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Seeing its model was unsustainable, Beltrami County focused on results -- and got them

While covering important issues in our civic and cultural life, journalists typically focus on facts, controversies, issues and their impact. They rarely look through the lens of understanding leaders and leadership: who is leading the causes and creating change, how those leaders were motivated to tackle tough problems and create opportunities for their communities, and how they worked through the challenges that arose.

In a yearlong series, MinnPost will profile such leaders in order to provide new insights — and, we hope in some cases, inspiration — for our readers. Each profile will be followed by comments from a panel of experienced leaders and scholars of leadership. The project is made possible by a grant from the Bush Foundation.

Tony Murphy pushed tough questions of what the county was getting for the money it spent.
MinnPost photo by Sharon Schmickle
Tony Murphy pushed tough questions of what the county was getting for the money it spent.

BEMIDJI, Minn. — Even before the words budget and crisis became synonymous in Minnesota, Tony Murphy concluded that Beltrami County needed repairs to its own financial house.

Look at a map, and you would think this patch of Northern Minnesota had a wealth of property to tax. It is the state's fourth largest county. In fact, though, it is property-tax poor because much of the land is tied up in Indian reservations, church camps, college campuses and state parks.

With just one-fourth of the land left on the tax rolls, property taxes already were high. So was poverty among the county's 44,000 residents.

Murphy, the county administrator, added up those and other factors, looked into the future and saw eventual failure for Beltrami's service-delivery model.

Other Minnesota counties are awaking to the same reality. What's clear from the budget battle raging in St. Paul is that government — from the local to the state levels — is at a crucial juncture.

Whether or not the state raises taxes to close the current budget gap, whether or not services are cut, there is bipartisan agreement that Minnesota must move beyond the simple tax-versus-cut debate and get to work overhauling the way government does business.

A few Minnesota counties have stepped forth to try bold ideas. Some likely will fail. Some are appropriately controversial. But Minnesotans can hope that some will shine a beacon into a future where Minnesota no longer operates in crisis mode.

As part of a yearlong series on leadership, MinnPost will profile some of the people driving these efforts. We do not present them as perfect models, but rather as starting points.

Sounding the alarm
Murphy credits Beltrami County commissioners for waking up early to the need for fundamental change. But other officials say he sounded the alarms and led the drive to do things differently.

"He really needs to take credit for this," said Mary Marchel, the county's health and human services director. "He is at the heart of creating this movement. Our board is, too, but there has to be someone who starts it. ... We sometimes say it is the lone nut who starts a movement. He has been our lone nut."

Indeed, Murphy might have been seen as a "nut" years ago when he warned that the county could not sustain its rising costs. Minnesota's economy was humming at the time, and tax revenues were robust.

Getting their money's worth
The county already had consolidated services with its neighbors for solid-waste disposal, public-health programs and many other functions.

"Consolidation is not the magic ticket," Murphy said. "It must be part of the discussion but it is not the only piece."

Beltrami County administrator Tony Murphy discusses his philosophy of innovation.

Further, an all-cuts approach wouldn't fit a county where 21 percent of the people live in poverty, according to the 2010 Census. That compares with 11 percent for Minnesota as a whole.

So Murphy pushed tough questions of what the county was getting for the money it spent.

Take chemical-dependency treatment. The county was meeting the letter of a state mandate by reporting how many people were enrolled in treatment and how much money was spent. But Murphy wanted to talk outcomes: How many people actually completed treatment? How many remained sober for some time? How many followed through with aftercare?

No one in county government charted that information, he said. In other words, he couldn't answer the question most taxpayers would ask: Were they getting results for their money?

Taxpayers do not value treatment per se, Murphy said, "They value people getting clean!"

And so it went issue after issue. While the government focused on state-mandated process and procedure, Murphy pressed for outcomes.

"We had just assumed that because we were paying that certain amount of money and the service was available to people — and maybe the number of people getting the service was growing — that we were doing a good thing," he said. "That isn't always the case. Just because you are spending the money doesn't mean you are doing the good."

Combing for new strategies, he found that from New Zealand to Denmark to counties right here in Minnesota, innovators were at work, asking the same sort of questions.

