Part 1: How did we get here?

The release of the City of Marietta Performance Audit in February 2024 has brought to light critical issues plaguing the city’s financial stability. As a retired public servant with nearly four decades of experience in state government, I have been closely following the developments surrounding this audit. Drawing upon my background in public sector restructuring and re-engineering, I aim to provide insights and recommendations for addressing the challenges faced by Marietta. This is Part 1 of a 4-part series.

The City of Marietta Performance Audit, conducted by the State of Ohio Auditor Keith Faber and his team, has sparked widespread attention from local news media, online platforms and public meetings. The findings of the audit, as outlined in the summary and seven main recommendations, underscore the urgent need for action.

Notably, the audit revealed that Marietta does not suffer from a revenue problem; rather, it grapples with inefficiencies in fund allocation and spending (Faber 2024, pp. 7). The most refreshing thing to glean from the report was that we do not have a revenue problem.

Having served in state government for nearly four decades, I have witnessed firsthand the challenges and triumphs of public sector restructuring and re-engineering efforts.

In the mid-1990s and up until the mid-2000s, organizations across public and private sectors embarked on transformative journeys aimed at becoming more customer-focused and performance-driven. These initiatives were rooted in the principles of efficiency, effectiveness and accountability.

During this period of restructuring, organizations prioritized the needs and preferences of their end-users, whether they were citizens, customers, or stakeholders. Work processes were meticulously examined and reengineered to optimize quality and efficiency. Assets, both human and capital, were strategically deployed to achieve desired outcomes.

The overarching goal was clear: to deliver high-quality products and services that met the needs and expectations of the customers.

Reflecting on the current situation in Marietta, I am struck by the parallels between the challenges faced by the city and those experienced by organizations undergoing restructuring in the past.

Just as in the private and public sectors, the principles of customer focus and performance-driven governance are paramount to the city’s success.

However, it is evident that Marietta has fallen short in fully embracing these principles, leading to a state of financial uncertainty and inefficiency.

Interestingly enough, these same conversations came up in 2001-2002 with the formation of the Citizens for Responsible Government questioning the effectiveness of City government to provide quality products and services and mostly, comprehensive planning (Thank you, Dave Haney).

About 23 years ago, we were having the same conversations as we are now. While the recent performance audit has shed light on the immediate concerns, it is essential to delve deeper into the root causes that have led to this point.

One of the primary factors contributing to Marietta’s financial predicament is a historical pattern of reactive rather than proactive decision-making.

Despite warnings from both citizens and financial experts over the past two decades, the city has failed to undertake comprehensive restructuring efforts to address underlying inefficiencies. While minor adjustments may have been made sporadically, there has been a notable absence of a cohesive, long-term strategy focused on optimizing resource allocation and enhancing service delivery.

Furthermore, the absence of a robust framework for performance measurement and accountability has exacerbated the situation. Without clear metrics to assess the effectiveness of spending decisions and service delivery, the city has operated in a state of uncertainty, unable to accurately gauge its progress or identify areas in need of improvement.

Additionally, Marietta’s reliance on short-term financial injections, such as the funds from the American Rescue Plan Act of 2021, has masked underlying issues and delayed the need for substantive action (Faber 2024, pp. 14). While such resources may provide temporary relief, they do not address the systemic challenges that require fundamental restructuring and reform.

Ultimately, Marietta’s current financial crisis can be attributed to a combination of factors, including a lack of proactive leadership, inadequate performance monitoring mechanisms, and a reliance on short-term fixes.

Without decisive action to address these root causes, the city risks descending further into financial instability and jeopardizing the well-being of its citizens. With each passing day, the stakes grow higher and the consequences of inaction become more severe.

The warning signs have been present for years, echoed by concerned citizens, financial experts and community leaders alike. Now, however, the city stands at a crossroads, with no viable alternative but to confront its financial reality and chart a new course forward.

The repercussions of continued inaction are stark: diminished public services, compromised infrastructure, and, ultimately, a diminished quality of life for Marietta’s residents.

The fork in the road is to restructure our organization and make local decisions or fiscal emergency and the State of Ohio appointed administrator will make the recommendations for us.

The latter can impact the bond rating/ranking capacity of the City and the overall Moody’s Investors Services credit rating (Faber 2024, pp. 12).

In light of these urgent circumstances, it is incumbent upon city leaders, stakeholders and residents alike to come together and commit to a comprehensive restructuring and reform effort.

This will require courage, vision, and a willingness to prioritize the long-term interests of the community over short-term political considerations.

First and foremost, Marietta must prioritize the establishment of robust performance measurement mechanisms to track progress and hold decision-makers accountable. By implementing clear metrics to assess the effectiveness of spending decisions and service delivery, the city can ensure that resources are allocated efficiently and transparently.

Furthermore, Marietta must learn from the mistakes of the past and embrace a proactive, rather than reactive, approach to governance.

This entails undertaking comprehensive restructuring efforts that prioritize long-term sustainability over short-term fixes. Such efforts should involve all stakeholders, including city officials, community leaders, and residents, to ensure broad-based support and buy-in.

Moreover, Marietta must recognize the importance of fiscal responsibility and prudent financial management in achieving its long-term goals.

This includes exploring innovative revenue generation strategies, streamlining administrative processes, and identifying opportunities for cost savings and efficiency gains.

Finally, Marietta must remain steadfast in its commitment to serving the needs of its citizens and fostering a culture of continuous improvement and innovation. By prioritizing the delivery of high-quality products and services that meet the evolving needs of the community, the city can build trust and confidence among its residents and stakeholders.

In conclusion, the road ahead for Marietta will undoubtedly be challenging, but it is not insurmountable. By learning from past experiences, embracing accountability and transparency, and prioritizing the needs of its citizens, the city can overcome its current challenges and emerge stronger and more resilient than ever before.

As a preview to Part 2, we’ll take a look at real numbers and what they mean. Just a primer, for scale the entire city revenue for all funds in FY 2022 was $40.8 million.

And our expenses were $42.3 million (Faber 2024, pp. 4-5). I encourage every citizen to read the document.

And the Performance Audit is not the end all, there will be some local choices we will have to decide on as a community, things we really value and are not willing to compromise.

Thank you for reading.

Wm. McElfresh resides in Marietta and served 39 years in state government. He is a Certified Public Manager in the State of Ohio and a LEAN Greenbelt. He is also a graduate of the Executive Leadership Academy, Voinovich School of Government and Public Affairs (currently named Leadership and Public Service), Ohio University.