Doing More With Less: The Show Must Go On

1
Doing More With Less The Show Must Go On

• Maryland Association of Counties
• August 13, 2009
• Ocean City, Maryland

2
In This Presentation

• Current Economic Climate
• Short-term Strategies
• Long-term Strategies
• Case Studies
• Service Sharing
• Resources

3
Economic Climate Headlines from Across the
Country

• Minnesota Cities Face State Aid Cuts, Governor
  Suggests Pay Freezes, Reserve Funds
• Unions Give Up Raises To Help Balance Budget
• Phoenix-Area Localities Raising Fees, Taxes And
  Rates
• Building Department Cuts 13 More Jobs
• Water/sewer Rate Hike Proposal on Agenda
• Citizens Call for a Reduced Tax Rate
• Bad, Worse, or Worst?

4
Short-term Strategies Balancing the Budget

• Strategies
• Initiate hiring freezes and furloughs
• Restrict spending
• Freeze or reduce wages
• Delay capital expenditures
• Postpone maintenance
• Use reserve funds

5
Long-term Strategies Managing a Multi-year
Downturn

• Spending outpacing revenues (structural deficit
  issues)
• Strategies need to include
• Both expenditure and revenue side
• Service reductions
• Service improvements, models for delivery
• Involvement of elected officials, staff and
  public

6
Long-Term Strategies Managing a Multi-Year
Downturn

• Analyze current fee structure
• Evaluate cost allocation and cost recovery plan
• Examine all revenue sources
• Eliminate wasteful processes and reengineer for
  process improvements
• Prioritize municipal services against required
  services, strategic plan, citizen survey, etc.
• Share services for productivity and cost
  efficiencies

7
Case Study The Problem

• Facing a 70M cumulative deficit by 2012
• Corporate infrastructure needs
• Technology
• Performance management
• HR management
• Physical infrastructure needs
• Lack of historical investment
• Rapidly decaying facilities, roads, and water and
  sewer infrastructure

8
Project Approach

• Developed multi-year financial model
• Indentified actions required to achieve financial
  stability in the General Fund
• Analyzed department and program level operations
  to identify efficiencies and improve
  effectiveness
• Created a long-term model for fiscal and
  organizational sustainability

9
Financial Countermeasures

• Increased City real estate tax
• Created a formal policy for payments in lieu of
  taxes for tax-exempt real property owners
• Developed cost recovery formulas for fees and
  charges
• Instituted a health insurance cost sharing plan

10
Operations Analysis

• Instituted best practice supervisor to
  subordinate ratios
• Streamlined police command and organizational
  structure
• Modified Fire Department shift schedule to
  achieve substantial cost savings
• Consolidated and integrated public works staff
  functions

11
Results Converted Projected Deficit into a
Surplus
12
Service Sharing

• Sharing staff
• Sharing facilities
• Sharing with municipalities, other counties,
  school districts or the state

13
Examples of Service Sharing

• Heavy equipment sharing
• Law enforcement
• Planning and development services
• Animal control
• Code enforcement
• Emergency communication and dispatch
• Co-located facilities
• Shared utility systems

14
Resources

• Government Finance Officers Association (GFOA)
• www.gfoa.org
• Over 30 recommended practices for Budget and
  Fiscal Policy, including
• Establishment of strategic plans
• Setting of Government Charges and Fees
• Financial Forecasting in the Budget Preparation
  Process
• Long-term Financial Planning
• The Use of Trend Data and Comparative Data for
  Financial Analysis
• Alternative Service Delivery Shared Services
• Public Participation in Planning, Budgeting, and
  Performance Management

15
Thank YouCatherine Tuck Parrishctuckparrish_at_man
agementpartners.com240-832-1778

• More information at
• www.managementpartners.com