'At some point, we would run out of money'
Armed with the results of Murphy's research, county officials went into an all-day retreat in 2007, a time when few Minnesotans anticipated the economic crash that would drive tax revenues into the cellar.

Still, the Beltrami officials emerged from their retreat convinced that their traditional operating model was doomed.

County Board Chairman Joe Vene
MinnPost/Sharon Schmickle
County Board Chairman Joe Vene

"Over time we kept spending more money to initiate services, and I felt the time had come when this would not be sustainable," said Joe Vene, the County Board chairman. "At some point, we would run out of money."

With the board's approval, Murphy and his staff went to work evaluating programs, setting performance targets, monitoring progress and shifting funding toward programs that appeared to get results.

A key to the whole initiative was empowering county staff to innovate and take risks. The board allocated $200,000 for executing ideas that appeared to have merit.

Murphy also joined other counties in pressing the state for more flexibility in delivering state-funded services.

Taking the long view
Eventually, Murphy and his team were ready to challenge longstanding practices.

One target was the traditional job-placement program. It allowed most people receiving public assistance to get one year of education before they had to take a job. But thanks to a dislocated-worker program, others who had lost jobs at a manufacturing plant were entitled to two years of education.

Not surprisingly, those with better education tended to land better jobs, earning enough to support families. Meanwhile, those with just one year of schooling often were pushed into low-paying jobs with high turnover. In other words, they were prime candidates for costly county services like health-care assistance and chemical-dependency treatment. They also were more likely to show up in the sheriff's crime logs and in court.

Why not save money in the long run by providing two years of education for everyone who could benefit from it?

One reason that hadn't happened was that the state provided bonuses for meeting work participation goals under the one-year education approach. The county stood to lose $45,000 if it allowed some people to go to school an extra year.

Emboldened county officials took the plunge anyway.

"We said to the state, 'We don't care about your $45,000 because we think we can get better outcomes from a two-year education plan,' " said John Pugleasa, who directs the county's Economic Assistance Division. "Framing it from the perspective of outcomes changed the discussion."

Now, under a pilot project, the county screens applicants for the extra year of education, choosing those who are likely to use the schooling to climb out of poverty.

From M&M to Jolly Rancher
Another innovation has been Beltrami Works! — also a program intended to help boost people out of poverty.

Mindie Bird, 23, explained how the program worked for her. Two years ago she got pregnant and lost her job. Suddenly, she faced life as a single, unemployed mother.

Mindie Bird
MinnPost/Sharon Schmickle
Mindie Bird

"I felt completely lost and alone," she said. "I lost all confidence in myself."

A job counselor urged her to enroll in Beltrami Works!. She did so reluctantly and attended sessions where she met other people trapped in straits similar to hers. They functioned as a mutual support group.

They also got life coaches, in-depth evaluation of their personal strengths, and training for the skills and relationships needed in the workplace.

Working with her life coach, Bird drew up a contract setting out personal goals.

Now, Bird is fulfilling that contract by working at a nursing home and also taking classes at Leech Lake Tribal College. She has connected with the father of her 11-month-old daughter in an effort to establish a parenting relationship.

"Before Beltrami Works! I was like an M & M," Bird said. "I was hard on the outside and soft on the inside. Now I am like a Jolly Rancher, strong all the way through."

Two jobs, three children
Kjell Thompson, 37, is another Beltrami Works! alumna. She had been overwhelmed by the demands of working two jobs while rearing three children, including a 9-year-old who has needed multiple brain surgeries.

"I've always been determined to write poverty out of my life ... but I was spinning my wheels, but not going anywhere," she said.

The coaching sessions gave her new momentum.

Kjell Thompson
MinnPost/Sharon Schmickle
Kjell Thompson

"My hurts were real and my dreams were possible at Beltrami Works!," she said. "They believed in us. ... I began to believe I could move forward."

She landed a better job and cobbled together enough work on the side (church custodian, etc.) to move her family out of their run-down rented trailer and into a new house.

"I am not completely out of poverty, but I'm going to be," she said.  

