iowa charter agencies

By AMY LORENTZEN

Associated Press Writer

DES MOINES, Iowa (AP) -- Some state agencies are exploring their entrepreneurial spirit, forgoing some state funding and promising to earn higher revenues in exchange for more freedom in how they operate.

Called charter agencies, they're part of a reinvention plan introduced in Iowa last year meant to improve services to Iowans.

Six state agencies are part of the project. Some offered to take budget cuts totaling about $15 million while others offered to earn more revenue - all in an effort to get a break from administrative red tape.

It's a way to help the state overcome budget problems and become more efficient, said Jim Chrisinger, a spokesman for the Iowa Department of Management, which oversees state agencies.

"We're busting out of that old bureaucratic model and into a new reinvention," he said. "It's a new paradigm for government."

The agencies are the Iowa Veterans Home, the Alcoholic Beverages Division and the departments of Corrections, Human Services, Natural Resources and Revenue.

The Alcoholic Beverages Division, for instance, will change the way it prices liquor, using a variable markup to boost profits and reduce the price of premium liquors.

The Department of Natural Resources is increasing sales of seedlings from the State Forest Nursery by about 200,000 trees to boost earnings.

The agency's transformation to a charter agency "helped this department to take a more entrepreneurial look at how we do our business," said DNR Director Jeff Vonk.

The agency gave up $50,000 in state funding.

In exchange, it has been allowed to cut red tape that made applicants for air quality permits wait as long as 62 days. Now, applicants can get their permits in less than two weeks.

The new approach focuses on results that keep "customers" coming back, Chrisinger said.

"Reinvention, in general, is trying to say it's about value, not about the dollar figures," he said.

The concept of charter agencies came from the Minnesota consulting firm Public Strategies Group, which was hired by Iowa Gov. Tom Vilsack to help streamline state government.

"This is one of the boldest experiments going on in the country," said Babak Armajani, PSG's chief executive officer. "I think it's a model that people would adapt to other settings."

Rep. Jeffrey Elgin, R-Cedar Rapids, chairman of the House State Government Committee, said some lawmakers do have some concerns about charter agencies. That's because they don't want to the departments to break any rules while reshaping the way they operate.

"Those agencies need to be able to provide the services that they are required to in the best manner they can ... but they also have to be in line in terms of procedures that need to be followed," Elgin said.

For example, a bill that would have ended charter agencies' need for approval for workers' out-of-state travel died in Elgin's committee this week.

Armajani said it could take up to five years for the charter agencies' "cultures to change to be more entrepreneurial and for their systems to change to be more performance-based and customer-focused."

Vonk said there's always some skepticism about new government programs and whether they'll stick around, but he believes charter agencies have staying power.

"I think actually what we'll find is that as we challenge some of the existing norms, especially within the administrative process, these concepts will be expanded throughout state government," he said.
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-Associated Press, March 08, 2004