivers in Washington, D.C.

Problem Solver | TECH TALK

agement technology could strengthen overall emergency response in the nation’s capital. When a relatively mild earth-quake struck the area in 2011, thousands of offi ce workers were evacuated from their buildings. When they attempted to head home, they jammed the streets and brought traffi c to a standstill. The new system could give traffi c managers much

better information about conditions in the city and let them take control of traffi c sig-nals to speed future evacuations.

Mancini says the smart traffi c experi-ment is possible because of Washington, D.C.’s commitment to building a high-speed information network that stretches throughout the city. More than 350 miles of fi ber-optic cable already snake through conduit and plumbing beneath the streets. And the city expects to complete an addi-tional 170 miles of cabling by late next year.

Can technology ease traffi c grid-lock in the nation’s capital? City offi cials in Washington, D.C., are launching a two-year

test to fi nd out.The D.C. metro area regularly turns up

on lists of the nation’s most congested cit-ies. A study from Texas A&M University’s Texas Traffi c Institute estimated that D.C. commuters spent 74 hours stuck in traffi c in 2010—worse than New York, Chicago or Los Angeles.

Rob Mancini, chief technology offi cer for Washington, D.C., thinks smart traffi c management can shave off some of those hours spent commuting and improve public safety too. In 2013, Mancini’s offi ce, along with the D.C. Department of Trans-portation, will begin connecting traffi c sig-nals to existing high-speed network cables that run beneath city streets. Once con-nected to the network, the signals will be equipped with video cameras and Wi-Fi hot spots. The test program will cover traf-fi c lights at 16 intersections.

The program will explore the feasibil-ity of a number of potential improvements, Mancini says. For instance, the city will test whether power can be delivered to stop-lights through the communications net-work—using a technique called “power over Ethernet”—which could keep traffi c signals operating when traditional power lines are down. The city also will experiment with sending live traffi c video to police offi cers and traffi c management centers.

“When we have a problem at a particu-lar intersection, we could use the camera and the Wi-Fi hot spot to send video to the nearest police cruiser and show them where we have an issue,” Mancini says. “Assuming we ultimately go beyond our 16 test blocks, this could mean a much more rapid response to traffi c issues in the city.”

Besides improving the daily commute, broad deployment of smart traffi c man-

“The sky’s the limit when you have this level of connectivity,” Mancini says.

Indeed, he envisions Wi-Fi hot spots at traffi c intersections providing valuable services and applications to D.C. commut-ers while they wait for the lights to change. During emergencies, when cellular net-works often become overloaded with call-ers, drivers stuck in traffi c could still text a

message home, Mancini says. In more rou-tine situations, drivers could simply access free city apps that report traffi c conditions and recommend alternative routes.

It’s unlikely the traffi c management system—no matter how smart it is—will completely eliminate traffi c hassles in one of the nation’s most congested cities. But if it works, the technology could make a tough commute a little easier. G



Changes could allow signals to function during a power outage, and they

could even be used to communicate information to drivers stuck in traffi c.

FLIC

KR

/ALO

VE

SD

C

GOV11_64.indd 64 10/12/12 2:55 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

2012 Election Coverage featuring the latest news and info on state and local races

Expanded state and local news coverage

In-depth coverage on Finance, Management, Health and other key topic areas

THE STATES AND LOCALITIES

You can get your Beltway news anywhere.

We cover all the rest.

governing.com/election

CHECK OUT ELECTION CENTER 2012COVERAGE!

governing.com


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

By Mark Funkhouser

One in every fi ve Americans lives in California or Texas. These, of course, are states with enormous budgets. The

California budget for 2012-13 appropriates $143 billion; Texas’ budget is $172 billion. How these two state governments manage their money matters a lot, even to those of us who do not live in them. And they could not be more diff erent.

California is in the middle of a rebound, with signifi cant job growth. However, the state government remains in bad fi nan-cial shape. Texas, on the other hand, is in the middle of an oil and gas boom and is heading toward a record budget surplus. A comparison of bond ratings for state governments shows California with the lowest rating of any state and Texas with a solid AA rating. A comparison of state gov-ernments’ net assets as of June 30, 2010, shows California with a defi cit of $4.2 bil-lion and Texas with the largest positive balance of any state, $94.9 billion.

To understand how California got where it is, you have to look at the under-lying political structures that drive fi scal policies. Sherri Greenberg, director of the Center for Politics and Governance at the University of Texas at Austin, has been comparing the fi nances of these two states for 20 years. Like other experts, she lays the blame for California’s problems on the heavy use of citizen initiatives and on the longstanding requirement for a two-thirds legislative majority to adopt a budget.

Three recent changes to the rules governing the political game in Califor-nia could have a positive impact on the state’s fi nancial picture. First, the state has adopted a “top two” open primary system. Second, voting districts are no longer gerrymandered to ensure victory for one party. Instead, they are drawn by a citizens’ commission. And third, the two-thirds rule for the Legislature is gone—

ironically, as a result of one of those pesky citizen initiatives. Now, the budget can be adopted by a simple majority vote.

Shaudi Falamaki Fulp, political adviser to the advocacy group Govern for Califor-nia, sees the recent changes to the state’s political system as signifi cant. She thinks that increasing and diversifying voter turnout are key to helping bring about the moderating eff ects needed for better fi s-cal policymaking. Voter turnout in Cali-fornia’s primaries was abysmal this year, which translated into the most partisan voters selecting the primary winners in many legislative districts.

