Oakdale Administrator Case
Robert A. Cropf, Jennifer M. Giancola and Coley Lewis
DOI: 10.4324/9781315662404-11
Abstract
This case examines the political trade-offs and tough decisions that must be made to restore a municipal government to fiscal stability. In an era of flat revenue growth or decline, many municipalities face stark choices regarding economic development and growth. Oakdale, a suburb of a medium-sized city, is struggling to compete with the more prosperous and attractive surrounding municipalities for redevelopment projects and business investment. Complicating the situation is a scandal involving the previous city administrator who was found guilty of violating state ethics laws and gross fiscal malfeasance.
Main Topics
Decision making, Financial management
Secondary Topics
Political context, Ethics
Teaching Purpose
To put students in the shoes of municipal officials as they struggle to balance the budget and at the same time provide their residents with a higher quality of life.
The Organization
A small suburban municipal government with a weak economic base in the inner suburbs of a large city.
Main Characters
Ernest Hoffnagel, Former Mayor
Angela Donny, Former City Administrator
Allen Hauser, Alderman
Helen Robison, Alderwoman
Paul Asher, new City Administrator
Marie Clarkson, Interim Mayor
Overview
Background
The history of Oakdale dates back to the early nineteenth century and to territories originally occupied by French and Spanish traders. There have been human settlements in the area since that time. In 1941, Oakdale officially became a state-chartered municipality and in the process established its current city government structure, creating the positions of mayor and board of aldermen and building a city hall. The current organizational chart for the City of Oakdale can be viewed in Appendix A.
Oakdale currently has a population of about 5,000 citizens according to the most recent census. The majority of Oakdale citizens are considered lower middle class, with a median income of $47,869 and a median house value of $100,900. The majority of the residents (65 percent) are white. However, a significant percentage (29 percent) is African American. The rest of the city’s population consists of Native Americans and Hispanics.
Among the surrounding municipalities, Oakdale is considered something of an eyesore. So much so that citizens on the dividing line between Silver Lake City and Oakdale consider themselves residents of Silver Lake City, and even go so far as to claim that city as their mailing address. Their reasons for disavowing Oakdale are varied, but chief among them are the city’s worn-out central business district and drab-looking neighborhoods. The illusion has so far worked; postal employees deliver the incorrectly labeled envelopes to those who wish to be considered residents of Silver Lake City.
Although image cannot determine the true value of a community, certain neighborhoods do appear worn, even, in some cases, seriously dilapidated. The architectural design of many retail shops and commercial establishments is outdated. Although some remodeling has been completed, along with the construction of a few new buildings, the city’s business district lacks overall design consistency. Whether in a residential neighborhood or off the main artery in Oakdale, one retail store or home may look appealing and up to date; then next door, there will be another one in serious need of repair. As a result, the city appears in economic decline, which serves as a serious impediment to attracting new residents or businesses that might invest in the community. According to the city’s auditors, the budget of Oakdale in 2008 was approximately $3.5 million, essentially the same as the year before. Compared to similar-sized municipalities in the same state, Oakdale lags behind in terms of both revenues and expenditures. Therefore, city government has little in the way of available money for new projects. Without a change in the city’s business climate, Oakdale’s revenues and expenditures will likely decline. For instance, Silver Lake City, Oakdale’s neighbor, has a population of just over 7,000, but its median income is $109,345 and the median house value is $359,888—both figures significantly greater than Oakdale’s. Silver Lake City also has a higher percentage of white residents than Oakdale with 89 percent of the population being white. Silver Lake City’s municipal budget is $6.7 million and has shown slight increases every year.
In April 2003, Ernie Hoffnagel, a former alderman, was elected mayor of Oakdale over the incumbent, Carl Bean. Hoffnagel, a slight man in his late fifties and a car salesman by profession, focused his campaign on revitalizing the city by attracting new businesses and residents. About a month before the election, on March 12, 2005, the local Oakdale newspaper published an interview it had recently conducted with Hoffnagel, in which he stated the following:
This city has been in the shadows of neighboring municipalities for too long. It’s time that Oakdale creates a new identity for itself. It needs a new brand: something jazzy. Too many houses and businesses are unkempt and just plain decrepit. As mayor, I’ll enforce the codes; we’ll have more rigorous housing inspections and see to it that our retail centers are remodeled, catching the eyes of nonresidents. I want each and every visitor to leave saying, “Wow, Oakdale is one neat place!”
Oakdale voters were immediately taken with the diminutive Hoffnagel’s enthusiasm. Incumbent Carl Bean, a certified public accountant, who was more analytical than charismatic, asserted that Hoffnagel’s claims were too idealistic and not fiscally feasible. Whereas Hoffnagel talked change and improvements, Bean worried over costs and budgets. Ever the politician, Hoffnagel used Bean’s cautious conservatism to his advantage, contending that his opponent had not only failed to bring in new business but had not done enough as mayor to raise the city’s reputation. Bean countered by enumerating all his successes during his term. However, it had little impact among the voters; the improvements, for example, fixing sidewalks here and repaving roads there, seemed relatively slight in comparison to the city’s mounting image problems. The voters overwhelmingly supported the salesman, Hoffnagel, who promised a rosy future for Oakdale.
Redeveloping Oakdale
With his victory, Mayor Hoffnagel quickly moved to terminate the previous administration’s staff and bring in his own people. Hoffnagel’s most significant and controversial appointment was that of Angela Donny as the city manager. Donny had an infamous reputation throughout the region.