About 100 people have gone through Beltrami Works! in two years, Pugleasa said. Of the 47 who kept in touch, 19 have jobs, 18 have enrolled in education programs, 10 have moved to better housing or stopped being homeless, and 18 have taken steps to treat chemical, mental or physical problems or to resolve abusive relationships.

'They thought I was the devil!'
While there is enthusiasm for such programs, the overall upheaval in county offices was not universally appreciated.

Two high-level officials left their county jobs.

And the supervisors of the Beltrami Soil and Water Conservation District balked at the county's insistence on eliminating service overlaps and shifting priorities from agriculture to water quality.

"They hated the process," Murphy said. "They hated everything about it. They hated me. ... They thought I was the devil!"

Eventually, some of the conservation district's responsibilities and employees were folded into county environmental operations. Murphy said the restructuring saved $300,000 a year.

Tony Murphy: "I have been involved in community service really all of my life."
MinnPost photo by Sharon Schmickle
Tony Murphy: "I have been involved in community service really all of my life."

"We seem to have worked things out in a very amenable way," said Jay Backstrom, chairman of the conservation district's board of supervisors. "There were some problems and issues. I came on the board after that. It was my feeling we should leave that in the past and try to work together, move forward, be pro-active and make a better situation for everyone."

As for Murphy, Backstrom said: "Not everyone likes him, the way he works, but I think he is doing a great job. When you are trying to make things work a different way than was done in the past you always have some naysayers."

Intractable problems
Others worry, though. Former state Sen. Mary Olson, a DFLer who lives in Bemidji, said she is all for streamlining government and erasing spending overlaps. But what will happen to programs that don't readily lend themselves to positive outcomes, she asked.

"The idea of funding everything that works and using an outcome-based approach, that's great if there is a better way to spend the money," she said. "But this could become a rationale for not addressing specific problems and needs."

Positive outcomes can be elusive when counties deal with domestic abuse and mental-health problems. If progress isn't obvious in those programs, will counties be tempted to divert the funding toward other needs — say repairing crumbling roads?

"We have to be very careful," Olson said.

Another concern is that the flexibility Murphy and some other county leaders are seeking from state rules could leave a patchwork of service levels with residents of some counties getting higher benefits from state dollars than those in other counties.

Yet another concern for a few Minnesota counties is how local decisions will square with the needs of Indians on reservations. Even under strict state rules, there has been tension in those relationships. In 2007, the state had to settle a dispute between Beltrami County and the Red Lake Band of Ojibwe over responsibility for foster care and child protection on the Red Lake Reservation.

Soft spoken and private
If you met Murphy on the street, he would not strike you as the driver of bold change.

He is articulate but soft-spoken, eager to talk policy but reluctant to open up his personal life. In hundreds of interviews with reporters, he said, he rarely has been asked what shaped and inspired him.

I pressed. And he obliged.

At age 49, Murphy has traveled the world and come back to his hometown, Bemidji.

"Like most teens growing up in Northern Minnesota, you can't wait to get out," he said. "So I did leave when I was 19."

First he served a two-year mission for the Mormon Church in England's coal-mining country. Poverty wasn't new to any kid who grew up in Northern Minnesota with half an eye open to economic reality. Even so, concentrated urban poverty — the high-rise public housing, the gangs of street toughs and the sense of hopeless entrapment — expanded his understanding.

Mandatory class led to a different direction
Back in the United States, Murphy began studying civil engineering at Brigham Young University in Utah. But a mandatory class in state and local government turned him in a different direction.

The teacher, a retired city manager, had a favorite saying: You should pick a job where the fight's the thickest and the line's the shortest.

"In his mind that meant either become a minister or work in local government," Murphy recalled. "He really impressed upon me the importance of finding ways to give back to the community."

So Murphy earned a bachelor's degree in public policy and a master's in public administration at Brigham Young. He worked for 12 years in city administration before landing the Beltrami job.

Meanwhile, he had married his college sweetheart, and they had three children. The oldest son just graduated from Brigham Young and the youngest finished high school this year. The daughter has spina bifida, a birth defect in which the bones of the spine do not fully form.

