Our Hometown
|
|
From the County Fiscal Advisory Team
Board of Supervisors Wayne County Mr. Colvin presented the following: RESOLVED, that a Wayne County Fiscal Analysis Team shall be created to review all County fiscal operations and to meet with department heads within Wayne County to report and make recommendations to the Wayne County Board of Supervisors; and be it further RESOLVED, that the Wayne County Fiscal Analysis Team shall initially include the following in its membership:
And be it further RESOLVED, that the above listed members shall be appointed to serve a (1) one year term of office, commencing January 1, 2005 to December 31, 2005. Mr. Frederick moved the adoption of the resolution. Seconded by Mr. Hammond. Upon roll call, adopted. PROBLEM STATEMENT Wayne County Government is facing a severe financial crisis. Many other Counties face similar problems. Recently Erie County was forced to take drastic action, eliminating the jobs of 2000 County employees and eliminating many services always thought by the residents to be essential. Wayne County must act immediately to reverse the current escalating trend of County costs to avoid this fate. A hiring freeze must be adopted immediately, with re-training and re-assignments of existing employees to fill new vacancies so that attrition (retirements and resignations) can reduce employment to workable levels, without a drastic layoff being required. Employment costs must be reduced to maintain a viable County Government at costs (hence tax rates) that will not smother economic growth in the County, and damage the lives of its 95,000 residents. Delay or postponement of this action would be the worst possible action by the Board. By Resolution #968-03 dated 12/16/03 the Board recognized that a fund balance of at least $20 million is the necessary level of working capital for the County's business Below that level, the County may not, at some times of the year, have enough cash, and its borrowing costs will increase markedly. (County receipts are heavily weighted to the first half of the year, with major bills coming due in the second half; this much working capital is deemed necessary). The Board of Supervisors adopted a 2005 budget that raised real estate tax rates by 13.7% and increased the sales tax from 7% to 8%. The real property tax actually paid by property owners increased by 27.9%, from a 2004 levy of $30.8 million to a 2005 levy of $39.4 million. (The total assessed valuation of the County increased from $3.6 billion to $4.1 billion during 2004, accounting for the very large difference between the rate percentage increase announced and actual taxes paid). The Sales Tax increase of 1% is projected to generate $2.0 million in additional revenue from County residents, for a total of $. 20.0 million in sales tax revenue to the County this year. Thus, total revenue for 2005 is projected to increase by $10.6 million. From 2004 to 2005 the tax burden of Wayne County residents and property owners has increased by 22.1%, from $48.8 million to $59.4 million. Despite this increase in cash receipts by the County, a cash deficit of $8 million is budgeted to be paid by taking that money from the fund balance. The Fund balance on 1/1/05 was about $28.3 million, and since the budget calls for spending of $8 million in excess of projected revenues, the projection is for a $20 million balance at year end. On present trends for spending the fund balance will be zeroed out within 3 to 5 years, and possibly sooner. The impact on businesses and residents will be a disastrously escalating tax burden This Team was appointed by the Board to assist it in finding actions and steps that could break this cycle, by analyzing the budget, its processes, programs and expenditures, and writing this report and making recommendations. We have worked hard to remain unbiased throughout this work, and all of our recommendations are unanimous. There is no minority report. We offer it as the beginning of what must be a major re-shaping of our County Government to meet the challenges of the 21st century. Even if all of the recommendations we offer are acted upon vigorously and promptly, and if the Administration finds additional or alternative means for major cost reductions, it is still probable that future tax increases will eventually be necessary. The need may arise because of State or Federal underfunding of mandated programs, or simply due to inevitable increases in prices and costs. If such increases are necessary, it is our view that it be done by using the Consumer Price Index, less 1 % for each year where it is necessary. Not all of our recommendations call for cost cutting. Some of the savings resulting from our recommendations should be used to increase the County's investment in Economic Development, Information Technology, Central Purchasing and a Grants Writing office or function. These items are all aimed at revenue raising and 'working smarter' issues. The County is a very large business. For such a business each annual budget document must be accompanied by a five year budget projection. This will give the County a view of the road ahead, as each element of any single budget has implications for the future, and they should be visible. The Team has generally used the past five years to determine the present trend, as well as information supplied by the County Budget office for a five year term in the future. In estimating fiscal impact of the recommendations we work with the five year term estimates in most cases, as this is the best 'real world' way to prioritize actions. Finally, we urge that the full Board consider this entire report, as a single deliberative body, to determine its plan for implementation of these recommendations. Only the Board can provide the leadership to take the bold, vigorous and courageous actions that must be taken now to face this financial emergency. RECYCLING (CURBSIDE AND MRF OPERATIONS) Present