goals 2000 report

7/28/2019 Goals 2000 Report

1/76

\\\ \

COUNTY; oj O SWEGO . GOALS 2000+ TASK FORCE

APlan. : . .:: .:,,: :> > > > fi" ' , : ..1816 ... .. orContinuousprovementSubmitted to the

Oswego County Legislature> March 14, 1996


2/76

COUNTY of OSWEGOGOALS 2000+ TASK FORCE MEMBERS

Rockne Burns, ChairmanBrian CaswellRoger EhrlerMark Gibbs

Bernie HendersonJack MorrisonCurt NorpeU

Stephen ParkerMichael PollockConnie SmithPaul Snyder

Millard SullivanJoanne Swenton

Gary TothJoseph Wiedenbeck


3/76

COUNTY ofOSWEGO GOALS 2000+ TASK FORCE

A Plan for Continuous ImprovementTable of Contents

fauI. Acknowledgments ................................................: ............... ....1II. Introduction ............................ ................. .... ........ .......... ............ 3

III. Executive Summary .................................................................. 5

IV. Summary of Recommendations .. .............................................. 9V. Other Issues of Public Interest. ... .......................... .. ......... ... .... 55

VI. Appendices ...... ....... .... ...................................... ..... .. ........ ....... 57

Printed on Recycled Paper


4/76


5/76

SECTION I.ACKNOWLEDGMENTS

The Oswego County Goals 2000+ Task Force commends former Legislature ChairmanFrank R. Church for having the courage and foresight to step forward to requestassistance from the business community and seek a vision for Oswego Countygovernment.We extend our appreciation to the Oswego County Legislature for their valuable inputand ongoing support of our efforts. Oswego County department heads and employeesalso provided a great deal of information throughout the project; their cooperation isappreciated and is evidenced by their sincere interest to deliver quality services toCounty residents.To the many County residents who shared their thoughts, concerns and valuable ideasregarding the role of County government, thank you for your willingness to contribute tothis project. Community support from the County's Chambers of Commerce and laborunions also enhanced our efforts, for which we are grateful. .The Task Force applauds the efforts of Task Force Coordinator, Pamela Caraccioli,who enabled us to realize our collective potential. Additional techniCClI and researchassistance was provided by Kerry Dorsey, Executive Assistant to the CountyAdministrator.Through our association with the Private Industry Council, we set out to explore apartnership between the County's private sector and local government. It has been anhonor and a privilege to provide this unique, voluntary assistance in an effort to improveour community and enhance Oswego County government.

- The Oswego County Goals 2000+ Task Force

Acknowledgments 1


6/76

2 Acknowledgments


7/76

SECTION II.INTRODUCTION

Historical PerspectiveOswego County was established in 1816 and governed by a Board of Supervisors. In1972, the Board of Supervisors was replaced by a County Legislature comprised of oneelected legislator from each of the 22 towns, in addition to one elected legislator fromeach of the 14 wards in the cities of Fulton and Oswego. This Legislature annuallyelected a Chairperson to oversee and coordinate Oswego County operations.In 1979, a local law providing for the establishment of the position of CountyAdministrator was enacted. The local law stated that the County Administrator isresponsible to the County Legislature, serves as Chief Administrative Officer to promotethe County's development and effectiveness, and is responsible for the overallcoordination of the various agencies of county government and the unifiedmanagement of county affairs.In November of 1993, as a result of legal challenge to the County Legislature'sweighted vote system, the legislative districts were reapportioned. The reapportionmentresulted in a decrease in the number of elected County Legislators from 36 to 25,effective January 1, 1996.

Current RealityThe County of Oswego is comprised of 22 towns, 10 villages and 2 cities, with apopulation of approximately 121,000 (1990 U.S. Census). The County budget for 1995was $143 million, of which 43% or $62 million was paid through real property taxrevenue. Of all the real property tax revenue the County received in 1995, onetaxpayer, Niagara Mohawk Power Corporation, paid 62% ($38 million). NiagaraMohawk Power Corporation has asked the County for a 50% reduction of its propertytaxes over the next five years.Over the last five years, Oswego County's unemployment rate of 7-10% has beenranked as one of the highest in New York State. Within the last three years, the Countyhas lost two major industries, Miller Brewing Company and Reynolds Metals Company,and has experienced several other major downsizing efforts. This has resulted in thedislocation of over 2,250 private sector workers and a total estimated impact on 6,300jobs in Central New York, according to the Oswego County Department of Employmentand Training and Operation Oswego County, Inc.

