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HomeMy WebLinkAboutAgenda - 04-16-1996 - X-A 1 ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No X-q ACTION AGENDA ITEM ABSTRACT Meeting Date: April 16, 1996 SUBJECT: Final Report of the Innovation & Efficiency Committee ----------------------------------------------------------------------- DEPARTMENT County Manager PUBLIC HEARING YES NO X ------------------------------- BUDGET AMENDMENT REQUIRED YES NO X -------------------------------- ------------------------------- ATTACHMENT(S) INFORMATION CONTACT Committee Report Dan Brummitt, Chair, 918-4250 Rod Visser, x2308 TELEPHONE NUMBER Hillsborough 732-8181 Chapel Hill 968-4501 Mebane 227-2031,14 688-7331 ----------------------------------------------------------------------- PURPOSE: To receive the final report of the Orange County Innovation & Efficiency Committee. BACKGROUND: In October 1995, the Board of Commissioners appointed a 17 member Innovation & Efficiency Committee to explore opportunities for, and make recommendations concerning, additional improvements that the Board may want to consider implementing in order to enhance the degree of efficiency and innovation with which Orange County government operates . The Board charged the Committee to identify possible improvements and to deliver its recommendations by April 16, 1996 . Dr. Jack Vogt of the Institute of Government agreed to serve as facilitator for the Committee, which convened in late November. Since then, it has met on numerous occasions, most frequently as members of three self-identified subcommittees : Organization and Staffing; Equipment and Purchasing; and Technology. The accompanying Committee report incorporates the three subcommittee reports as approved by the full committee. Committee Chair Dan Brummitt will make a brief presentation of the major Innovation & Efficiency Committee recommendations. He and other Committee members will be available to respond to Commissioners ' questions . The final element of the Committee ' s charge from the Commissioners is to complete its business and inactivate at a time agreeable to the County Commissioners. After receiving the report, the Board may want to consider a timetable for the Committee to finish its work. That could lead to staff ' s undertaking implementation of those recommendations that the Board, upon later reflection, may want to pursue . 2 RECOMMENDATION: The Manager recommends that the Board receive the report as information, and consider providing direction and feedback concerning next steps to the Committee and staff either now, or at a subsequent Commissioners ' meeting. 3 Report of the Innovation and Efficiency Committee to the Orange County Board of Commissioners April 16, 1996 Background In October 1995, the Orange County Board of Commissioners appointed a 17 member Innovation and Efficiency Committee composed of 11 citizens and 6 County staff members. By subcommittee, those involved in the preparation and review of committee recommendations are: ORGANIZATION/STAFFING PURCHASING/FACILITIES TECHNOLOGY David Cannell Dan Brummitt Ted Abernathy Bonnie Davis John Homer Lindsay Efland Frances Douglass Stuart Wallace, Chair Joel Harper, Chair Jim Goldstein Janet Sparks Norm Gustaveson, Chair Gwen Price Norman Umstead Mary Willis The main purpose of the Committee was to explore opportunities for additional improvements that would increase the efficiency and innovation with which Orange County government operates. The Board adopted a specific charge to the Committee with several key underlying themes, including: to become familiar with how, and under what legal parameters, Orange County government operates; become familiar with existing examples of efficiency and innovation in Orange County government and in governmental settings nationwide; focus on potential innovation and efficiencies in services the Board has chosen or is required to deliver; 1 _ _ 7 4 focus on changes likely to achieve substantial cost savings or significant operational improvements; and to deliver recommendations to the Board by April 16, 1996. Dan Brummitt was appointed Chair, and Stuart Wallace, Vice-Chair, of the Innovation and Efficiency Committee. Dr. Jack Vogt of the North Carolina Institute of Government served as facilitator for the Committee. In late November the Committee held an organizational meeting. At its second meeting in mid-December, the Committee identified the main areas it wished to explore and organized itself for work in three sub-committees: Organization and Staffing; Purchasing and Facilities; and Technology. The subcommittees met numerous times between December and March to review, analyze, and discuss information that helped them formulate recommended improvements. The subcommittees reported back to the full Committee on a monthly basis concerning the progress and tentative recommendations. The main portion of this report to the Orange County Commissioners consists of the Innovation and Efficiency Committee's recommendations based on the work of its subcommittees. Preamble to Innovation and Efficiency Committee Recommendations Over the past five months, at the direction of the Orange County Board of Commissioners, the Innovation and Efficiency Committee has made a broad evaluation of numerous County services. The Committee's intent is to identify processes that the County may employ to enhance its fiscal position. The Commissioners have stated that they are generally satisfied with the level of services that are provided to our citizens. Our mission, therefore, is