Condition: The County is one of two surviving members of the original Ontario, Seneca Yates and Wayne County supported Western Finger Lakes Solid Waste Authority. Yates County is the only other present member. The Chairman of the Authority represents Yates County. Presently Wayne County makes cash contributions to this mandated service of $1.12 million, out of the total operating budget of $1.8 million. The Authority derives about $680 Thousand per year from MRF operations product. Yates County's contribution is $28 Thousand. Since 1999 the cost to Wayne County has increased from $800K to a 2005 level of $1.120 million. Note that while the State mandates that recycling Service be available to residents of Wayne County, it does not specify that government be the provider. To determine cost effectiveness of this service, as presently provided, a volumetric Benchmarking Study was made. That study determined that the service covered 607 miles of road, with about 20,000 household pickups on a bi-weekly cycle. During 2004 the annual output volumes were: containers (2,091 tons) and Fiber (4,168) Tons), all processed through the Authority's MRF Operation. In order to benchmark this cost picture, three quality firms were contacted, provided the volumetrics and asked to submit approximate 'Costing Data' to provide this service to the County without loss of service or adverse effect on the environment. The Benchmarking Study results indicate that a favorable cost advantage exists when the service is provided by a private contractor. Recommendations: The County should immediately take aggressively take the following steps: 1. Establish a Team, authorized to design and issue a Formal Request for Quote for this service within the County. 2. Conduct an impact analysis and resolve all open issues 3. As the other County participants have done, withdraw financial support from the Authority, and during the pendency of that withdrawal, insist that the Chairman of the Authority be from Wayne County, in view of the $28 thousand vs. $1 million plus disparity in cash support levels. Savings: Benchmarking Study indicates at least a $450K annualized Savings or $2.250 Mil. Over a five year period Cost of delay in action is $37,500 per month, or $1250 per day. We should move swiftly. HEALTH INSURANCE Present Condition The County presently offers both a community rated health insurance program (Blue Cross/Blue Shield) and a Self Insured Program. The dual offering is both inefficient and unnecessarily expensive. Current hospitalization insurance premium costs are about $7 million per year, or about $35 million over the next five year term, even before the predictable premium rate increases are considered. In actuality a $40 million total figure for the next five years is probable. About 20% of this total premium cost is for the 209 retired employees (those hired before 1976), or about $1.5 million. The trend in health care spending is not good: Over the past five years it has increased from a 1999 level of $3.4 million to the 2004 level of $6.7 million. Recommendations Work with Employees and the Unions to arrive at a mutually acceptable solution. The employees understand that a 1.5 or 2.0 million dollar savings in health insurance cost can reduce pressure for immediate job eliminations. Recognize that virtually all County employees are also residents and taxpayers in the County. Consideration should be given in those work sessions to a cafeteria plan, where the County provides a basic Health Insurance package at no cost to full time employees, with additional coverage costs paid by the employees with pre-tax dollars. Offer only a community rated plan. Abolish and close the self insurance plan. Do not be deterred by the 'tail' of hangover claims. This is a transitory problem and can be defined in terms of cost, is a one time cost and should be dealt with as such. Join the consortium of governments which has been formed in the Finger Lakes Region. This group is currently bidding out individually tailored but group priced health insurance packages on the volume of the 4000 employees of the group. The municipalities are Livingston, Yates, Ontario and Seneca Counties, with the cities of Canandaigua\and Geneva. Wayne County has been invited to join in order to take advantage of the cost savings, but has so far declined the offer. Retirees: Working with the Retired Employees, there are methods available for maintaining the similar coverage at a greatly reduced cost to the County. With the 'normal' use of Medicare and a lower cost supplemental insurance coverage, the savings can be enormous and continuing. Again, these retirees are generally residents and taxpayers who do care. Term Savings: On the information available to us, it appears that on current premium levels, the savings could be as much as $1.5 to $2 million per year. Term, savings could be in the range of, $7 to $10 million for the next five years, and we may be conservative in this estimate, taking into account likely premium rate increases. PURCHASING AND INVENTORY MANAGEMENT Present Condition: The purpose of this study was to assess and evaluate the County's Purchasing and Inventory Management Function. These critical Functions do not exist in a formal state. Furthermore, no Purchasing Standards or Guidelines are established or Documented! Current Purchasing Strategy most commonly used is to purchase from NYS Contracts which may not offer the most advantageous pricing. Even when NYS Contracts are utilized there is no discipline or established Purchasing Standards. Example, Staples, Copiers/Duplicators and Service Contracts. Current Information Technology System Configuration does not possess Purchasing/Inventory Capability! Critical Information is not available to decision making personnel. To determine the number of Suppliers (3,967) and Dollar Value ($4.OMIL.) of Goods and Services the County purchases annually required a manual effort. Using NYSAC as data source, Counties of lesser, equal or greater populations have a Purchasing Agent. Discussions with Ontario County Purchasing Agent indicates demonstrable year over year savings from the last good buy were between 15-30% which was verified by their County Administrator! Recommendation Recognize the bottom-line value a Purchasing Manager can deliver and hire an experienced certified Purchasing Professional or outsource responsibility. 