Getting Down to Business
Charlie Ryan stressed that the city of Springfield is not Ford Motor Co. "Were not making cars, or widgets, or anything else," he told BusinessWest. "Were educating children, were providing public safety, and were offering basic services. Thats not the same as running a company; some of the rules that apply to business dont apply to a municipality."
That said, Ryan, the citys 76-year-old mayor who returned to City Hall in January 36 years after he left it following three terms as Springfields top executive, believes his administration can, indeed, borrow lessons from the corporate world.
At the very least, it can benefit from its expertise and competitive nature, said Ryan, who has embarked on an intriguing initiative to involve members of regions business community in his multi-faceted effort to return the city to sound fiscal health and, in general, enable it to operate more efficiently.
"The business community consists of men and women who are, out of necessity, competitive," he said. "They wouldnt survive if they werent successful in beating the competition. Whatever attributes make them competitive persistence, tenacity, imagination, and others are very rare indeed.
"To whatever extent these individuals turn their attention to our problems," he continued, "were going to benefit."
Specifics of the plan are still coming together, and ordinances for the program must be drafted and approved by the City Council. But what is known is that Ryan wants to tap the talents of area business leaders to address some of the citys many ills and he believes that free assistance is crucial to the citys efforts to right its financial ship.
For starters, Ryan intends to make use of three individuals from MassMutual in what he calls a "loaned-executive program." These volunteers will be reviewing various city departments with an eye toward creating efficiencies.
Once the 90-day review process is completed, the next, still-evolving stage of the process will take place.
Russell Denver, president of the Affiliated Chambers of Commerce of Greater Springfield, told BusinessWest that Ryan approached the Chamber and the Springfield Business Development Council after last falls election and asked about the recruitment of business volunteers to work on projects within City Hall. Denver said that to date, he has enlisted more than 100 such individuals who are willing to offer some form of assistance in project-specific situations.
"This is a great opportunity for the city to take advantage of some free consulting," he said, noting that, while that word consulting is the one being tossed around by those involved with this initiative, he prefers to say that business leaders would be partnering with city department heads and other employees.
But will this work? Can the private sector and public sector come together and achieve progress? Some city councilors have questioned whether department heads will feel threatened by the intrusion of business leaders, while others have expressed concern about chain-of-command and collective-bargaining issues.
But both Ryan and Denver believe there will be collaboration, not intrusion, and that the business communitys help is needed to fix the citys bottom line and enable departments to provide better service to residents.
"Fundamental things are not being done, or not done as well as they could be," said the mayor of day-to-day activities at City Hall. "And this is everywhere I look."
Ryan acknowledged that his plans to enlist the business community are unusual and rather extraordinary but those are some of the same words he would use to describe the citys current situation.
Springfield is getting plenty of ink these days, and most of it isnt good. The headline on the cover of the winter issue of Commonwealth magazine, put out by the Mass. Institute for a New Commonwealth (MassInc.), screams, Springfield: Has It Hit Bottom?
Without directly answering that question, Ryan said the citys fiscal state is precarious to say the least. He told BusinessWest that the city can generate about $3 million in new tax revenues this year under the guidelines of Proposition 2 1/2, but hes already looking at an additional $6 million in debt service and $6 million to $7 million in additional health insurance expenses. "We just continue to lose ground."
During last falls campaign, Ryan dared to utter the R-word receivership and was accused by rival Linda Melconian of trying to scare voters and greatly exaggerating the problem.
He insists that he was doing neither, and a month after taking office, he is using the same language.
"I dont know if we can head this off," he said, referring to the prospect of receivership. "Id like to say that we can, but I just dont know the news keeps getting worse."
Indeed, in the budget he outlined late last month, Gov. Mitt Romney calls for level funding of aid to cities and towns, this at a time when Ryan is begging for a real increase.
The mayor said some people understand and appreciate the bind Springfield finds itself in, but many dont. "When we end a contract or dont fund a certain position, there still seems to be a lack of understanding as to why those things are happening," he said. "The answer is simple; we cant afford those things anymore."
Using a decidedly somber tone, Ryan described a collective bargaining session that occurred just prior to his meeting with BusinessWest. Most City Hall employees are overdue for raises, said the mayor, noting that the city simply doesnt have the $4 million needed to pay for contracted pay hikes. "In a few months, were going to be starting a new fiscal year," he noted. "And unless a miracle happens, were not going to have the $3 million to $4 million to pay for the next round of increases. The IOUs keep piling up."
