The Price Is Right

April 30, 2007
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GRAND RAPIDS — For some members of the state House the book has become their budgeting bible, as they have quoted chapter and verse from it while trying to create a 2006 financial plan that will wipe out a $357 million deficit and keep the lights on in Michigan.

Much of what those House members do will impact counties, cities and townships across the state, and local public officials — along with business owners who have a stake in public funding — will have a chance to meet a co-author of the single hottest commodity to hit state government since representatives first got a whiff of tobacco-settlement money.

Peter Hutchinson, who co-wrote “The Price of Government” with David Osborne, is one of the keynote speakers at next week’s Strategic Issues Series — the 16th seminar in the balanced series that this time will look at how the book’s mantra, described as results-based budgeting, is affecting public finances.

Hutchinson, founder of The Public Strategies Group Inc., will be joined on the dais at the Gerald R. Ford Museum next Wednesday by Jim Chrisinger from the Iowa Department of Management, which just may lead the nation in the pricing practice, and by state Rep. Jerry Kooiman, a Grand Rapids Republican who sits on the House Appropriations Committee and is a leading advocate of the Hutchinson-Osborne method.

But state House members like Kooiman aren’t the book’s only supporters, as the city and the county have integrated concepts from the manuscript into their budgeting processes.

Kent County has used the advice to help with nagging cyclical funding issues, and hopes to find the guidance to head off two upcoming financial problems that are worth more than $20 million annually. First, the county’s millage for its correctional facility will run its course in 2009. Then, two years later, the funding plan that is currently replacing state revenue sharing to counties will expire.

“Right now, we use about $11 million from that millage for operations of the correctional facility, and we stand a chance to lose the $10 million to $11 million in revenue sharing should that not be restored by the state,” said County Administrator and Controller Daryl Delabbio.

“When you think about 2011, it might seem like it’s a long way away, but it’s not. It’s right around the corner and that is something we have to be prepared to address,” he added.

Delabbio and three key members of his fiscal team — Robert White, Mary Swanson and Jim Day — will attend the free session that begins at 7:30 a.m. and ends at 10 a.m. The county has established a work group, a panel of about 15 department heads and staffers led by Swanson, that bases its budget planning on principles in the book.

The city has also taken the book’s advice to heart and has built eight separate financial planning teams from the pages of its well-worn copies.

“We have been earnest about following the concepts of the book in our budgeting for the city. We made a very conscientious attempt to ascertain what it is our citizens wish for us to provide in terms of services, and we tried to jump in with both feet to the approach that was suggested by Mr. Hutchinson and Mr. Osborne,” said City Manager Kurt Kimball.

“So you ought to really think of the city of Grand Rapids as you think of the state House of Representatives, as both entities have really made a genuine effort to rethink and reinvent how we go about public budgeting. We really could be part of the panel ourselves, because we have lessons we have learned and intend to persevere with this approach for the upcoming financial planning period,” he added.

Kimball, Deputy City Manager Eric DeLong, Assistant City Manager Greg Sundstrom and up to three others in the city’s fiscal loop will attend the seminar.

“We’ll probably have a half-dozen or so people there,” said Kimball.

A good-sized audience of public officials, educators and business people are expected to hear Hutchinson, Chrisinger and Kooiman speak and then take questions on budget matters. Although Delabbio hasn’t heard Hutchinson, he did meet Osborne at a two-day seminar in Chicago about eight years ago when his solo book “Banishing Bureaucracy” was popular.

“Who did I run into then? Kurt Kimball and Eric DeLong,” he said, smiling.

Delabbio added that he and his staff don’t go to many events like next week’s “Business Impact and Government Spending” seminar. The last fiscal conference he attended, though, gave him what he called a “nugget” and led to the county saving about $400,000 a year on its budget for the jail and juvenile detention center.

“We try to use discretion in attending conferences because we’re not out and about a lot,” he said. “But if you can pick up just one nugget that you might not even think of before you attend, then when you get there — boom, it pays off.”    

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