'MUNIS' installed possesses Purchasing Module but not an Inventory Management capability which is available and should be implemented. Use Purchasing Strategies/Techniques to Achieve Economies of Scale. Term Savings: Savings are projected using 10% the first and second year and 8% per year for the last three years which would give us a savings of between $1.4 and $1.5 million. HIGHWAYS Present Condition: Our system of highway, road and bridge maintenance is complex, with the County, 15 Towns and 9 Villages, all operating Highway Departments. All systems have their origins in history, and this structure developed at a time when transportation was a much bigger cost and problem (a round trip to Lyons could take all day in a horse drawn buggy), when computers were not known, cell phones and radios did not exist, and when machinery was not as effective, complex and costly as it is today. The stated County Budget for its Highway Department is $8,446,722. We were not able to gather the data as to the Highway Budgets of the 15 Towns and 9 Villages, but a sampling of three Towns points to a rough estimate for the total in the range of $10 to $15 million per year, for a grand total of $18 to $23 million for the entire County, excluding the villages. Within the Towns and the County (we have not tallied the villages) there are 15 tractors with mowers, 19 road graders, 12 dozers, 20 rollers, 24 front loaders, 28 excavators (shovels), 121 dump trucks and 53 pickup trucks, as well as many other pieces of equipment (Transport trailers, backhoes, etc). Many of these pieces of equipment are used infrequently (underutilized). The County Highway Department has 56 full time employees and 5 seasonal workers. The County does not operate snow plows, but contracts with the Towns. For some Towns the County revenue for plowing makes up the bulk of the Town Highway snow removal budgets. Town and Village boundaries make costs higher than they should be. Snow plows turn around at Town or Village boundaries, and sometimes even lift their plows when crossing Village lines. Short and complicated runs waste time, fuel, and maintenance costs. This is a patchwork system, with individual Towns having their own specs for sand and salt, and very different application rates. The result is that there is no present price break due to concentrated purchasing in volume, for this item as well as many other purchased items. The maintenance of bridges, roads and other highway infrastructure will be costly, no matter which government takes responsibility, and has arguably been under funded for several years. Recommendations: Look at and deal with the County as a unit. Develop a plan to consolidate highway services in one entity, whether it is structured as a Federation, Authority or simply a detailed inter municipal agreement between all the governments presently having highway departments in the County. The benefits can be great, by reduction of total amount of equipment required and some reduction of total manpower, even if done by attrition over time. It should have centralized operations, perhaps designating the present County facility in Lyons as the Highway 'Group' Center. Management and engineering functions should reside there, and maintenance for the entire county performed there in a very complete and up to date shop. Consider four regional satellite facililties. With the implementation of such a system, we suggest, for example, that at least 25 fewer snow plows will be needed, and that a 24/7 manning schedule could be put together to provide excellent service at lower cost, without affecting State Highway aid coming into the County. Direction and decisions as to how services (new road building, for example) would be allocated should be provided by a Board, probably initially consisting of all Town Supervisors, to whom the Manager would submit plans for approval. In the alternative, the County Highway Department could be reduced in scale and scope. Eliminate all functions except Engineering, Central Garage Maintenance for contract service to Town and Village Departments. Eliminate most County highway equipment, and work force. The County should turn to the private sector, bidding and contracting all paving, road and bridge building work, while continuing its snow plowing contracts with the Towns. Term savings: Difficult to estimate, but if we use roughly $25 million as the present countywide annual expenditure, we should be able to get to 10 to 20% savings. Discounting for conversion costs, and time for implementation of at least a year, we can estimate four years worth at $2.5 to $5 million per year, for an initial term savings of between $10 and $20 million. There would be additional gains to the system from sales of then surplus equipment and reduced need to purchase equipment. For the alternative approach, savings would be likely be slightly less, but still substantial. NURSING HOME Present Condition: The original purpose of the Wayne County Nursing Home was to provide a municipally owned facility which could give health care and residence to the elderly who could not afford a privately owned nursing home. This was a meritorious practice for the years the county could afford it but now the State and Federal governments have enacted legislation and promulgated rules which mandate increased costs. The county recently completed a building of a new nursing home facility at a capital cost of over 27 million dollars. The financing of the new