to minimize delivery costs while retaining the current quality levels of services. Current Innovation and Efficiency Efforts. As the Committee's process evolved in subcommittee work, it became apparent that County staff was already aggressively pursuing numerous opportunities in the areas of innovation and efficiency. Examples of these include: • Paperless purchasing system _ • Employee incentive programs • Social Services efficiency efforts • Alternative EMS service delivery and financing models • Innovative financing for Triangle SportsPlex We also commend the entire County staff for their support in the broader innovation and efficiency process. Our Committee requested tremendous amounts of information in a relatively short period of time. County staff was most generous with their time and services and contributed greatly to the success of the Committee. Committee Focus. Given the narrow time frame of this review, our Committee focused on actions that may have the highest impact on the budget. We identified items that generally consume the most budget dollars, and we looked for corresponding ways to save money. 2 5 County Expenditures--Schools. The school systems, for example, consume the greatest amount of County funds in relation to other areas of the County budget. The Committee is deeply concerned, therefore, about future trends in expenditures. If these trends continue at the same rate in the future, pressure to increase the total County budget (and by implication, the County tax rate) will place an even greater burden on those County citizens already bearing a heavy tax load. Because each school system reports to a different authority (School Board), our review does not encompass the schools' operating budgets. However, it is important to note that the County's per pupil expenditure for current expense has increased in the past five years from $1,310 per pupil to $1,571 per pupil, a total per pupil increase of 20 percent. The total amount appropriated for school current expense has increased by $6.3 million, a 42 percent increase over that same five year period. Furthermore, the County has invested an average of $8.5 million per year in capital improvements and debt service of funds borrowed for school improvements, over the past five years. While the Committee recognizes growth in student population over the past few years, it also believes that based on current growth projections by the State Department of Public Instruction through the year 2002 that Orange County has (within its existing structures) the buildings to accommodate that growth. The Committee recommends, therefore, that careful consideration be given to all viable alternatives before investing more funds in capital projects. The Committee also recommends that the Board of Commissioners encourage the Boards of Education to employ a similar kind of "in depth" innovation and efficiency analysis to identify potential savings within the school systems. Although we recognize that the Commissioners have little direct say over school expenditures, we do feel that their expertise and influence in such matters is invaluable. , County Expenditures--Human Services and Outside Organizations. The Committee also looked at other trends in County spending, particularly in areas of Human Services and financial support to outside organizations. Together with school spending, the overall increases in expenditures point to the need for a more systematic means of analyzing trends in spending. Because this kind of analysis is so important for all participants (elected officials, program staff, and citizens) we feel that the County should develop a formal capacity for program and trend analysis. Such analysis could be updated annually, would provide quick access to credible and useful data, and could flag or highlight unusual spending patterns. Moreover, the analysis would provide other useful "indicators" related to the history or background of expenditure trends and thereby help to discern the basis for such spending. Evaluate Future Success. Finally, the Committee believes that the core of the Committee's recommendations embody essential tools for crafting major efficiency and cost savings. We recommend, therefore, that the Commissioners allow these tools to be put to work as soon as possible. We also believe that because of everyone's hard work and investment in the innovation and efficiency process, we would like to measure our aggregate success by 3 '6 reconvening in six to eight months. At that time, the Committee could determine the progress made thus far, and offer any guidance for continued success. Recommendations The following are the recommendations from the Innovation and Efficiency Committee to the Board of County Commissioners. These recommendations are presented in no particular order, as the Committee did not prioritize its recommendations. Recommendation 1: Adopt a long range view aimed at identifying potential savings that may be derived from flex time employee schedules, work that may be performed at home, resumption of night court, and shared use of facilities by more than one department. Recommendation 2: Continue as a County to consolidate space, as in the new Southern Service Center and as in the proposed purchase of the old Colonial Printing building. The consolidation of services makes them more accessible to the public, and reduces costs of leasing. The payback over the long run by consolidation or purchase of space exceeds the payout in leases and in inefficient use of space and delivery of