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Tom Watkins likes a challenge.

The former senior staffer for Gov. Jim Blanchard and one-time state superintendent of education under Gov. Jennifer Granholm is an old-line Democrat with a bias for common sense, even when it runs smack into party orthodoxy that demonizes all things China (a favorite subject of his) or challenges its ties to the teachers union.

A decade ago, Watkins produced a report that candidly detailed the financial perils lurking in the way Michigan funds public education, outraging the constituencies he aimed to enlighten. Events proved him right, long after his unforgivable sin cost him his job as schools superintendent, courtesy of Granholm, the educational bureaucracy and its allies in organized labor.

His latest CEO job: leading a restructuring of what's now the Detroit Wayne Mental Health Authority to make it more efficient, a better steward of public money and — potentially — a model for how cash-strapped Wayne County can make its way forward.

"It puts us on a trajectory that we will be able to afford," he says of the move begun nearly two years ago to convert the department to an authority and the series of reforms that effected employees, contractors and the people served by the authority. "We had to unplug from the county and replug into our own systems. To me, it was a no-brainer.

"It's been talked about for years. It's also part of the movement in health care. It makes sense to reduce costs and increase services. We did it" — but not without the inevitable push-back that comes from challenging the status quo embraced by too many.

Under Watkins and a new management team, the authority renegotiated three-year contracts with two unions; competitively bid management of existing pension plans, eventually moving them to the Municipal Employees' Retirement System of Michigan, a private company that manages 800 retirement plans statewide; converted employees to defined-contribution retirement plans from defined-benefit pensions, shedding punishing legacy costs that weighed on the authority's ability to provide services; launched a study of wage classifications.

They created a full-time information technology department under an IT director wooed from the Oakland County Community Mental Health Authority. Robust IT oversight is critical to managing the authority's complex interactions with myriad insurance companies, the state's newly merged Department of Health and Human Services, and such federal programs as Medicare, Medicaid and ObamaCare.

They appointed a chief financial officer from the county's financial staff; hired a medical director; recruited a chief operating officer from the Genesee Health System — all of it designed to erase a feared deficit of "tens of millions" on a nearly $700 million budget, Watkins says, because they "didn't have the data" necessary to manage the operation properly.

Instead of continuing to pay $900,000 a year to lease offices in a dilapidated hulk of a building at 640 Temple, the authority acquired a building at 707 W. Milwaukee and plans to redirect eventual savings on the move into services treating intellectual and developmental disorders, substance abuse and mental health disorders.

His mantra is worthy of repetition in the public sector, be it in a Wayne County facing looming financial disaster or a Detroit charged with executing a bankruptcy-imposed restructuring plan. First, use data, not ideology or emotion, to make decisions. Second, use evidence to judge the effectiveness of those decisions. Third, use both to keep the organization focused on the community and the customers, not internal bureaucratic needs or those of long-term contractors.

Finally, remember the money at stake belongs to the public, not you. Before 2013, he says, the authority's precursor department issued contracts without performance-based metrics. Not anymore. Now, contracts with the authority carry "both carrots and sticks," a radical innovation that naturally elicited "tremendous pushback."

"We're nowhere near where we need to be," Watkins says, "but we're moving in that direction. What's the outcome? In this business, it's providing the highest level of care to the most vulnerable citizens. If this was your money and my money, how would you spend it — because ultimately it is."

He's right, of course. He's also a realist; he hears the talk in Republican-controlled Lansing about privatizing the services his authority provides, and his answer is exemplified by what he and his team are trying to do — use smart management and fiscal responsibility to deliver for their customers.

Do that long enough, consistently enough, and narrative can change, just like it has for an authority-led Cobo Center and, potentially, the Great Lakes Water Authority. Management matters; and so does accountability.

Daniel.Howes@detroitnews.com

(313) 222-2106

Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151.

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