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September 4, 2019

Manchester developing $400K 'innovation fund'

HBJ Photo | Joe Cooper Main Street in downtown Manchester.

MANCHESTER —The Board of Directors and town staff are developing plans to use $400,000 from surplus funds to create an “innovation fund” to invest in new ideas for town government to improve services, reduce costs, or add revenues.

The fund would allow town departments to submit proposals seeking seed money for innovative programs outside of the regular budget process. The proposals would go before a committee for approval and then be subject to regular reporting on their progress.

Town Deputy General Manager Steve Stephanou said in an interview that the fund is a way to encourage innovation where regulations might make town employees reluctant to try new ideas for fear of failure:

“An innovation fund is a structured, transparent attempt at fostering innovation in the public sector,” Stephanou said, “where, rightfully so, policy makers and decision makers are reluctant to allocate money for things that won't necessarily work… You set aside a certain amount of money and set up a formal specific criteria for projects that aim to disrupt the status quo and add value to the community.”

In Baltimore, the first major American city to create such a fund, some of that city’s innovation funds were used to support a new police science lab that made investigations more efficient and allowed the city to take in revenue from other police departments, Stephanou said.

Los Angeles and Philadelphia have also established similar funds.

“The goal for a lot of these projects is that they will ultimately pay for themselves,” Stephanou said.

He noted that, in recent years, the town shifted from outsourcing its street sweeping services to having them done by town staff. It required a large upfront investment for the equipment but ultimately saved the town money by doing more work in-house. The innovation fund is intended to cover such large costs.

The directors designated the $400,000 out of a surplus in the general fund at their June meeting. Town staff have since worked on plans for administering the money, an oversight committee, and ways to measure progress of funded programs.

At a Tuesday policy meeting of the directors, the directors offered cautiously optimistic feedback on the developing plans. The plans are expected to go before the directors for final approval at their board meeting on Sept. 3.

Mayor Jay Moran said it’s important for the fund to start with measurable programs on a timeline of about one year and for the programs to anticipate possible obstacles, such as a breakdown of equipment.

With many strategic plans, Moran said, “it all looks great on paper but we live in this complex world where we can’t predict what’s going to happen tomorrow. That’s why I like the short framework. I'd love to do it a year at a time and look at it.”

Director Cheri Eckbreth said she’d like to see projects totaling over $25,000 approved by the innovation committee come before the directors for final approval. She said it was good for plans to be considered for tangible benefits but emphasized that not all successful innovation would be purely about adding revenue or cutting costs.

“Sometimes the value is the investment we make in the individuals in our community,” Eckbreth said. “It may reduce crime or it may increase things that aren’t as tangible for us to directly see but have a life-long sustaining impact on the residents of our community. And I like that you have metrics in place to measure what we can.”

Director Sarah Jones also asked if departments under the Board of Education could be included in the innovation fund plan. General Manager Scott Shanley said that would be a longer-term goal.

“I’d like to pilot this, kind of see where we go, get some successes, and then go broader,” Shanley said.

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