Ryan isnt looking for miracles from the business community. He is, however, looking for some good advice, the kind of consulting that the city couldnt afford if it had to pay for it.
Denver believes the business community can provide that brand of help, and wants to, because it understands that a healthy Springfield is vital to the prospects of further economic development in the Pioneer Valley.
"They know how important it is for Springfield to turn itself around," he said. "Thats why youre seeing so many people come forward and volunteer their services."
In Good Company
Ryan told BusinessWest that he had several discussions last fall with MassMutual CEO Robert OConnell about ways the financial services giant might assist the city. One byproduct of those discussions is the planned loaned-executive program, which could commence over the next several weeks.
Plans subject to approval by the council call for MassMutuals involvement to be led by Theresa H. Forde, senior vice president of sales and marketing, and John F. Abbott, vice president of state government relations and policy holder relations. They will meet with department heads and other employees to review operations and identify areas where changes can be made and improvement realized.
Ryan, who stressed to the City Council that the project was not a witch hunt, said that the MassMutual executives will be working with him in what he called a "dynamic process that will identify better ways for us to carry out our business.
"Its fundamental that people understand that this is not a study by the MassMutual people that will be presented to me at the end of 90 days," he explained. "They will work, day by day, in concert with me, as together we make this very necessary analysis and identify the strengths and weaknesses of our city operation."
The hope is that the department-by-department review will yield strategies that do not involve additional personnel or other expenditures.
"We want to focus on remedies that are practical and affordable," Ryan said. "Im sure there will be some where they say, you could do a better job if you had 30 more police officers. Well, right now, thats not an option we dont have the money to hire 30 more police officers.
"What we have to do is look at what our economic capacity is and, within those significant constraints, try and improve our effectiveness," he continued. "And Im sure there will be a lot that we can do, even with our empty pocketbook."
Once individual remedies have been identified, the city could call on some of the companies the Chamber has enlisted to take on specific projects. For example, area banks could assist with cash-flow or debt-refinancing issues, said Denver, while property-management companies may be able to identify economies of scale or other means of reducing costs.
Law firms may offer pro-bono services in a number of areas, said Denver, including the collection of overdue property taxes or the taking of properties. Meanwhile, accounting firms, marketing agencies, staffing companies, and the areas colleges have services they can offer.
Even retail outlets can be of assistance, he explained, noting that such businesses know a lot about inventory control and customer service.
Denver told BusinessWest that, in early discussions with the mayor on the subject of business volunteers, Ryan focused on the broad subject of productivity.
"In our local economy, the numbers are improving, but unemployment is not, because companies are increasing productivity thats why theyre calling this a jobless recovery," said Denver. "Companies are doing more with the same number of people, or fewer, and this is what intrigues the mayor."
While he acknowledged that there are vast differences in how a company and a municipality are managed, Denver said he thought area business leaders can make whatever adjustments are necessary and make some solid contributions to the kind of progress the mayor is seeking.
"Youve already seen a number of companies lend practical assistance to the School Department and to individual schools," said Denver, listing MassMutual, American Saw & Mfg., and other businesses in the same category. "This is the same thing, but on a much larger scale.
"Besides," he continued, "a number of business people have served on boards or commissions in the communities they live in, and some have held elected office; they know how a municipality operates."
When asked to what extent he will utilize the business community, Ryan said, "in whatever legitimate and responsible ways I can."
He told BusinessWest that it is as important for business leaders to help as it is for the city to seek their assistance.
"They have a lot at stake," he said. "It is intolerable that the main city in Western Mass. continues to limp; we need a strong, vital central city."
View Toward Progress
Gesturing to the thick layer of crud on the outside of the windows of his second-floor office in City Wall, one that appeared to be years in the making, Ryan joked that he wouldnt mind if the Chamber could get a window-cleaning company to do some "consulting" work.
If those business executives who do contribute some time and energy to the citys management can help devise strategies to improve services and make progress in the quest for better fiscal health, then Ryan might enjoy the view out the windows in both a literal and figurative sense.
George OBrien can be reached at [email protected]