Board OKs Nearly $2 Million More in Funding for Firm to Implement Changes

RIVERSIDE COUNTY, CA - Despite concerns about when there might be a return on investment, the Board of Supervisors Tuesday approved spending an additional $1.99 million for a professional services firm that's under contract to find ways of improving the way agencies do business while lowering costs throughout Riverside County government.

"I was under the impression we had booked savings in the current fiscal year, but it doesn't appear there'll be a single dollar in savings this year," Supervisor Kevin Jeffries said before joining the 4-0 vote in favor of the appropriation to Netherlands-based KPMG. "If we haven't begun to implement true savings with the deficits we have, the cuts taken this year are going to be more dramatic next year."

KPMG sought the additional money, most of which will be drawn from the county general fund, to inaugurate the "transformation phase" of its proposed efficiency and streamlining upgrades in three departments -- human resources, information technology and transportation and land management.

KPMG manager Ian McPherson told the board that analysts were prepared to implement pilot projects to "test out" the company's research on cost- saving and efficiency measures. The rollout is slated for the first half of 2017, but McPherson did not promise that the county would net near-term budgetary relief.

"It's important to get things right, spend time on design and do the research to get data that you can rely on in decision-making," McPherson told the board. "It would be easy for us to cut and paste and say, `OK, here's the answer.' It's our duty to drill into the details so that we have data coming in. We've had to build data sets because there were no data available from some agencies. We want to bring you surety in your decisions."

"We're creating joint performance indicators," he said. "We want to eliminate surprises. You're naturally impatient for results. But we want to make sure we can deliver what you want in a way that provides certainty and sustainability."

Jeffries expressed reservations about ongoing appropriations when the county had already approved $19.1 million in the contract sealed with KPMG in March.

"There's still nothing on the books, and we're halfway into the budget year," the supervisor said. "None of what you've said tells us when savings will begin. My world up here is, we have to have something to show for the money we've invested."

McPherson suggested that Jeffries was under the impression that KPMG would deliver the same turnaround plan that Chicago-based Huron Consulting Inc. did for the county hospital, which crawled out of a deep budgetary hole in less than two years after Huron identified and helped implement a variety of reforms, beginning in 2014.

"Huron was dealing with one organization. Our undertaking is exponentially more complex," McPherson said.

Along with nine general government agencies, KPMG is under contract to "right-size" the four public safety departments -- sheriff's office, district attorney's office, public defender's office and probation. Only the latter is operating in the black.

Public safety agencies consume more than two-thirds of county discretionary revenue.

"We need to be more efficient and effective in the delivery of public safety services," county Chief Executive Officer Jay Orr told the board. "It's important to note that savings will come about as people take the `change medicine.' We all need to change so we can take the challenges of the future. This is no different than overhauling a submarine. The overhaul needs to be done on schedule, and it needs to be comprehensive. That's where we're headed."

Board Chairman John Tavaglione said he believed KPMG was "making great progress" and shouldn't be expected to produce results "overnight." Supervisor Marion Ashley's thoughts were in accord, and he added that real savings might not be possible without the cooperation of collective bargaining units, whose new contracts are under negotiation.

"We're sort of at the mercy of the (memorandum of understanding) process," he said.

Jeffries asked McPherson whether Tuesday's nearly $2 million allocation will be the final amount needed by KPMG.

"I can't say," McPherson replied.

– By City News Service / Patch file photo by Renee Schiavone