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Small-scale government, big problems and scrappy solutions

By Mark Funkhouser

Last month I got to see once again that while major metropolitan centers are often seen as hubs of municipal innovation, the spirit of creativity extends beyond them into the smaller cities, towns and counties throughout America.


During a roundtable event we recently hosted in State College, Pennsylvania, local government leaders discussed several compelling, resourceful and cost-effective approaches, showing that necessity indeed spurs invention.


Pennsylvania is subdivided into 2,560 townships, boroughs and cities, and that fragmentation presents a challenge when it comes to efficient operation of municipal services. Jurisdictions are pushed to find collaborative workarounds and fiscal solutions, and they offer lessons that are applicable on a national scale.


Like pearls on a string, small to midsize Pennsylvania municipalities retain a level of autonomy and individual character that fosters community cohesion. But making the most of available resources while avoiding unsustainable spending presents a delicate balancing act.


Interestingly, the sense of local pride and solidarity also seems to be key in encouraging partnerships and shared-service models.


The Borough of Dormont, with a population of a bit more than 8,100, has strategically partnered with its neighboring Allegheny County municipality, Mt. Lebanon, to streamline and enhance its financial management. This resulted in a win-win deal for both jurisdictions. The decision to join forces was born from an HR challenge: Lean-staffed Dormont had to terminate its only bookkeeper, who had been misappropriating funds. After initial difficulty in recruiting a replacement, Dormont Borough Manager Ben Estell approached his colleagues in Mt. Lebanon for assistance.


They worked out a collaborative concept by which Dormont outsources specific bookkeeping, accounting and reporting functions to its larger neighbor. The payment Dormont contributes for those services is less than what the borough had been expending for a full-time employee. The additional funds Mt. Lebanon receives pay for a new part-time staffer, adding capacity to their combined operation.


Consolidating their systems (while keeping key budget oversight separate) has enabled both localities to purchase financial-processing software via a joint procurement, effectively unlocking additional value for both jurisdictions. In addition to saving money and modernizing its accounting technology, this has allowed Dormont to implement a crucial separation of duties for improved audit oversight.


Another positive effect of their partnership is it strengthens ties between the two communities and builds shared trust in their governments, illustrating the broader benefits of collective strategies.


How the necessity to come up with scrappy solutions can foster a stronger sense of community is also illustrated in Dormont’s focus on employee benefits to compete for talent.


Staffing remains a persistent issue for municipalities nationwide. Rather than putting pressure on limited revenues to pay for higher salaries, Dormont made pioneering changes to its employee benefits to reward and retain existing employees and drive recruitment efforts.


One of the most impactful changes was the broad and holistic paid family leave policy the borough launched. It covers four weeks of parental leave in a range of circumstances (including adoption or fostering as well as caring for a sick loved one or supporting family during military-service deployment). Following this initial period, the subsequent eight weeks are covered at two-thirds pay, with the flexibility for employees to bridge the gap using their remaining standard paid leave. Crucially, upon returning to work for six months, Dormont commits to repaying the one-third difference or reinstating the standard leave used to close this gap. This thoughtful approach not only facilitates necessary family care but also incentivizes employees to return to work with a renewed sense of support.


The loss of a child prompted Ben Estell to also update Dormont’s bereavement leave policy. The borough drew inspiration from as far as New Zealand for a new and comprehensive standard that sets Dormont apart from other employers in the region: Borough employees receive four weeks of paid bereavement leave (which also covers the loss of a child due to stillbirth) and two weeks of paid leave for employees experiencing domestic violence.


Investing in employee wellbeing is an often overlooked strategy for retention as well as recruitment. Dormont’s generous family leave policies facilitate the longevity of the employee-employer relationship. “We advertise the benefits in our job ads,” notes Ben Estell. “It’s one of the reasons people want to work for us. It’s hanging a flag out that says: We treat you with compassion and like a human being.”


If the pressure to compete for talent is high for smaller, cash-strapped localities, so is the need to skillfully manage limited resources. Oftentimes, innovative solutions come with a hefty price tag for hiring analysts, financial advisers, investing in up-to-date technology or bringing in external consultants. But the notion that “you have to spend money to make money” is dispelled when you look toward Centre County, Pennsylvania, where creativity meets fiscal responsibility.


With a population of 150,000, Centre County relies on what County Commissioner Mark Higgins labeled “extreme financial management” to ensure that taxpayer money is put to work. The county utilizes laddered certificates of deposit to boost liquidity and provide financial risk mitigation. By taking this money-savvy approach to managing its finances, the county has not had a single property reassessment since 1997 and rate increases have never breached 2% in a single year.


Another creative investment the county has implemented, which supports both fiscal as well as environmental sustainability, is utilizing solar power for its correctional facilities. “The electric bill at the Centre County Correctional Facility had been $120,000 yearly, and we expected an annual bill of $5,000 once the solar array went online, explained County Commissioner Mark Higgins. “The actual electric bill over the last two years at the Centre County Correctional Facility has been negative $35,000 and negative $34,000.” Those credits, he added, have been applied to the electric bill of the nearby Centre County Willowbank Administrative Building, and “we also receive Solar Renewable Energy Certificates (SRECs) credits that we sell for additional revenue.” The county is projected to save over $8 million throughout the solar array’s usable life.


Investing in community and shared services brings dividends beyond financial savings.


At the roundtable event, Williamsport, Pennsylvania, Mayor Derek Slaughter described efforts in his small city: “We are starting to invest in properties, exploring the possibility of a boys and girls club, and looking at a holistic approach from housing to early childhood education and childcare. We have been fortunate in Williamsport to do a lot of relationship rebuilding after the previous administration’s mismanagement of city dollars. In spite of that, we are able to talk to agencies and make things happen in the community by rebuilding trust. You do that by investing.”


Despite the dispiriting national narrative about government and its capacity to provide for the collective good, there are thousands of local officials across the country making sound decisions and running efficient, effective and equitable governments.


This rings true in my interviews with local officials and especially in our roundtable discussions. When the Pennsylvania session concluded, I left energized, inspired and grateful to be doing the work that I do.


Please reach out if you have your own “scrappy solution” to share about the challenges faced by local governments.

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