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Small Reductions Add Up
Posted 09-16-1996
Last month I wrote about the creation of Westmoreland County's budget and the complexities
involved with such a monumental task. I described the sources of our revenue and how much
we generate through our county real estate tax. As I explained, it is extremely difficult
developing a budget when we only generate 26% of the revenue from our own sources.
This month I would like to detail where the
money goes and some of the initial ideas we received from the various departments who
responded to the commissioners' memo asking for budget reduction suggestions. $84.5
million (49.6%) of our county budget is spent on human services. Those services include
the Children's Bureau, Mental Health/Mental Retardation, Area Agency on Aging, and our
county nursing home. $23.6 million (13.9%) goes toward Public Safety including our prison,
adult and juvenile probation, security, and emergency management system. $16.2 million
(9.5%) is spent on the administration of our court system and court-related offices. That
amount does not include the salaries of our ten judges or our twenty district justices.
$9.2 million (5.4%) is spent on debt service and $7.8 million (4.6%)on our Capital budget.
Public Works costs us $3.7 million and Recreation, meaning our park system, costs $2.2
million to operate. Finally, Conservation and Development costs $2.0 million and all other
areas cost $4.9 million.
As you can see, there are broad, diverse
areas where we will spend $170 million this year. With general inflation of salaries and
other costs, we are facing a shortfall of nearly $5 million for our 1997 budget. My
objective is to take a very hard look at our expenses because I am confident we can
realize savings if we have the discipline to make tough decisions. Also, we must be
creative in finding ways to increase revenues without raising taxes. One example of such
creativity that we are examining is simply advancing the billing of county taxes from
April to March. That action could possibly increase county revenues $500,000 the first
year and $250,000 each year after, simply from earning interest on the money.
An area where we particularly need
discipline is the creation of new jobs. From June 1992 through June 1996 the number of
county employees has increased by 62 people each year. (1563 full-time employees in '92
and 1812 this June). If we stop that trend we may realize as much as $1.6 million in wages
and benefits. As a large purchaser of human services ($39.75 million) from
sub-contractors, we must examine the idea of negotiating a preferential rate from the
service providers. If we propose only a one percent increase for 1997 rather than 3.5% we
can save approximately $100,000.
Westmoreland County has made a switch to
Select Blue as our form of health benefits for employees. Though we are self-insured Blue
Cross administers the program for us. The initial proposal was for us to realize a 19%
saving in benefit costs. However, prior to my election, an insurance broker was brought in
to broker the deal. The proposed savings was therefore reduced to 16%. Even at that level
with roughly $5 million in benefit costs, a 16% saving should allow us to realize a
savings of $800,000 if Select Blue works as it is proposed. The use of a broker is
currently costing about $150,000 per year.
We also spend roughly $450,000 per year on
inmate health care at our prison. Some initial projections by the Warden show that if we
hire a firm that specializes in health care at prisons, we may save several hundred
thousand dollars each year. There are ways to save money just through modifying the daily
food menu served to inmates such as reducing the serving of milk from three times per day
to two (approximate savings $10,000 to $15,000).
It is apparent that the savings are not
going to come in one large chunk of our budget. It will come through a systematic
evaluation of our operations. However, by adding a large number of small savings together
we can begin to operate more efficiently, reduce our expenses, and better prepare county
government for the future without balancing the budget on the backs of the taxpayers. |
