Approaches to Balancing the Budget
Administration is striving to make the budget process as clear and simple as possible for the organization. One attempt to achieve this is through the publication of clear budget reduction targets. Administrator Verna McDaniel has declared four target areas in the Preliminary Financial State of the County:
A multi-faceted approach will be used to identify budget solutions, first and foremost, with a review of revenue opportunities. Counties in the State of Michigan do not have the authority to implement sales or incomes taxes, and property tax revenues are governed by statute set to limit growth. New property taxes can be generated by citizen vote, but in a time of economic stress a millage campaign may be difficult. The Board of Commissioners will explore the feasibility of a Human Services Millage within the next few months. Revenue increases would therefore have to come from maximizing federal or state funds, or through fee increases. Every county Department Head and Elected Official will be asked to review their services for revenue generation ideas to help address the projected budget deficit of $20 million for 2012/2013. At this time, McDaniel has identified a $2 million dollar target for revenue generation.
Beginning in April of this year, each Department will engage in Base Budget Development with Administration. They will first look at efficiencies or means to reduce the cost of doing business, then evaluate serviceability levels and ultimately, although undesirable, the loss of total programs. We need to be open to change, to transform our services so that we are providing the best services, the right services, in the most cost effective manner possible. This will mean looking at root causes of problems and focusing on outcomes. This organization thrives on continuous improvement. It is through creative strategic thinking and discussions with all of our partners that this will become possible. A target of $8.5 million has been established for Department Reductions across the organization. To meet this target, the Administrator will declare budget targets for each individual department which will be based on the following factors:
- Past Reductions
- Alignment with BOC Priorities and Desired Community Impact
- Serviceability Requirements
- Collaboration Opportunities
- Potential to Eliminate Programs
McDaniel will also review funding allocations to Outside Agencies. A new integrated funding allocation process was adopted in 2009 shifting the majority of these funds to the Office of Community Development. This process provides a competitive bidding process along a set of standard community priorities. McDaniel has identified a $1 million dollar target for this area.
Finally, the budget solution will need to include modifications to Employee Compensation and Benefits. More than 80% of County employees are represented by 17 bargaining units. Most of these union contracts go through 2011, so in the next few months the County's Negotiations Team, led by Human Resources and Labor Director Diane Heidt will engage in conversations with our labor partners. The County uses an interest based bargaining approach to our labor negotiations as a means to understand and fulfill employee needs when possible. Obviously, to realize cost savings needed to balance the budget, employee compensation and benefits will need to change. However, the commitment to our employees, to their professional development, to providing them a safe and appropriate work space, to equipping them with technology that allows them to do their job efficiently and effectively must be retained. The Board of Commissioners has made a significant commitment over the past several years to maintain and grow our infrastructure, and it is that past and continued commitment that is allowing us to preserver in these times. A target of $8.5 million dollars has been identified for this area.