nursing home adds $1.2 mil. of debt service to the annual costs. The average operating cost per bed is currently $7,378 per month, or about $88,000 per year. The projected loss to be funded by County Taxpayers this year is currently $4.5 million. Note that the reduction of the Fund Balance this year is budgeted to be $8 million. The Nursing Home loss is a huge and growing fiscal problem, representing more than half of the amount of Fund Balance reduction planned for this year. Overview: The following chart (not included here) represents the actual expenditures from 1997 compared to the actual revenues for the same period of time thru 2005. Two projections are made for the time period 2005 tluu 2011,: In both cases an arbitrary 3% annual increase (green bar) in revenues was used. Case 1 - represents a 3% increase in annual operating expense. Case 2 - represents an average increase of 7.6% based on the actual expenditures from 1997 to 2005. We will continue to run a negative budget with the assumptions of a 3% o increase in expenses, which represents less than half of the last five year actual average and a 3% annual increase in revenue. THIS STILL REPRESENTS AN AVERAGE ANNUAL LOSS OF $9,598,296 FOR EACH OF THE NEXT FIVE YEARS In 1997, the total expenses were just under 9.5 million dollars and the budgeted revenue was a little under 8.5 million dollars. This has escalated to a proposed budget of 17 million dollars in operating costs for 2005. The current shortfall is over $4.5 million so far this year. If expenses continue as they are for the remainder of the year, there will be a shortfall over $5,000,000 by year's end. There are unknown expenses of utilities, maintenance and others which will not be known until all costs are in at the end of the year. The building of the new nursing home was intended to increase revenues for the future based upon state of the art equipment and programs. However, the State is also facing a massive deficit. and desire of this facility being a break even proposition is highly speculative. Recommendation: Wayne County should provide an alternative method for providing nursing facility services to its residents. In particular, it is recommended that these facilities should be leased or sold to a private firm that has the experience and resources to operate these facilities to meet the needs of the county residents. Wayne County should get out of the nursing home business and lease or sells the building to a private operator. This will increase revenue for the county and reduce employee headcount and all its affiliated benefits cost, while still providing service for county residents, while maintaining job opportunities within the county. County operation of this facility is no longer feasible. While it is a splendid new facility with experienced and caring staff, a privately operated program can provide very excellent service. Current employees will be needed by any new operator, and an RFP should include preferential, hiring of incumbent staff. The County should offer both the old and new nursing home facilities in the package for privatization, as it is possible that private firms will be deterred from bidding because of the huge capital investment in the new facility, while a combination of an assisted living facility in the old facility with the present Nursing home might make more economic sense while providing more services to residents and creating new jobs in the County. County operations now temporarily housed in the old facility could be moved to the presently underutilized Nye Road facility at little cost. Term Savings (Loss Reduction): $40 million to $45 million. DATA PROCESSING/INFORMATION TECHNOLOGY Overview: 'Data Processing' is no longer a term that should be used to describe the computer processing and communication of information necessary to meet the County's needs for real time information and communication. Data Processing is the old method of gathering information in batches, processing that data and then returning it to the system user. Information technology is a much more descriptive title for the computer function of the County today, as it should provide a highly user friendly system for communication within and between departments, as well as operations and personnel records for archival and operation measurement purposes. Immediate and accurate communication and data recording can best be handled by a robust network, standardized computers, software thatmeets the needs of the users, well trained users, and a cooperative 'team centered' approach to supporting these necessary elements. The technology used by the County is not an end to the means, but a means to the end...more effective and productive work, and a more efficient use of human talents and effort. Computers should not be thought of as devices that distribute information any more than it can be said that telephones create communication. People do the communicating, computers are just the tools. Installation, maintenance and computer support activities should be handled by the Information Technology support group, leaving the use of computers to working department people. Present Condition: The department has been doing a commendable job of maintaining a patchwork of applications with some ancient and near obsolete operating standards. The recent purchase of the new software financial package provides and opportunity to standardize applications throughout the County. This expectation has been established and needs to be supported and nurtured. Recommendations: Develop a County user group (Consisting of representatives of many departments) to meet with the Information Technology Group to agree on current and future County needs. Support the use of software that is usable system wide and minimize/eliminate specialized or unique software development. Increase staffing level of the network people. Use contract services where available and appropriate