Friday, May 29, 2009

How to Make Cuts in Tough Times but Strengthen Core Services

These economic times are requiring all of us, whether in our homes or businesses, to make tough decisions and prioritize where we are spending our money. Governments and elected officials should be able to apply these same principles to spending the public's money, but it happens all too rarely. It's easy to raise taxes, grow programs and employees, and build 'fiefdoms' when times are good. But when tax revenues are reduced, adjustments downward simply don't happen as rapidly and with the same fervor as the growth.

I look to the Evergreen School District as a great example of prioritizing in the face of a significant budget shortfall.

It's my understanding from conversations with Superintendent John Deeder that he and the School Board have made $11 million in cuts and reductions --- but NOT ONE CENT has been cut from certified teaching staff. In other words, Deeder and the Board have prioritized the students and the classroom over all other offerings in the School District. They have trimmed $3.75 million in the administrative offices (administrative support staff) and trimmed some $1.5 million in employee costs as a result of the employees sacrificing compensation and benefits increases. Workforce reductions are never easy. But Evergreen's choices reflect a commitment to keeping their priorities front and center.

For the City of Vancouver in this recent supplemental budget, and even with the biennial budget adopted last December, there was limited trimming in administrative support. However, core services were put on the chopping block (or frozen) both times.

The Mayor at the time should have insisted that the City Manager look at opportunities to further trim costs from city administration. There is no doubt these cuts would be painful, but the trimming would be in proportion to the dozens of employees already laid off. In other words, fewer employees requires less administrative support.

As Mayor, I would have insisted that the City Manager look to further INCREASE the contracting of private, outside support for specific activities like professional design services and parking management. With a 'hungry' private sector, the City would no doubt receive highly competitive pricing for services for city contracts, as has been demonstrated with construction project bidding.

If the City contracted more with private industry, the following would occur:
1) Those most efficient and capable of providing services would be doing so;
2) Fewer 'overhead' City employees on the payroll would save costs -- some 70% of City costs are the employees;
3) Those capable City employees would be hired by private firms to help with the new and increased City contracts and join the private sector; and
4) A makeshift 'stimulus package' would be created, providing more opportunities for business and employers (who, remember, generate the tax dollars that go to the City) to grow and expand.

Instead, the City Manager proposed to contract LESS with private companies to further save city employee jobs. A noble but impractical proposal if we are to focus on maintaining and/or improving necessary core services.

As Mayor, I would insist that the City Manager look into efforts by the City's Parking Advisory Commission to save the City some $800,000 year in program modifications. A member of the advisory board took it upon himself to investigate opportunities to save the taxpayers of Vancouver money by streamlining and improving the parking program. After obtaining proposals from private companies to manage the parking structures (and the enforcement), he showed that the City would save significant monies.

That $800,000 in savings would allow for the hiring of 8 neighborhood police officers to be proactive in addressing property crime, identity theft and drug houses in our community. Or, $800,000 would allow for the hiring of 10 more city operations staff to allow for more response to our deteriorating roads.

Unfortunately, suggestions like these have fallen on deaf ears at City Hall. It's tough to get an entrenched politician to put energy into 'reforms' that will better prioritize our tax dollars.

These are a few examples of the 'out-of-the box' approaches I will fight for as Mayor, in order to prioritize safety in our neighborhoods, after school programs for our children, and mediation services to keep small disputes from clogging our court system.


J. Shirley said...

Hi Tim,
Thanks for your follow-up from our previous post. I was hoping to see something, as a critique without alternatives is hollow.

As a former consultant, I'm happy to see you look towards the private industry as a way for cost savings.

I just have a simple question. Vancouver has a strong business community, but many requirements still pull in people from Portland. What's your stance on hiring private firms out of Portland, especially if they offer a significantly lower rate and higher quality?


roruda said...

Thank you for being responsive to questions. Budget shortfalls are difficult for anyone to face; No one wants to see jobs cut, but that is usually the only answer-- how its done is the critical question. I appreciate that you have gone to other "agencies" that have faced shortfalls to see what has worked and what hasn't. That is refreshing thinking.

Tim Leavitt said...

You're welcome!

As for contracting for services, my perspective is this:

Indeed, there are many business resources and talents right here in Vancouver.

I have long been bothered by the contracting out of our community for services, when it was highly apparent that local companies could have easily performed the work. According to the City Attorney, there is a fine line of 'discrimination' when preference to local business is attempted.

My perspective:

If at all possible, the City and other local governments should contract with local companies.


These companies employ, for the most part, our neighbors, friends and family members.

Many of our local businesses have ownership and employees with philanthropic attitude, and give back to our community through volunteerism, event sponsorships, etc.

The City must be MORE focused on growing local businesses and employers, to further increase the tax revenues and allow for the adequate funding of even the most basic of services -- like police, pothole repair and sidewalk construction!

If companies from outside of Vancouver are serious about establishing a long-term working relationship with local government agencies, they should consider opening an office here!