services. Recommendation 3: Continue to encourage and pursue efforts currently under way to implement paperless purchasing and financial transactions. County staff is to be commended for this effort and for its awareness of the need to promote efficiency and innovation in county government operations. Recommendation 4: Adopt as a County a process and model to systematically evaluate County operations, including existing operations and requests for additional resources. a) The goals of evaluating County operations are to enhance productivity and efficiency and to provide for organizational renewal through: • Minimizing and streamlining bureaucracy. • Reviewing positions as these become vacant, and, at the discretion of the County Manager, eliminate or realign those positions which are determined to no longer be needed in the area assigned. • Consolidating services and/or functions when at all possible. 4 7 b) The Committee recommends a focus and approach which is comprehensive and in- depth. Evaluations should be conducted outside of the budget process to allow ample study time and focus. Because of the comprehensive nature of the evaluation process, it is recommended that it be scheduled on a priority basis by the County Manager for areas to be given this special and unique focus, rather than being scheduled in each department every year. c) The Committee recommends that the County use a model for this evaluation which includes the following elements: • Use of an in-house evaluation team designated by the County Manager, which includes staff at the Assistant Manager and Department Head level. • Involvement of affected departments in the process. • Openness to new ideas and identifying and exploring options. d) The recommended model is as follows: 1) Identify Services for Evaluation - The County Manager, in consultation with department heads, should identify a priority list of operations and resource requests for evaluation. In this, priority should be given to those areas which have the greatest potential for cost savings and better efficiency. 2) Develop a clear statement of the Services and Benefit -The service should be stated in clear, concise terms, defining what the service is; what resources are used to provide the service; and, who benefits from the service. The statement should identify whether the service is mandated. 3) Evaluate the Services - The following questions should be asked as each service is reviewed: a) Does any other agency, department, or government in the community provide the same or similar service? b) Are fees charged which could offset the cost of the service? If so, are the fees covering the cost of the service? c) If the service was discontinued, what would be the impact and to whom? d) How can automation be integrated to provide the service more efficiently? Identify any one-time or up-front costs of automating a service/process and identify the time necessary to pay-back the initial investment. e) Can organizational changes be implemented for more efficient operations? That is, can services be centralized or decentralized across program or departmental lines? f) Is all the work being done necessary? Can any aspect of providing the service be eliminated? If so, what are the consequences? 5 8 g) Is there a way to maximize staff level decision-making? h) Can the service be consolidated by cross-training staff or sharing resources across departmental lines? i) What are the expected outcomes and how are these measured? Are the outcomes stated qualitatively and quantitatively? j) Is the environment or situation changing, or about to change? That is, are new buildings coming on line? Is new equipment to be installed? Are there federal or state laws that are changing? 1) Analysis and Recommendation of the Review - Once the information is gathered, the Study Team will analyze all data and develop recommendations, in consultation with the appropriate department head, for the County Manager's consideration. 2) Records- Records should be kept on internal evaluations of services, and evaluation criteria should be identified so that the process is auditable. e. The Committee recognizes that there are a variety of strategies and resources that may be used to conduct the model evaluation process. Among others are (1) the use of an internal evaluation team as described in the model process, (2) using external private management consultants to conduct evaluations, (3) using local active or retired community business leaders willing to volunteer consulting expertise, or (4) using local University support such as faculty and students. f. The priorities for review should be: 1. County Departments a) Social Services, including Veterans Affairs b) Health Department c) Other County Departments as needed 2. Intergovernmental a) Recreation and Parks b) Public Works (Solid Waste/Landfill) c) Library d) Co-operative Extension Service Recommendation 5: Develop a process of program and trend analysis as a policy making tool for public officials, and to enhance managerial decision making. The process should be open for continuous refinement, and should be part of the finance and budget process. The goals of the program and trend analysis are to enhance efficiency and public accountability through: • Creating an objective and credible set of data that is open to refinement. 