South Bend, Indiana, in 2012, the City Was Struggling to Overcome Its Image As a Dying Community
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REBOOTING A RUST BELT CITY: AN INNOVATION OFFICE FOR SOUTH BEND, 2013 – 2018 SYNOPSIS When Pete Buttigieg became mayor of South Bend, Indiana, in 2012, the city was struggling to overcome its image as a dying community. More than a thousand abandoned homes blighted urban neighborhoods, and the unemployment rate was more than 10%. Although these problems had their roots in the changing structure of the US economy, Buttigieg said he believed that more-efficient and more-effective government could help the city attract new businesses and residents, charting a path forward. In 2013, he hired Santiago Garces, a 2011 graduate of nearby University of Notre Dame, to create a new office that would identify opportunities for improving city operations and saving money. On a tight budget, Garces assembled a small team of business analysts, who used new technologies to help streamline and modernize the city’s code enforcement department, greatly accelerating the process of dealing with abandoned homes. Garces’s team then took on dozens of other projects to improve service delivery while also consolidating the city’s information technology resources, including outsourcing certain services to cut costs. The unit Garces created produced millions of dollars in savings during its first years and helped the mayor achieve some of his top policy goals. Tristan Dreisbach drafted this case study based on interviews he and Steven S. Strauss, John L. Weinberg/Goldman Sachs & Co. Visiting Professor at Princeton University, conducted in South Bend, Indiana in July 2018. Case published September 2018. INTRODUCTION then to Oxford as a Rhodes Scholar, he thought “Innovation and technology are not the that more-efficient and -effective city government same thing,” Mayor Pete Buttigieg said in mid- could help his administration address some of the 2018, as he sat in his 14th-floor office biggest problems the community faced. overlooking downtown South Bend, Indiana. South Bend was once a thriving city with a “This isn’t about just looking for technology. I healthy economy. Its location on a railroad line can go to the US Conference of Mayors and between Detroit and Chicago had made it an come back with business cards of 200 people who attractive site for industry in the first half of the would be happy to sell us all kinds of twentieth century. But like many urban centers in technologies.” the US Midwest, the area lost industrial jobs in Six years earlier, at age 30, Buttigieg took the decades following World War II. The office as the youngest mayor of any US city with a Studebaker automotive plant, once the city’s population greater than 100,000. A hometown major employer, closed in the 1960s. Jobs boy who had gone east to study at Harvard and disappeared and the unemployment rate hit nearly ISS is program of the Woodrow Wilson School of Public and International Affairs: successfulsocieties.princeton.edu. ISS invites readers to share feedback and information on how these cases are being used: [email protected]. © 2018, Trustees of Princeton University. This case study is made available under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. Tristan Dreisbach Innovations for Successful Societies 10%. From 1960 to 2012, the number of Tribune reporter. “You're seeing these houses residents shrank by almost 25%, falling to trashed out and the copper pipes and electrical 100,000 from 130,000. Then the 2008 recession cords being stolen.”2 hit hard, and in 2010, Newsweek magazine declared Shortly after taking office in 2012, Buttigieg South Bend one of “America's Dying Cities.”1 established a task force to determine the precise Buttigieg viewed innovation as a tool for extent of the problem. In early 2013, the task tackling those problems rather than as an end in force reported that there were 1,900 vacant itself. He sought new approaches to city homes—vacant meaning that no one had lived in government that would help him achieve his the houses for at least 90 days. Of that number, policy priorities. 1,275 qualified as abandoned properties because In 2013, to spearhead his initiatives, Buttigieg they had code violations that had not been recruited Santiago Garces, a native of Colombia addressed for at least 30 days.3 After releasing the who had recently earned a master’s degree in report, Buttigieg made a public commitment to entrepreneurship in science, engineering, and rehabilitate or tear down 1,000 abandoned homes technology from the University of Notre Dame. within 1,000 days—by November 2015. But to With virtually no resources and no road map, achieve that goal and other goals—such as setting Garces and Buttigieg set out to improve the way up a performance management system for city local government served the interests of citizens, departments, helping the police department beginning with reducing urban blight. develop a strategy for dealing with violent groups, and creating a 311 