Develop a call center/support desk for quick assistance for user problems and documentation of staff development and training needs. Select and standardize on an office suite of software for all County users, to facilitate communications within and. between departments for improvements in overall efficiency. Perform a needs assessment for the County and each of the departments before the addition or development of any new software solutions. With the centralized IT approach, assigning use of the system to the user and responsibility for IT problems and their solutions to the IT group, tools and infrastructure to assist in that support function should be added. The County has 700+ users and presently only 5 network/workstation support personnel, although industry recommends one support provider for 25-50 users. More should be added. Centralize data on the network to insure its safety and reliability. Cost Savings: Investment in this area is an investment in enabling technology, enabling and assisting much of the savings in other recommendations of this report. Specific savings are not estimated here but proper efficiency of the system will allow for less people in the future. MENTAL HEALTH Present Condition: The Wayne County Mental Health department has 80 full time and 10 part time employees and a budget of almost $7,000,000 with State aid reimbursement of about $6,000,000. These services are provided at the Nye Road facility in Lyons. Approximately 60% of their patients are on Medicaid. Recommendations: It appears the County is in competition with private practices for mental health services. This is an area which clearly has sufficient private professionals capable of administering the services needed. The County is in competition with these same private practices for the services of these people. The Nye Road facility is a large building which is only partially used by Mental Health. If this department was either terminated or reduced to satellite offices, that building could be utilized by other departments. The Team has been told that the old ICF building which adjoins the Sheriff's department must be demolished because of health reasons. 911, which is presently housed there, the Sheriff's ID and Civil offices could be transferred. In addition, the building is large enough to accommodate those departments which are in the old Social Services building on Williams street in Lyons and that building could be sold or leased for additional revenue. If it is sold, it would be put back on the tax rolls for the Village and Town of Lyons which would help ease their tax burden. Term Savings: Although there is substantial reimbursement for this program, it is still costing the taxpayers about $1,000,000 per year. Over the term it would be a $5,000,000 savings. SALES TAX TO SCHOOLS Present Condition: Of the $35,000,000 received from the State in the form of sales tax rebate, $5,400,000 is given by the County to the schools in Wayne County out of the Town and Village portion. Recommendation: This matter is very controversial. If the County were to retain the money and reduce the property taxes by an equal amount then the Team could support this concept. However, if the County was to just spend the money on additional programs then it is better left where it is so the school taxes would not be elevated to compensate for the loss. Term Savings: There would be no savings unless the money was retained by the County and used directly as a reduction in taxes QUALITY SERVICE Present Condition: Wayne County government is a service oriented business and the taxpayers are the customers. As in any successful business, they must be treated with courtesy and respect. They must strive for efficiency and deliver a service which is greater than the taxpayer expects. Recommendation: The County should adopt a training program with specialists in human behavior. They must train the employees to deliver a service which is raised from one of mediocrity to excellence. Term Savings: A cost savings in dollars cannot be established at this time because it is difficult to determine how efficient the employees will become. Much of this will depend upon the level of training delivered and to what extent the workforce could be reduced through that gained efficiency. However, a cost savings will be gained through greater efficiency which would lead to less employees. The objective of this program would be to ask the employees to work smarter, not harder. EMPLOYEE SUGGESTIONS Present Condition: The County employees are a valuable source of information in the operation of the multitude of tasks they perform. Recommendation: A system should be put in place where the employees can contribute their ideas. This should be a secure system where the employee can be identified and rewarded for their contribution or remain anonymous if so desired. All should feel free to make contributions without fear of recrimination. In any event, the employee should be challenged regarding their position and the duties they perform. They should question what they do and how they could perform better. Management should review these suggestions, with the employee, if possible, and lend support to the concept and work toward achieving it, Term Savings: Again, it is difficult to quantify because it is not known what kinds of suggestions the employees will submit. Hopefully, they will strive for more efficiency and less employees. PUBLIC SAFETY Present Condition: The Sheriff's department has 187 employees. It is broken down to 70 police, 84 in Corrections, 14 court security and 19 support stafff. There are also an additional thirty two part-time employees including two jail physicians. The total budget is slightly over 11 million dollars. These are essential services to provide for the safety and well-being of our citizens. Recommendation: There are some areas which need exploration to curb expenses. For example, there are many retired