Jul 29, 2014
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Consolidation Needs Trust Between Elected Officials

Key area for increasing efficiency and eliminating duplicative services between city departments is in human resources says consultant.

Consolidation Needs Trust Between Elected Officials

It’s simply about trust – elected city boards trusting one another in order to work together to maximize efficiency and cost savings for the city.

That’s what Michael Daley of Financial Advisory Associates told city councilors last week, briefing a special council subcommittee on the study his firm conducted to look at .

“It makes it hard to create a long-term [change] if you don’t trust each other,” Daley said.

He added that simply merging departments, which often happens in the private sector, and wresting control away from one group does not help the situation. Instead, he advocates for collaboration on similar functions wherever possible; in some cases, however, consolidation makes more sense.

“Whoever has the juice, get those people together and talk about it,” he said. In this scenario, the person with the most “juice” would be the mayor and the discussions would invariably seek to reign in some of the spending by the city’s light plant.

Light plant biggest area for savings

The features prominently in the report as an area for savings. The study found PMLP spending three times as much on fewer employees than either the schools or the city on certain administrative tasks, such as human resources, accounts-payable and budget reporting.

“It’s really a smaller organization trying to be a bigger organization and it’s not working in some areas,” said Daley.

PMLP General Manager William Waters has , saying he and his staff were not consulted at any length by the firm during the study. Councilors brought up that point last week and Daley noted his team and city finance officials sat with administrators from all city departments, including PMLP.

Daley, who previously worked in municipal finance, said his advice to the city is to collaborate with the and light plant in these areas and work toward centralizing human resources, for one. One benefit could be reducing overhead costs at the plant and then either reducing rates for customers directly or offsetting other initiatives, such as a program for municipal or commercial customers to upgrade equipment, Daley said.

Another suggestion in regards to technology, is simply upgrading existing software to a newer, robust system, which is costlier but provides more useful internal information.

Council President Anne Manning-Martin applauded Daley’s firm for the work, hoping it could be used to better control spending. On the other side, however, at least two of her colleagues are wary of trying to exert any influence on PMLP or its elected board of commissioners.

The light plant is operated largely independently from the rest of the city, under state law on municipal utilities, and neither the mayor nor City Council controls spending at PMLP or signs off on utility rates. The plant also contributes payment in lieu of taxes on its property in the city.

“I have a hard time trying to say anything about the [light plant],” said Ward 2 Councilor Arthur Athas, pointing out its relative autonomy in the city.

Athas said he doesn’t see the mayor or the council as being in a position to force PMLP to do anything. Ward 6 Councilor Barry Sinewitz agreed.

“I’m not going to step in and tell the [light plant] what to do; we have no say over that plant,” Sinewitz argued, saying to do so would only be overstepping on the light commission’s jurisdiction.

Daley disagreed. “Elected officials can converse with each other,” he said.

“When push comes to shove, they’re nothing more than a subset of the municipality,” he said, adding that yes, City Hall or the council can’t order PMLP to do anything, but they can certainly suggest action in some areas.

He also noted that the city auditor and other officials do ultimately have to approve certain financial documents and procedures for departments outside .

“You are not putting the head of the light plant in a very good light,” Sinewitz said.

Develop a capital plan for all city buildings

In addition to consolidating human resources efforts, which Daley said could lead to additional savings as duplicated services and inefficiencies may be further brought to light, another key recommendation from the study is to figure out the condition of all city-owned buildings and develop a capital plan.

Daley said the city should first commission a thorough evaluation by field experts on the conditions and needs of each building and then consider hiring a facilities manager.

“[Instead of] letting your buildings turn into rubble, you could spend a little now to avoid paying a lot later,” he said. “Not dealing with your capital needs is highly capital intensive.”

At-Large Councilor and mayoral candidate Ted Bettencourt said the city has to be careful about adding any new jobs in the economic climate. He wondered whether existing staff couldn’t just do the work: either custodians or building inspectors.

“The city doesn’t have a single craftsperson on its payroll,” Daley noted, adding that custodians probably do perform de-facto maintenance work, but that’s not the job they were hired for, or are necessarily skilled at. As for inspectors, their job is to inspect new construction and respond to calls and complaints.

Daley said the School Department, however, does employ both maintenance staff and custodians while effectively monitoring the status of school buildings for capital needs.

Councilors did not take any action on the report and Daley will likely appear again before the subcommittee. Panel chairman Dave Gravel has said he would like to work on recommendations over the fall and then forward those on to the city’s new mayor early next year.

Gravel noted there were no specific projections on how much the city might save in any of the recommendations, calling it akin to “a story that has no ending.”

Gravel said actual savings need to be discussed in order to move forward and make any decisions on where to invest.

He recalled when he was on the School Committee about 15 years ago, a study of school buildings was similarly conducted, but all it yielded was the knowledge the district had about $100 million in improvements to make, but no plan to go with it at the time.

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