In Texas, as in many states, redistrict-ing is set up to protect incumbents and nearly always is accompanied by a court fi ght. As a result, Greenberg says, the Texas Legislature continues to become more and more partisan. Will that pro-duce California-style gridlock in the Lone Star State? There are likely to be lessons for us all in whether California, which has long been on the cutting edge of cul-tural and social trends, has found a way to cut through the gridlock and allow smart fi nancial decisions to be made. G


Can California Fix Itself?Changes in its political system may point the way for it to meet fi nancial challenges.

Problem Solver | PUBLIC MONEY


Statement of Ownership, Management and Circulation(Required by 39 U.S.C. 3685)

Title of publication: Governing. Publication No.: 1501. Date of fi ling October 1, 2012. Frequency of issue: Monthly No. of

issues published annually: 12. Complete mailing address of known offi ce of publication: 1100 Connecticut Ave. N.W. Suite

1300, Washington DC 20036. Complete mailing address of general business offi ces of publisher: 100 Blue Ravine Road,

Folsom CA 95630. Full names and complete mailing addresses of publisher, editor and managing editor; Publisher: Erin

Waters, 1100 Connecticut Ave. N.W. Suite 1300, Washington DC 20036. Editor: Tod Newcombe, 1100 Connecticut Ave.

N.W. Suite 1300, Washington DC 20036. Managing Editor: Elizabeth Daigneau: 1100 Connecticut Ave. N.W. Suite 1300,

Washington DC 20036. Owner: e.Republic, Inc.: Dennis McKenna and Robert Graves, 100 Blue Ravine Road, Folsom CA

95630. Known bondholders, mortgages and other security holders owning 1 percent or more of the total amount of bonds,

mortgages or other securities, none.

A. Total No. of copies 80,567 81,006

B. Legitimate Paid and/or Requested Distribution

1. Outside County Paid/Requested Mail Subscriptions stated on PS Form 3541 67,964 63,204

2. In-County Paid/Requested Mail Subscriptions stated on Form PS 3541 0 0

3. Sales Through Dealers and Carriers, Street Vendors, Counter

Sales, and Other Paid or Requested Distribution Outside USPS 0 0

4. Requested Copies Distributed by Other Mail Classes Through the USPS 0 0

C. Total Paid and/or Requested Circulation 67,964 63,204

D. Nonrequested Distribution

1. Outside County Nonrequested Copies Stated on PS Form 3541 9,161 12,845

2. In-County Nonrequested Copies Stated on PS Form 3541 0 0

3. Nonrequested Copies Distributed Through the USPS by Other Classes of Mail 0 0

4. Nonrequested Copies Distributed Outside the Mail 628 975

E. Total Nonrequested Distribution 9,789 13,820

F. Total Distribution 77,753 77,024

G. Copies not Distributed 2,814 3,982

H. Total 80,567 81,006

I. Percent Paid and/or Requested Circulation 87.41% 82.06%

I certify that all information furnished on this form is true and complete.

Elizabeth Daigneau, Managing Editor

No. Copies of Single

Issue Published Nearest to Filing Date

Average No. Copies Each

Issue During

Preceding 12 MonthsExtent and Nature of Circulation

PUBLISHER’S STATEMENT

GOV11_70.indd 66 10/16/12 3:18 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Build America Mutual, BAM, is chartered to insure only essential public purpose municipal bonds. These are the bonds

that build important public infrastructure projects, such as schools, roads, bridges, tunnels, public transit systems

and airports, for cities and towns across America. Our job is to provide significant interest cost savings for our insured

members so they can better afford to provide the services and facilities their citizens need. And our ability to achieve that

goal rests on the value of our guaranty to pay 100% of principal and interest, as scheduled, on every bond we insure. It’s a

promise we back with an extremely strong capital base that grows transaction by transaction, and is further protected

by collateralized first loss reinsurance of 15% of each insured issue. That’s why the National League of Cities, which

partners with State Municipal Leagues to serve more than 19,000 cities, villages and towns, has made BAM its preferred

provider of municipal bond insurance. BAM is rated AA/Stable by S&P. To learn more, please go to www.buildamerica.com.

California issuers may not submit materials for consideration, or obtain pricing indications or other policy information, until BAM is licensed in California. © 2012 Build America Mutual


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


Last Look

Patrons of Tycoons Alehouse and Eatery in Duluth, Minn., can ponder municipal legislation while they enjoy a pint: The pub is housed in the historic City Hall. Owners Rod Raymond and Tim Nelson had leased the space to a variety of other small businesses before renovating the building and opening their restaurant last year. “The idea of restoration wasn’t a question of if,” Raymond says. “It was when and how.” The restaurant’s name is a nod to the city’s heyday at the turn of the 20th century, when it’s said that Duluth had more millionaires per capita than anywhere else in the nation. But people don’t need to be tycoons to eat there. It’s more of a burgers-and-beer kind of spot. —Ryan Holeywell

JEFF FREY

governing.com/lastlook

GOV11_68.indd 68 10/12/12 2:57 PM


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100


Editorial Prepress

Other OK to go


Page

®

5 25 50 75 95 100 5 25 50 75 95 100 5 25 50 75 95 100


5 25 50 75 95 100

Documents

PUBLIC OFFICIALS of the YEARPUBLIC OFFICIALS of the YEAR GOV11_Cover.indd 1 10/16/12 2:23 PM Assured Guaranty works with issuers and their advisors who want to structure high quality,