police officers who are looking to supplement their retirement income and could be utilized on a part-time basis. Their wage would be considerably less than a full time officer and would receive no benefits. The salary for part-timers is $12.98 per hour and the salary range for a full time officer is between $33,600 (16.14 @ hour) and $54.500 (26.20 @ hour) which includes a 10% longevity bonus. In December, 2004, almost all part-timers were not scheduled to work. At the same time, there was over 600 hours of overtime generated by the department in overtime for full time officers. There should be a larger budget for part-time officers to eliminate this situation in the future. The savings would be in diminishing the budget fbr the full time officers. There is a new concept in Corrections called 'Pay To Stay'. This is a procedure where an incarcerated person, upon conviction, would reimburse the county for the expense while they are in jail. It is realized that collections may be a problem but can be remedied by the court making payment as a condition of probation. Also, a private collection agency could be retained to make collections on a commission basis. Legislation may be needed on a State level to make this happen. State Senator Michael Nozzolio and Assemblyman Bob Oaks should be contacted for assistance. Senator Nozzolio is Chair of the Crime and Corrections Committee. At the present time deputies are needed to transport prisoners back and forth from the Court House in Lyons to the Jail on route 31. This is a very time consuming task which necessitates deputies doing the transporting instead of doing road patrol duties. A teleconferencing system could be installed between the two facilities which would eliminate this practice. At present, only people charged with misdemeanors can be arraigned with this system. Again, State legislation is needed to implement a law which will allow this to happen for persons being arraigned on felonies. Most people arraigned in County court are there on felony charges and local municipal courts handle most on the misdemeanors in their own jurisdiction. There are 77 vehicles assigned to the Sheriffs department. Road patrol deputies are allowed to take their police vehicles to their residence while off duty. This practice is a result of previous contract negotiations which should be addressed in the next negotiations and eliminated. County vehicles are purchased on State bid. They should look at leasing these vehicles and see which is more cost effective. Leased vehicles are maintained by the leasing company which would be a substantial savings. Term Savings: If the 'Pay to stay' concept is adopted, there could be a substantial savings but cannot be estimated because there is no way to estimate the amount of prisoners which will be incarcerated, how many can pay and when the legislation will be passed to allow this program. Teleconferencing would relieve two additional deputies from transporting prisoners back and forth and also reduce the need for additional cars. The additional use of part-time deputies at the rate of $12.98 would be an obvious savings. STATE AND FEDERAL GRANTS Present Condition: The County has received Grant assistance from various State and Federal sources, but has no systematic method for finding grant opportunities and writing Grant proposals. Grants can be a double edged sword since there is usually, 'No free money' and County cost contributions and on-going financial responsibility is usually required. However, where the purpose of the grant is consistent with the-business and policy directions of the County, they can be very important and helpful. For example, if the timing is right, it may be possible to find Grant assistance to implement some of the recommendations made in this report, as they may be viewed as model or pilot programs. For many Grant situations, the cost of Grant writing can be included in Grant costs for reimbursement as an in-kind contribution. Recommendation: Create a County wide office of Grants. One person tasked with coordinating and writing all Grant applications, working with Department heads and the Board. This will be the person to whom Department heads can send opportunities of interest, supply information needed and cooperate in the writing process. Term Savings: Will depend on the amount of Grants sought and their value. COUNTY EMPLOYEE CAREERS Present Condition: Through the 1970's and well into the 1980's, public employees generally lagged behind their private sector peers in terms of pay levels. Consequently, there was a tendency, accelerated by the growing strength of public sector unions, to extend very strong fringe benefit packages, including legislatively imposed excellent and expensive retirement programs. County Fringe benefit packages (Health insurance, paid time off, retirement contributions, Dental and optical insurance, etc) are commonly far in excess of those offered by Wayne County private sector employers. In the last 15-20 years salaries and wages for County employees have been improved to the point where they also often exceed their private sector equivalents. There are perceived to be barriers to effective management and leadership of County Employees, including concern for 'Union' reaction or 'Civil Service Rules', and the result is often poor productivity and inefficiency of operations. This is exacerbated by widespread lack of training and management skills in even the basics of formal, and written work performance evaluations and employment performance documentation. Recommendation: Retain a competent and experienced personnel relations firm to: 1. Conduct a survey to determine reasonable guidelines for comparable wages, salaries and fringe benefits (recognizing that while some jobs may be over paid, others may be underpaid); 2. Examine current personnel record keeping and management practices and train all department heads and supervisors in proper