6 9 • Indicating spending patterns by department and service. • Indicating expenditures within the framework of constant dollars, population growth, per pupil spending, etc. • Creating a policy making tool for public officials, and enhancing managerial decision-making. The model should: • Explore existing program and trend analysis models. • Identify relevant indicators. • Systematically track spending trends in every area of government. • Analyze data. • Monitor for long-term data analysis (trends). • Systematically report data analysis. Recommendation 6: Develop and implement incentive programs which provide organizational incentives to departments for cost saving and efficiency. In this, the County should consider more budgetary flexibility including the option of allowing a department to retain and accumulate from year to year a percentage of any cost savings for its use on a one time, non-recurring basis in supporting other department objectives and priorities. , Recommendation 7: Develop and implement enhanced incentives for individual employees to promote cost savings and efficiency. Include further enhancing individual employee incentives as part of the planned evaluation process of the two year pilot employee incentives programs already in place which are directed at cost saving employee suggestions and team achievements. Recommendation 8: Develop and implement a written County Strategic Automation Plan as a blueprint for the County's automation enhancements over the next three to five years. Much like the County's Capital Improvements Plan, the Automation Plan would be formally reviewed and updated on an annual basis to ensure that the plan addresses the County's automation needs. Annual review, combined with periodic informal review, would make the plan dynamic and current, and position the County to take advantage of emerging technologies. The Automation Plan would enable any reader - whether elected official, County 7 10 staff, or individual citizen - to have ready access to, and easily understand, the County's strategic direction for automation. The Automation Plan would be developed and implemented within the context of a mission statement for Orange County automation, and based on a number of underlying principles, which would include: a) Focus first on internal service departments (Personnel, Purchasing, Finance) that directly impact all employees, so that each employee has a stake in automation. b) Encourage and seek interdepartmental collaboration. c) Use electronic mail to enhance efficiencies, such as transmission of agenda items. d) Recognize and exploit the potential for automation to expand communications with Orange County citizens. e) Emphasize decentralization of expertise, where appropriate, and develop policies that promote user initiative and decision-making, within established parameters. f) Pursue a computer literate workforce with training in-house for standard uses. g) Identify benchmarks to test hardware and software technology requests, so that hardware and software outside the pre-determined County standard are fully evaluated and exceptions made to these standards on a case by case basis. h) Allow flexibility in departmental budgets for reallocation of resources to purchase minor hardware and software. i) Establish a replacement policy, with an underlying rationale, to address (for example) obsolescence. j) Encourage and seek collaboration with other governments, especially schools. Use of automation to promote efficient, effective and innovative services to its citizens should be an integral part of Orange County's mission. To that end: a) Every position will undergo systematic and periodic review of its functionality to automate manual tasks which reduce time available for services to citizens. b) Position appropriate technology will be made available to each employee. c) A computer literate workforce will be developed. d) Automation needs will be assessed when constructing or leasing office space. e) A strategic plan for automation will be developed. The plan will list the steps necessary to achieve the goals of this mission statement. The plan will be reviewed regularly with regard to implementation and changes in technology. Modifications will be made to the plan as appropriate. Recommendation 9: Limit the funding amount distributed to outside agencies excluding pass-through grant funds, funds to other government agencies [such as libraries] and/or State/Federal mandated programs. Actual expenditures for outside agencies in 1993-94 were $1,920,051. The Board of Commissioners' approved budget for 1995-96 is $2,268,149. This represents a 16 percent increase. Budgets for county operating departments have increased 3-4 percent over this same period. 8 ' 11 Funding for outside agencies should be managed in the following manner: a) The purpose of these grants should be to provide startup monies with a "sunset' provision for length of funding. b) A requesting agency should develop a business plan that outlines purposes for which the grant is to be used, estimated budgets, and expected outcomes that can be documented. c) A definite amount of money should be allocated for outside agency grants before requesting agencies present their proposals. d) A hearing process to review applications should be established prior to development of the county budget. Recommendation 10 : Conduct an annual review of non-taxable property to categorize, identify, and value marketable properties. A report from the Tax Assessor's Office (February, 1996) lists 1,207 non-taxable parcels of property in the County, excluding most churches. Significant numbers of parcels are listed under Orange County (71), under the North Carolina Department of Transportation (152), and under the Orange Water and Sewer