Bob's Update on Creative Budget Solutions - August 12, 2008
We still have to
find more permanent answers to budget shortfalls that appear to be with us
for the next few years. Yes, we’ve made changes that helped this year
– many of them one-time only, or an aggregate of smaller structural
changes – including a hiring freeze that is now in its eighth month.
And we're nearly done with the cuts we must make for '09 - but it does not
end there.
Far from any ‘down time’ of monthly Board meetings and planned vacations, the summer has accelerated our search for changes to the way we do business to help bring down costs while allowing for continued excellent public service. I thought it would be good today to remind you of some of our recent major undertakings that attempt to do just that. Last week’s Board of Commissioners’ meetings created two important steps forward. Both are "new ways to do business," both will strengthen our financial and physical infrastructure and both will save us money.
The Board passed a resolution authorizing me to consolidate our data center with the City of Ann Arbor’s data center, presently located at Ann Arbor City Hall. I don’t know if you’re aware of the present location of the County’s “computer room” that houses all of the equipment that powers our email, our financial systems, electronic storage and internet activity. It’s in the basement of this building – Administration. Beyond three separate flooding incidents down there in recent years, courting catastrophe each time, the space was never intended to house our 90 servers and other telephone and network equipment.
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Bob's Update" is a weekly message to Washtenaw County employees from County Administrator Bob Guenzel. eWashtenaw publishes these columns when they are deemed timely and useful to the wider community. Please contact Administrator Guenzel with your comments. |
We researched changing the location to the Western Service Center on Zeeb Road, or the Service Center on Hogback. Two years ago, costs for that relocation were estimated at between $1.6 million to an existing facility or $3 million for a new facility constructed on County land.
The total cost of this collaboration with the City of Ann Arbor will be $397,000, which the Board approved last Wednesday night. This is just the first step in a process of collaboration with the City. Together, we’ve discussed more than 70 different initiatives among several different departments and the Data Center is one of the first to get under way.
The other step forward was the Board’s passage of the resolution that will fully pre-fund our obligation to retired employee health care (VEBA), by creating Certificates of Participation. Because we will borrow the remaining approximate $157 million to fully fund the Washtenaw County Retirees Health Care Trust, we will know, every year for the next twenty years exactly how much is owed. It’s not unlike a mortgage at a great interest rate.
The way it has played out in the past, we could not know, from one year to the next how much of our budget would be spent on the VEBA. Each year we had to rely on our invested Trust to get us through the changing needs of the unpredictable actuarial tables. With these Certificates, according to our financial advisors, especially with the current low interest rates, even a small gain in the market could save us millions of dollars over time.
These are times that call for creativity, and I want to thank all of our staff for facing challenges creatively. And I want to thank our Board for their leadership in comprehending the need for change and for being accountable.
Have a great week,
