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participants' responses to this interview.
Kiedrowski, Humphrey School of Civic Affairs,
Gunyou, Minnetonka City Manager
Civic Caucus, 8301
Creekside Circle #920, Bloomington, MN 55437
July 28, 2011
Verne Johnson (chair), David Broden, Janis Clay, Paul Gilje, Ted Kolderie,
Dan Loritz, Tim McDonald (phone), Wayne Popham (phone)
Summary of meeting:
Two former state finance commissioners and current advocates for public
service reform describe a need for public managers and administrators to
be given the freedom and incentive to innovate. Those providing the
services are most likely to identify new ways of doing things and have the
final control over whether changes will be implemented well. State policy
should be to set the goals for public services and then to step aside
allowing local authorities to determine how to meet those goals.
Welcome and introductions
is a Senior Fellow in the Public and Nonprofit Leadership Center at the
University of Minnesota's Humphrey School of Public Affairs.
Before coming to the
University in 2004, Kiedrowski was Executive Vice President of Wells Fargo
and Company (successor to Norwest Corporation). He was responsible for
leading institutional trust, institutional brokerage, and trust operations
for the merged Norwest / Wells Fargo organization.
Kiedrowski served as
Minnesota Deputy Commissioner and Commissioner of Finance from 1983 to
1987 and budget director for the City of Minneapolis from 1978 to1982. He
also served as a researcher and committee administrator with the Minnesota
State Senate between 1973 and 1977.
Kiedrowski earned a
B.S.M.E. in industrial engineering from the University of Minnesota and a
master of arts from the University's School of Public Affairs. He also
earned an Ed.D. from St. Mary's University of Minnesota.
Manager of Minnetonka, a large suburban community recognized as one of the
best-run cities in the nation. He served as Minnesota's Commissioner of
Finance from 1991 to 1995.
Gunyou also served as
the first Finance Director for the City of Minneapolis under Mayor Don
Fraser. During his time with the city Gunyou was honored with the United
States Conference of Mayors' Financial Leadership award, and was named the
best City Finance Officer in the country by City and State Magazine.
He is a former partner
with a large economic consulting firm, an executive at Minnesota Public
Radio, and a former middle school math and history teacher. He is a
graduate of the United States Air Force Academy, and has master's degrees
in economics and public administration from UCLA and the University of
I have been working on redesign issues for 18 months at the Humphrey
School of Public Affairs. During that time I have worked with local
government officials in cities, counties, and school districts to develop
over 100 examples of redesign of local government services (see a report
on the HHH website:
I have been working on innovation primarily at the local level since
leaving the state, both as a manager and on various committees.
Those who provide the services should be the ones to redesign them.
One of the things we have done in Minnetonka is to spend most of our time
in recent years developing and implementing service plans to deal with the
challenges of the "new normal." My theory is that the people who are
actually running the place should design and administer the services. When
we developed our most recent twenty-year comprehensive plan, we laid out
the future trends and challenges, and then let our middle managers come up
with the strategies to meet our vision-we didn't come in with proscriptive
directives they had to follow.
result was a lot of very specific business decisions about how we were
going to provide services within the resources we would have, given the
evolving demographics. Let me give you an example. Like most suburban
areas, we're becoming an older city. We think there's value in maintaining
age diversity, so our recreational facilities and programs are emphasizing
family-related activities. We recently updated our Williston Center to
include a large indoor play structure and a zero-depth wading pool to
serve children. As a result, our family memberships increased from 25% of
the total to 40% in just a few months.
also expanding our collaborative arrangements with neighboring cities. We
have long operated a joint recreation program with Hopkins. We now share
inspectors with St. Louis Park, and provide those services to many smaller
communities. We initiated and spun off an affordable housing land trust
that serves the western suburbs. A group of western city managers get
together at least quarterly to discuss "things we can do together."
innovations are not huge in themselves, but they can be quite
Look to bureaucrats and middle managers for leadership.
I've got to think that bureaucrats are well intentioned. Most of the
change occurs in the middle of the organization-it's not at the top, and
it's not at the level of the secretaries. There are plenty of ideas for
change out there, but there need to be incentives for people to make
changes. There are hundreds of examples we discuss in my report, from
wastewater treatment being shared by three communities to improved
Local officials have always been in the business of coming up with good
ideas. The laboratories of democracy aren't the exclusive province of
states - far more innovation occurs in cities, counties and schools.
