Grand Rapids' mandate: less money, more innovation

In Grand Rapids, where the UPM Blandin paper mill casts a long shadow over the Mississippi River and fills the sky with puffy white steam, the city government is on a jag to use less paper.

It's switched to electronic time cards and payroll management. A software program called Cityworks keeps track of potholes that need to be filled and other public works tasks.

And rather than printing hundreds of pages of information before each city council meeting, clerks and council members check into an online system called Legistar.

"We used to have huge binders for each meeting that were hand delivered," says City Administrator Shawn Gillen. "Now it's electronic and emailed out."

What used to take a day now takes about an hour.

"It saves us a half a person," he says. "We're shifting the paradigm a bit."

It helps that the staff and citizens in Grand Rapids, a city of around 10,000, are tech savvy, with fiber optic cable running to each and every doorstep. But Gillen admits, there is a "little bit of irony" to a city built on paper going paperless.

It's not as if they had a choice.

Grand Rapids -- like cities across Minnesota -- is grappling with a reduced budget born of a lousy economy coupled with years of reduced local government aid.

The difference is that, by a number of measures, Grand Rapids seems to be faring pretty well. The city recently earned an A1 rating from Moody's. It has permanently trimmed its annual expenditures budget by $1.1 million without major layoffs or reductions in service. And, on top of it all, it has reduced the city's property tax rate.

The approach is rooted in pragmatism, involving negotiation, investment, and long-term strategic thinking. It's not glamorous stuff. "Can you imagine how boring this would be if we didn't have a crisis?" asks Gillen.

THE MAN WITH THE PLAN

Gillen's office is festooned with memorabilia marking important moments in his life, a photo with Chicago Mayor Richard M. Daley, another with George H.W. Bush. Above his desk, he's got a framed jersey from when he was a University of Iowa Hawkeye offensive lineman.

"'Scratch where it itches,' is what my coach, Hayden Fry, used to say," says Gillen, who wears a chunky Rose Bowl ring on his right hand. When he first started out in city government, as mayor of his hometown of Monmouth, Illinois, "That was how I approached an organization. That's all I had to rely on early on. Not being afraid of a challenge."

Since then, Gillen has supplemented his English degree with a masters and doctorate in public administration. He served as the council administrator in Lexington, Ky., before coming to Grand Rapids three and a half years ago, arriving just in time for the first round of cuts to local government aid, to the tune of $500,000.

Gillen recalls the mandate he received from the city council: "We don't want to raise property taxes, nor do we want to reduce services." Gillen had his itch.

He sat down with others in the city and -- with the goal of forever eliminating state Local Government Aid money from the operating budget -- came up with a plan that involved Grand Rapids borrowing money from itself to invest and prepare for the future.

Then he sought ways to operate more leanly. He went to the various department heads and said, "We have to do things differently, not just the same old way."

This methodical approach is signature Gillen, says Gary Carlson, intergovernmental relations director for the League of Minnesota Cities, where Gillen serves on the board of directors.

"He challenges almost any long-held belief and I applaud him for it. It takes talent to be able to challenge people's preconceived notions and not make them suspicious of you."

Gillen has worked with the League on legislation that would allow cities greater latitude in implementing revenue-generating sales taxes.

"He's a real refreshing guy to talk with," says Carlson. "He expects a lot. Not only does he think outside the box, but he expects people to make decisions and take action."

HOW THEY DID IT

One of the first steps in Grand Rapids was to offer public employees an early retirement package, thus avoiding layoffs while reducing the workforce.

Twelve people were eligible and 10 retired. Four positions were refilled (and another, unrelated to the retirement package, went unfilled), for a total loss of seven employees out of a workforce of 75 full-time workers.

In order to keep the city running with 10 percent fewer workers, Grand Rapids began cross-training its employees (the airport manager also runs the cemetery) so people could switch between departments and fill gaps in workload.

"People really responded," recalls Gillen. "But this wasn't all cheery and rosy. It was tough. People had to shift what they did. It was scary. We're still going through some of that."

In addition, the city came up with a plan to reduce employee health care costs. It switched to a much cheaper high-deductible plan and then paid the employee deductibles. The employees had the same or better benefits, says Gillen, while "we saw a 40 percent reduction in what we paid. We saved $1,000 per employee."

By Gillen's estimate, the plan will save the city millions of dollars over the next decade.

Even union leaders seem to be on board with the changes. Dan Kingsley, an area business representative with Local 49, which represents the city's public works employees, says, "When cuts are made and jobs are eliminated, they aren't necessarily real happy about it. But we've got a great group of people over there and they understand the situation with the economy, that everybody has to do more with less."

He offers high praise for Gillen, who he describes as "innovative" and full of fresh ideas. "He's up front with us when things are coming up," says Kingsley. "He has a very open door policy. Actually, I use Grand Rapids as an example for how things should go when dealing with other entities we have. Grand Rapids is one of the cleanest and most well-run cities out there."

WHIZ BANG GADGETRY

Beyond staffing changes, the city invested in time-saving technology, including a big, yellow $320,000 Mack truck. Not only can it plow great swaths of road at a time, it can spread salt and the accompanying de-icing liquid, which used to take two public works vehicles following each other in a tiny convoy.

In addition, it can be rather quickly transformed into a snow hauler, with three times the capacity of the older trucks, resulting in fewer dump trips. It does all this with one chassis, meaning reduced maintenance costs.

It's a good example of an investment now saving money over the long haul. "The truck will pay for itself in three years," says Public Works Director Jeff Davies. "If you are doing things the same way you were five years ago, you're a dinosaur."

Not all the technological advances are so flashy. Up in the corner of the Grand Rapids city council chamber, there is a sensor that can tell when nobody's around. If the room is empty for 15 minutes, the lights go off and the temperature drops to 65 degrees. When a person walks in again, the lights and heat come up gradually to avoid a costly spike in power use.

It's part of a three-year-old system that saves energy in the city's main municipal buildings.

From a laptop, Ron Edminster, who leads facilities maintenance, can "monitor all three buildings, the thermostat, every piece of equipment. I can control the thermostat in the buildings no matter where I'm at," he says, "even at my cabin or on my boat."

The system, he says, which cost $98,000 (minus a couple of rebates) reduces energy costs by 25 percent and will be paid off this spring "I get a lot of latitude with my ideas," says Edminster, "which is nice."

By fall, the city plans to have another new energy system in place, which would transform millions of gallons of 120-degree pulp waste from the paper mill into heat for the library.

Partially funded by Iron Range Resources and the Grand-Rapids-based Blandin Foundation (founded in 1941 by Charles Blandin of Blandin Paper), it's expected to save the city up to $30,000 per year in gas bills, thus paying for itself in four years.

"We are just solving our own problem here," says Gillen. "We've been dealt a hand, so we are going to do what we can to fix the issue." He lavishes praise on the city council and the department heads, who "could have retrenched themselves, but didn't."

The city also benefits from the presence of a major employer, from its status as a consumer hub and from the Blandin Foundation.

"We would like to be a model city for how to do things," he says. "But our goal is to fix our problem. The problem isn't unique, but the solutions have to be. If you let cities be free to innovate and create, you are going save more money. Cities do it better."

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