methods and reporting; 3. Retain a different firm to consistently conduct bargaining with all 7 bargaining units, working with the Board to develop long term and short term goals for contract changes. Term Savings: Recognizing that the benefit of people understanding and performing their jobs better is not an instant matter, and that consequently, benefits will not be visible for a year or two, over the five year term even a 10% improvement in effectiveness to assist in the painless work force reduction by attrition program can be $10 million to $20 million, considering that total employee costs for the five year term on the present cost basis will be well in excess of $250 million. ECONOMIC DEVELOPMENT Present Condition: Economic Development and IDA activity has been under-funded for many years, when compared with NYS Counties with substantial new job creation and tax base growth. The present year $186,000 was the total allocation to Economic Development. This is about 0.0013% of the total budget. A healthy business needs to allocate at least 3% of sales volume to R&D to stay healthy. Economic Development can be viewed as the R&D portion of the County Business Plan. Since attrition (job losses) are inevitable, as businesses down size, move out or go out of business, we must be developing new employers for the County just to stay 'even'. The function of Economic Development is to increase revenue for the County, and its residents. Wayne County has many assets that are underperforming in terms of economic activity. We have a great quality of life, great location with Rochester and Syracuse and their educational, cultural and sports opportunities, as well as a very large number of technology centers readily available, given our tremendous geographic and logistics accessibility. This is a great place to do business, and we need to be promoting it. The County has entered into a partnership agreement with Greater Rochester Enterprises, and is now receiving the benefit of its highly professional, much larger budget, advertising and promotional programs. Recommendation: Fund Economic Development at a much higher level. Clearly 3% of budget is unrealistic, but 1% or, say, $1 million could be wisely and effectively used. It could be funded by just a small portion of the cost reductions proposed elsewhere in this report. Before such spending, is authorized, require the Executive Director to propose a results oriented plan for spending to achieve specific targets for both retention and new employment, measured over a three year period. SOCIAL SERVICES Present Condition: Since 1999 the total Budget for the Department of Social Services has increased from $26.3 million to $38.2 million in 2005 or an increase of 45%. The cost to the County has increased $13.9 million to $21.6 million over this same time period or 55%. Driving cost factor is Medicaid which has increased from 1999 level of $7.9 million to $17.4 million in'2005 which equates to 120% increase. County's cost to support Medicaid has increased from $7.3 to $15.0 million or increase of 106%. Caseload which drives staffing level resources and is defined as PublicAssistance, Food Stamps and Medicaid support has risen during this same time period from 6214 cases per month to 10,700 per month for the first six months of 2005 or an increase of 72%. DSS has implemented 21 process improvements actions with support of NYS Consultant at no cost to County which has allowed for significant productivity improvements in case workload. In 1999 the case workload per month was 6214 with 159 support employees or 39:1 ratio. In 2005 the case workload per month is 10,700 or 74:1 ratio. This performance reflects a 90% INCREASE IN PRODUCTIVITY SINCE 1999, an excellent improvement, and an example of what can be done throughout the County. Recommendation: With the recent addition of an Information System Professional, further reductions in Administrative cost structure should enable further productivity gains. The Dept. should review its budget structure to identify Cost as 'fixed and Variable' This step would allow Management the ability to 'Flex' based on critical workload indicators. The use of the NYS Consultant by the Director was one of best 'Management Practices' observed and is highly recommended that other Directors follow that lead, since productivity improvements are vital in controlling and improving our cost structure. Term Savings Although it is difficult to quantify at this time further cost down opportunities should be realized which will have a favorable impact on 2006 spending level. EMPLOYMENT AND EMPLOYEE RELATIONS Present Condition: This is the largest single cost factor, the largest area for savings, and the most vital area for the delivery of County services. County employees actually deliver services. Elected leadership does not, nor should it, perform the day to day work of the County. Employee relations cross-cuts every recommendation of this report in one way or another. Last year (2004), The County spent $50 million on employee wages, salaries, benefits and payroll costs. It had 885 full time and 196 Part time positions, for a total of 1081 employees. Since 1999, full time positions have increased by 26% (from 702 to 885) and part time by 13% (from 173 to 181). Virtually all County employees are included in seven different collective bargaining units, and are represented by unions, with CSEA representing about 75% of the employees in its two units. Direct payroll cost has increased by 25.2%, from $28 million to $35 million, and fringe benefit costs in that same five year period have increased 118%, from $6.5 million to $14.4 million. As of 2004, total payroll and employment costs were about $50 million, increased over the term from $34.6 million, an increase in employment costs of 30% o since 1999. And that trend continues. Fringe benefit costs are now a 29% addition to payroll cost. County employees are responsible adults, keenly aware of, and concerned for, the consequences of the present policy directions of the County: They know that bloated budgets will result in fiscal crisis (as demonstrated by Erie County), leading to massive and hastily planned layoffs, wrecking County services and employee careers. Simply put, if consecutive and compounding 12-15% tax rate increases become necessary to balance budgets, as can be forecast today on present trends, that disaster looms on the very near 3-5 year horizon. Problems: 1. Too many employees, too much employment cost, growing much too fast. Little or no flexibility between and among departments in the sharing or shifting of employees. 