call center so residents could THE CHALLENGE access nonemergency services—Buttigieg’s new Garces had caught the mayor’s attention administration would have to overcome many through his work with enFocus, a locally funded implementation challenges. postgraduate fellowship program that fostered The first challenge was the city’s old, civic innovation. Garces led a project that aimed decentralized IT system. Not all offices had up- to improve efficiency in emergency services. His to-date equipment or software. Worse, when team analyzed data on fire dispatches and Garces first set foot in the room where the city concluded that the city’s practice of sending large kept its computer servers, he was shocked to see fire trucks to every emergency call, including a plastic tarp draped over the sensitive hardware medical emergencies that did not require to protect it from a dripping air conditioner. The firefighting, was wasteful. Garces proposed a new servers were vulnerable to damage, and the city policy: if the city bought a few sport-utility data they hosted could be lost. vehicles, which were far cheaper to operate, and In addition, the city’s IT specialists were used them to respond to medical emergencies dispersed throughout different parts of city while also optimizing fire dispatch routes, it government. The Department of Administration would save a projected $1.4 million over seven and Finance had a small core group, but several years. The city piloted the proposal. Seeing departments had their own IT specialists—an Garces as a potential asset to the city, Buttigieg approach that caused both redundancy and a hired him in August 2013 as an independent mismatch between skills and needs. contractor with the title performance and innovation Garces was not the first to recognize such manager, charging him with finding ways to problems. The city government had begun achieve some of the mayor’s biggest priorities. planning for changes to its IT capacity several One of those top priorities involved clearing years earlier by bringing together city employees out the city’s many abandoned buildings, which and city council members to create an weighed on property values and created public Information Technology Strategic Plan that was safety hazards. A police officer told a South Bend completed in 2013. Among other priorities, the © 2018, Trustees of Princeton University Terms of use and citation format appear at the end of this document and at successfulsocieties.princeton.edu/about/terms-conditions. 2 Tristan Dreisbach Innovations for Successful Societies strategy called for centralized IT services and legislature and bridging generational differences. more-extensive specialization of IT staff. An ongoing legal dispute over an unrelated issue Second, any effort to improve services would fueled tension between the council and the have to operate on a thin budget. Lack of funds mayor’s office, and a marked divide grew between presented a continuing challenge in a city with a older, working-class party members and their high poverty rate and declining property values. younger, more technocratic colleagues. “In the Property taxes, South Bend’s primary source of early days there were a few [council members] income, had fallen since 2008, reducing the very aligned with Pete, . [but] many were resources to power the mayor’s agenda.4 “We’ve neutral at best,” said Scott Ford, the city’s got to take whatever resources we have and use director of community investment. them better if we want to do anything new,” Buttigieg said. FRAMING A RESPONSE An additional financial constraint resulted “There was no muscle memory in the city on from a 2010 state referendum that enshrined in how to do this,” Buttigieg said about his the state constitution certain tax cuts the initiatives. “We had limited project management legislature had voted for in 2008. Although the ability outside of traditional roles, and we were state permitted South Bend and a few other cities trying to create something totally new.” to maintain temporary additional levies to fund Buttigieg’s professional background and their debt services, that privilege was set to expire Garces’s training in IT and entrepreneurship in 2020. strongly influenced the approach the two took A third challenge was likely resistance to toward improving city processes. Their personal change from city employees. Improving attributes were important factors as well. Known government processes and reforming IT systems to constituents as their convivial “Mayor Pete,” would alter the way people worked, place some Buttigieg had been with management consulting people in new positions, and push some firm McKinsey & Co. and business advisory firm employees out of their jobs—all of them the Cohen Group. “I had a background in unsettling possibilities, especially for longtime city consulting, so I guess that was where I learned workers. about things like data, data structure, and the Buttigieg said he recognized and respected power of data, as well as about how to take the sensitivities involved.