"She is now living on her own here in Bemidji and is doing quite well," he said.

As for himself, Murphy remains active in the Church of Jesus Christ of Latter-day Saints.

"I'm a religious person," he said.

That is the biography. But is there a deeper inspiration driving your work, I asked.

"My grandfather was a township clerk for 25 years. I remember riding with him as a child as he would stump for Hubert Humphrey. I have been involved in community service really all of my life," he said.

"I also had two brothers born with spina bifida," he went on. "I have seen my brothers unable to attend classes at the high school because there was not a working elevator. I have seen how challenging it can be for parents to find and connect with needed resources for people they loved."

During the 1970s, the state insisted that the only way for one of his brothers to get an education was to attend a special school in Worthington — hundreds of miles from Bemidji.

"It was a horrendous state decision," Murphy said. "We could only see him really on holidays. … So I have developed a strong interest in making sure individuals receive support when they need it."

Courage — or thick skin
He also has learned how to survive in the center of controversy and sleep at night too. Call it courage — or just thick skin.

"I know that county administrators don't usually win popularity contests. Oftentimes you are forcing people to confront a decision between two choices that they consider equally difficult," he said.

Even during the heat of the debate with the soil and water supervisors, he said: "I didn't take their criticism personally, I tried to be sensitive to the fear that's attached and the pride that they had in what they'd accomplished.

"But I also tried to help them understand that the world is changing and they are better served if they can be creators of that new future rather than creatures of it," he added. "It isn't scary for me. But it is challenging."

'Driving Change' panel: Mutual trust, risk-taking were key in Beltrami innovations

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Comments (5)

This is good stuff, Sharon. Keep it up.

Clearly Mr. Murphy has very solid underpinnings for everything he's been trying to do. He's been through challenging things in his own life, but has kept intact the entire personality with which he was born.

Consequently, he can make hard-nosed demands for "results" while evaluating those "results" based on whether or not they positively impact the lives of actual people.

Thank you for spelling out, for those of us capable of comprehending it, what TRUE leadership is (and that it's NOT "faster, better, cheaper").

Finally, I am very impressed to see that Mr. Murphy doesn't seem to have substituted the dysfonic ideal of "building (individual) wealth" in place of the far better ideal of building a healthy, functional, prosperous society (the two things, of course, being diametrically opposed to each other).

I'm fascinated by this approach! Certainly every county or city has unique challenges, but it would be interesting to see if any of these concepts can be parlayed to more populous areas. It seems like Murphy has been able to create programs that treat everyone like an individual rather than a "one size fits all" approach to social programs.

An excellent article. It is not easy to measure outcomes rather than process and to determine realistic levels of performance. But the work in Beltrami County has started to develop the benchmarking data that other counties can use for innovation. Other counties adopting similar strategies can now compare their data with Beltrami's and share ways to improve outcomes.

Every service that government delivers can be measured by outcome attainment and once measured outcomes can be improved and it can be more cost effective. As the article pointed out the county chose to invest more in people initially so it could achieve better outcomes in the long term. That should be a lesson to other counties.

One of the problems with government is not that they don't spend enough it's that they dole out too little money to to many people so the investment is ineffective.

Working for a federal agency where all construction project money was appropriated over several years it was easy to see why costs ballooned. An initial 12 month 5 million dollar construction project would take 3-4 years to complete with budget cycles and end up costing 7 million with mobilization and demobilization costs. Multiply that across all projects in the country you have some serious inefficiencies.

Courage is key, as County Administrator Tony Murphy indicate, he was not engaged in a "popularity contest".

Another key is having elected leaders who will support institutional change in cities and counties, where all the rewards have traditionally gone to elected and appointed officials who will risk nothing to guaranty the maintenance of the status quo, and their careers.

The Beltrami Board of County Commissioners and Murphy were not afraid of embracing controversy to
make measurement of public services about the improvement of individual lives of citizens, rather expansion of the bureaucracy.

Lack of Courage, or an unfortunate abundance of fear, among most public managers and governing boards makes this success story likely to remain a unique one in Minnesota.