Authority (142). To enhance the County tax base the Committee recommends that such property be reviewed annually. For example, a sample of the Seven Mile Creek area reflected four County owned parcels of about 150 acres total that are estimated to have-a current market value as high as almost $500,000. The Committee is aware that considerations such as perkability, building restrictions, and access affect market value. Farm-use and Forestry-use programs can affect yields for tax values. However, any parcel that currently is not on the tax rolls, which is not of use to governmental agencies, and which can be converted to usable, taxable property should be effected as soon as possible. Recommendation 11: Consider the impact on the tax base when creating greenways, open spaces, and easements. Non-mandated parcels and outdated planned uses for parcels should lead to the return of these lands to the tax rolls as soon as possible. Questions such as "How much property that OWASA holds is mandated?" and, "How many DOT parcels represent old project plans that are no longer feasible or necessary?" should be answered. Recommendation 12: Revisit the issue of non-taxable University of North Carolina properties. The Committee is aware that the County has taken this cause to the State Supreme Court, losing its case. And, the NC Legislature has made all UNC properties tax-exempt, eliminating a distinction between educational and non-educational uses. Thus, the block which UNC owns on the south side of East Franklin Street that includes the old Varleys Store and the Carolina 9 12' Coffee Shop, brings no property tax revenue to the Town or the County. The Old Hill Estate on Raleigh Road of 19 acres, recently donated for use as the Chancellor's residence, has been removed from the tax roles. At an estimated tax value of $2,157,827 and a current tax rate of .9475 per $100 of assessed valuation, that computes to $20,445 in annual lost property tax. The Committee recommends: a) The County Commissioners make every effort to negotiate equitable compensation from UNC for loss of tax revenues on University properties not used for educational purposes. One half of Emergency Medical Services calls in a year serve the University community. Donation of professional services and assistance with County automation, are examples of negotiated compensation. b) Orange County, in conjunction with other jurisdictions in the State that have significant UNC property holdings, should seek to have the State Legislature and officials of the University System find an equitable solution to its loss of property tax revenues because of unjust exemptions granted to the University. Recommendation 13: Take steps as a County to control building costs of public structures in Orange County. The efforts of the School Construction Standards Group are a positive step for establishing guidelines that may help to control school construction costs. The subcommittee adds the following recommendations in an effort to control building costs of public structures in Orange County: a) Funding levels should be comparable for similar facilities in our Metropolitan Statistical Area (MSA). Elementary schools built in our MSA average $15-20 less per square foot in cost than the McDougle Elementary School (based on figures supplied by the North Carolina Department of Public Instruction on projects bid between 1/95 and 11/95). b) That the Commissioners fund new school construction at the Basic or State recommended level. That school districts desiring level I,II,III buildings pay for the additional levels from their own Capital Improvements Plan budgets. A basic elementary school for 600 students has 81,463 square foot. A level III elementary school has 99,225 square foot. (School Facility Draft Report ). Using a budget planning figure of$90 per square foot from the report, a level III elementary school would cost an additional $1,598,580. c) That park and recreation areas be combined with school sites to maximize facility usage and to reduce costs of building and maintaining separate recreational areas. d) That cost of consultants and engineers be controlled by considering hiring a County employee to manage these functions. This position might be shared with surrounding counties to reduce expense and maximize work load. Or, a contract with a large architectural firm with sub-specialties be enacted to manage a large block of building projects with the idea that economies of scale can reduce the engineering and consulting fees. 10 13 Follow Up To Recommendations The Innovation and Efficiency Committee members wish to express their appreciation to the Board of Commissioners for the opportunity to be involved in and advise on ways to enhance innovation and efficiency in Orange County. We have all invested hard work in the innovation and efficiency process and are pleased to have identified these recommendation to offer the Board. We look forward to hearing the Board's feedback on our recommendations. Beyond this, we hope it will be possible to move forward with the recommendations and that we will have an opportunity to reconvene in six to eight months to assess progress and offer any guidance for continued success. 11 Appendix. List of Innovation and Efficiency Committee Members Appointed by the Orange County Board of Commissioners Ted Abernathy Lindsay Efland Gwen Price Alan Belch Jim Goldstein Janet Sparks Dan Brummitt Norman Gustaveson Norman Umstead David Cannell Joel Harper Stuart Wallace Bonnie Davis John Horner Mary Willis Frances Douglass Tina Hudson 12