2. An uncontrolled Health Insurance Cost spiral: From $3.4 million in 1999 to $6.7 million in 2004, a nearly 100% increase. In addition to the active employees, well over 200 of retirees are receiving 100% County paid health insurance coverage, even though they may be are Medicare eligible and large savings could be had by conversion to supplemental package coverage for those retirees. (see Health Insurance section of this report). 3. County contributions to the State Employee Retirement System have increased over 15 fold in the last five years, to about 15.5% of payroll, all at County Taxpayer Expense (there is no employee contribution). This pension system is in addition to the Employers match contribution of 7.65% to Social Security as paid by all private sector employers. (County employees retire with both Social Security and State Pension benefits). Recommendations: 1. Immediately establish an internal County Task Force, charged with making specific recommendations for improving the efficiency of services at the operating level in all major departments. Its task should be to preserve and improve services quality while saving as many jobs as possible, within an over all requirement of delivering a total employment cost reduction for the 2007 budget year of at-least 20%. This is very possible: About 150 employees leave County jobs each year due to retirements, resignations and other reasons. Work force reduction by attrition is the least disruptive method for employees and residents. The Task force should consist of selected department leadership, selected union executive committee members, some rank and file workers, and the County Administrator. It should be led by a skilled outside (third party) facilitator paid by the County. It should have a very short time line, and work intensively, with a report due within 60 days of creation. It should-not include people employed by a union, or in the county personnel office, to avoid any tainting of, or confusion with, the collective bargaining process. 2. The reshaping of County Government that is necessary requires the involvement, understanding and the collaboration of County employees. It is much bigger and deeper than the negotiation of union agreements. While the Task Force is at work, and starting now, the Board should search for and retain Special Counsel, to work with'the Board and employee groups to execute those goals. This firm must have a strong performance record, expertise in Civil Service Rules, Labor contract negotiations and training of supervisory personnel. This will be a major expense, but one that is pivotal. The Board must have confidence in the Firm and the Firm must have confidence in the Board. It need not go to the lowest bidder. Balanced against the 5 year term results cost differences will be inconsequential. 3. Immediately institute an absolute hiring freeze for both new positions and vacancies. Vacancies must be filled by re-assignments re-training and restructuring. There should not be departmental lines that cannot be crossed. Retraining and career expansion for present employees in all departments to meet the present and future needs of the County must become standard operating procedure. The only possible exceptions to a new hiring freeze can be positions requiring licensure or professional credentials for employment, after full and careful Board consideration of all alternatives in each case. 4. Collective bargaining must be taken seriously by the County. With $50 million per year at issue, the best and most professional assistance must be sought and heeded. This is not a place to be penny wise and pound foolish. The representative(s) selected should have experience and deep knowledge of civil service rules, the Taylor Law, bargaining techniques, and credibility with the Union structure. Any less than that is a recipe for disaster considering that changes that must be made and absorbed in these rounds of bargaining. 5. One major issue and point of common concern is Health Insurance and costs thereof. See the Health Insurance recommendation of this report, but note that employee involvement in the solution is basic. 6. Pension Contribution costs are required by law, so there is little that can be done other than to reduce employee head count and thus compensation costs. 7. Ask for the support and involvement of employees. Have confidence that they know what they are doing, have good ideas, and can accept reality, if they have input into decisions. This applies to all levels from Department Heads through laborers. Establish working teams to come up with solutions and time lines that can be widely understood accepted, if not liked. 8. Starting with Department Heads, clear written statements of job performance requirements must be made. Such statements must be made a part of the Personnel files for every employee, and annual, serious evaluations must be systematically made, with written statements of areas for improvement and the measurements to be made for them. Projected Term Savings Available: Estimated at a minimum of $30 million. Term Savings: Not possible to estimate, but will improve overall efficiency and effectiveness.
Copyright
©
2005 |
   Ads have a Patent Pending. Click Here for More Information  |