School districts are involved in joint purchasing because it's a good
business practice-they don't do it because the state tells them to.
talked a lot about the "new normal" in recent years. At Minnetonka, we
made all the necessary downsizing decisions back in 2009 to get well ahead
of the wave. And we did it by "repositioning" our operations in such a way
to allow us to meet the changing needs of our community-not through
arbitrary early retirement and furlough incentives, but through specific
reorganizational strategies. As a result, we strategically and permanently
cut our staffing by six percent, coincidentally the same downsizing done
by private businesses nationwide.
The state gets in the way of local innovation.
to move the redesign discussion at the Legislature out of the area of cost
cutting to productivity and quality increases. It has been frustrating. We
don't run our government to measure systems and performance; we run the
government for political returns.
Those of us that are actually providing services at the local level often
find that the state gets in the way more than they provide any support for
service reform. Here's one example. My city provides health inspection
services under contract for Wayzata. The state Health Department is fine
with that arrangement for restaurants, but the state Agriculture
Department refused to approve the same arrangement for groceries - simply
because they would lose the fee revenue. We could have provided twice the
level of inspections with more qualified inspectors and responded on a
minute's notice to local emergencies, but the state bureaucrats didn't
want to lose the fee revenue.
example of state policy disrupting the local managers is the policy
allowing open enrollment among K-12 school districts.
I think there's also a downside to such competition. Faced with a
declining student population and the attendant decline in state formula
funding, the Minnetonka School District has been extremely successful in
growing their attendance through open enrollment. While that's certainly
good for the Minnetonka school district's budget, it occurred at the
expense of other public districts. I'm not sure that the result of the
interaction between the school per-head funding formulas and open
enrollment policy is necessarily in the best overall public interest.
Implementation works best if driven from the inside.
no shortage of ideas, there's a shortage of implementation. I believe that
the real problem is how to implement the ideas, and implementation has to
be driven by the people inside the organizations - not the policy
Regardless of what a newly elected official might want to achieve, the
bureaucracy ultimately decides everything - whether anything eventually
gets done. The bureaucracy always wins in a question over whether an
innovation will work. That's not necessarily bad. I always encourage
policy officials to meet with those who are going to be responsible for
actually implementing the change to make sure their visions are aligned.
That's how you can get things done - two willing partners.
tried to implement a statewide performance budgeting system as Finance
Commissioner, the legislative auditor declared that it didn't work,
because the Legislature didn't use the data to make decisions. They missed
the fact that it was used by many departments to make their
budgeting decisions. Change is more often than not accomplished at the
There is disagreement on the nature of the problem.
Another major problem is that there is little agreement on what exactly
the problem is that's to be solved. There are still those who believe that
we just need to tax or that we just need to cut our way out of this-or,
that a combination is sufficient. We believe that there needs to be
redesign too. Until we get some agreement we will have a difficult time
The state should set outcomes, and then get out of the way
What would you most like to have from the state?
To get out of the way. Seriously.
state needs to express the desired outcomes clearly, and then get out of
the way. Let people figure out how to do it locally. Let the public
officials learn how to be policy officials and then let the managers
manage. I've got two students working with the Legislature's redesign
efforts; I look at the list they're working on and it does not bode well
for encouraging innovation at the local level.
state define the problem, define the goals, and ask where are the
state-created barriers impeding the attainment of those goals. We define
problems as not enough roads. The problem is moving people from point A to
point B while avoiding the state-imposed roadblocks.
another challenge at the local level. We're more often than not survivors;
we don't innovate by taking risks. Or we innovate as politicians do-we
produce what looks good on our resumes, rather than what might have been
truly transformative, so that we can move onto the next job - or to the
next elective office.
The governance systems nurturing consensus are broken.
Our systems for finding a consensus have totally broken down. How are you
going to do any big system reforms without Republicans and Democrats
We first have to "stabilize the patient," so to speak. We are so far away
from stabilizing the patient - by structurally balancing the state budget
- that it's difficult to focus on the necessary service reform. In fact,
we've violated the Hippocratic oath this session, the part that
admonishes: "first do no harm."
to stress that the focus for redesign needs to be on middle management.
It's through the internal workings of government agencies that reform
happens.The state typically defines the problem, then from on high, tries
to tell management what to do.The state needs to do a far better job in
collectively defining the problems we are trying to solve, and then have
more people at the implementation levels work out the solutions. There is
an intrinsic incentive for dedicated public servants to do problem solving
well, and we need to more effectively engage them in that process.
have a message at all it is that we have to create a better context, a
better communication of expectations, so people know it is okay to
environment tends to be political-there is a bias on the part of the
bureaucracy not to take risk, because they will get their heads chopped
off if they do something wrong.
interesting thing I've found is the more local you get in government the
more innovation there will be. Because these are people that are elected
locally, they work together to get things done.