by Karen Brune Mathis
Managing Editor
Mayor Alvin Brown’s operations and infrastructure transition committee recommends a “full, unbiased study” of how costs are managed.
The committee was charged with identifying opportunities to improve the efficiency of municipal service delivery.
It said that it was charged specifically with examining which City departments are doing a good job and which could be improved; identifying functions that could be outsourced or consolidated; and determining metrics to evaluate progress and improvement.
“Emerging from the many discussions had on this topic and spanning several departments was a sense of frustration and a lack of transparency, either real or perceived, throughout the departmental budget process,” said the committee report.
It found that the budget process created “little clarity regarding internal service charges.”
“This is engendering a level of hostility to the City service provider and a lack of understanding of the budget process,” it said.
The recommended long-term study also would examine further consolidating services under the administrative services division, streamlining the information technology department and instituting a comprehensive “Lean” strategy.
A “Lean” strategy is an approach to identify and correct organizational inefficiency, such as downtime, defects, unneeded steps, excess inventory, overproduction, underused employees and other costly activities.
The committee narrowed its remaining recommendations to construction contract administration; the Jacksonville Small and Emerging Business program; fleet management; recycling revenues; and an operations internship program.
Among the recommendations:
Strategic cost management study.
According to the committee, the lack of visibility and understanding of how shared services are charged back contributes to the perception that few costs are controllable. It suggests:
• Providing budget transparency.
• Consolidating City services. Review and study the cost savings and efficiencies of moving administrative functions from the Jacksonville Sheriff’s Office and the Jacksonville Fire and Rescue Department to the administrative services division.
• Outsourcing and consolidating information technology.
• Implementing Lean strategies.
Construction contract administration.
The committee recommends that any employee serving as a contract administrator should be professionally trained; that the City explore centralizing contract administration functions into one department; and that construction contract change orders be limited to 5 percent, which is more in line with industry standards.
The committee said that the current average amount of change orders on City construction contracts is 16 percent and that by limiting that to 5 percent, “the City could see a savings of more than $15 million over a three-year period,” assuming the same level of contracts as the past three years.
Jacksonville Small and Emerging Business.
According to the committee, the Jacksonville Small and Emerging Business program should be continued and enhanced to create more jobs.
Fleet management.
According to the committee, there is a strong need for a central services function for fleet management. “Fleet management is a large legacy service function that has significant internal challenges with respect to user-accountability and cost/budget transparency,” it said.
It called for more internal efficiency, accountability to internal customers, strategic management and transparency in costs and budgets.
“It is clear that — at minimum — there is a dire lack of budgetary accountability,” it said, calling it the “accounting” problem.
“The committee heard of examples of potential overcharging, lack of user-approvals for cost overruns, charging for warranty repairs, difficulty in following work charges through the two legacy financial systems FAMIS and Maximo and a general ‘it’s going to be charged to you anyway’ approach taken by the system,” said the report.
It also said that the “accounting” problem “results in no competent assurance that fleet management — and other portions of central services — are not being run to subsidize other operations either within central services or elsewhere within the government.”
The committee further said there was a larger “systemic” problem in that central services in general “seems to operate without budgetary reference to the users.”
According to the report, users told of cases in which their usage had dropped while charges from central services had increased.
“During the brief period of review, it was not possible to engage competently the larger question of whether the fleet management function should not be completely outsourced,” it said, adding “there is some logic to this position.”
“In a city of 530 licensed gas stations there may be debate as to whether the City of Jacksonville should be in the internal gas station business, or whether substantial savings might not be made by outsourcing tire supplies, tuneups, repairs and the like to the broadly available commercial work force.”
However, the report said the findings should not suggest managers and supervisors in central services are not doing their jobs “diligently, honestly and with care.”
Instead, it said the questions should be whether the City should be in that business or could the functions be done better by the private sector at market cost and also whether internal process changes could provide sufficient improvements in services and costs.
The committee called for a forensic audit of the cost-accounting history of central services functions to ensure that the functions are not being used to subsidize other operations.
Recycling.
The mayor’s administration should motivate citizens to recycle and also should study how to reduce collection costs or privatize all solid waste programs.
Operations internship program.
According to the committee, there is only a summer paid-job program for fleet management. There is need in other operations as well, it said.
356-2466