Introduction 3


8/76

VisionIn the Fall of 1994, Oswego County Legislature Chairman Frank R. Church began aproject which focused on long range planning of fiscal resources in Oswego County.The project became known as Oswego County Goals 2000+.In April of 1995, Chairman Church appointed a 15 member, volunteer group of largeand small business representatives from various sectors of the County, includingbanking, construction, education, health, manufacturing, utilities and organized labor, toconduct a study of county govemment operations. This volunteer group became knownas the Oswego County Goals 2000+ Task Force. Chairman Church sought to "createa climate of partnership with its citizens and businesses to review fiscal issuesand develop a sound, progressive and comprehensive model, without seriouslydiminishing important services".

Charge to the Task ForceThe charge to the Task Force was to "conduct a review of.the County's revenuesand expenditures, programs and services, as well as the methods and levels inwhich they are provided, in order to develop a model for implementation".Specifically, Chairman Church requested the Task Force to act , n an advisory capacityby: shaping a vision for Oswego County that is inclusive of all of the citizenry reviewing successful practices of other municipalities reviewing Oswego County's budget and financial reporting practices identifying the County's current reality helping to identify and match taxes and fees with the cost of services strategizing and developing recommendations to the 1996 Legislature

Mission of the Task ForceAt the first organizational meeting of the Task Force in April, 1995, its membersdeveloped a mission which established the scope of their work plan. Their mission wasto "review revenues, expenditures, management and budget systems, and makerecommendations to the Legislature regarding ways to provide quality servicesand opportunities for our community, now and in the future, in an efficient andcost-effective manner. "To accomplish this mission, three subcommittees were formed from the 15 memberTask Force: Structure and Management, Programs and Services, and FinancialSystems. (Additional subcommittee information can be found in the Methodologiessection of the Appendix, beginning on page 66.)4 Introduction


9/76

SECTION III.EXECUTIVE SUMMARY

In April, 1995, the Oswego County Goals 2000+ Task Force began to assess therevenues, expenditures, programs and services provided by Oswego County todevelop a model for implementation.For a period of ten months, the Task Force conducted a series of interviews withpersonnel from county government operations, Legislators, unions representingcounty employees, Chambers of Commerce and Oswego County residents.Findings from the interview process were evaluated in context of infonnationfrom other counties throughout the United States and the collective privatesector experiences of the 15 Task Force members. From this process, the TaskForce developed A Plan for Continuous Improvement ("Plan'1 which has thepotential to lead Oswego County government through the challenges confrontingit in both social and economic environments.The assessment process consisted of a "macro" approach by focusing onorganization's structure and systems, rather than a typical "micro" approachwhich focuses on specific services, programs and activities. The fonner providesthe foundation necessary for long tenn improvement; the latter tends to createshort tenn "fixes" which are often less than effective for long range,organizational planning.The "Plan" consists of fourteen recommendations which collectively will improvethe efficiency of Oswego County government through a series of organizationalchanges, implementation of various management processes, andimplementation of information and financial systems. Over a five year horizon,the recommendations will enable the County to operate with approximately 800to 900 employees. This streamlining effort from approximately 1,174 employeescan be accomplished through the County's natural attrition rate, without thethreat of layoffs. Such changes will result in an annual reduction of $12-15million in labor costs, and $3-5 million in related expenses. (This is a 20-30%decrease in needed tax revenues, based on 1 9 ~ 6 budget figures.) Thesechanges will substantially improve the County's ability to meet anticipateddecreases in property tax revenues, while at the same time improve the qualityof essential services provided to county residents.

Executive Summary 5


10/76

There are a series of major themes upon which the recommendations are based.The recommendations need to be addressed collectively to ensure the successnecessary to move the County into the 21st century. They include the need forcounty government to: Clearly identify its Mission; it should strive to ensure that all of the programsand services provided are consistent with the County's Mission; provideessential services which do not compete with the private sector; take a leadrole in the County's economic development efforts; Separate the Legislative role from the Executive role in governmentoperations by centralizing leadership ultimately under an elected CountyExecutive. This position should "champion" the change processrecommended in this report by managing government operations consistentwith the poliCies and strategies set forth by the Legislature. Centralizingleadership of government operations is viewed as the key prerequisite tosuccessfully accomplish government efficiency and effectiveness; Make structural changes to the organization, by consolidating LegislativeCommittees and departments, and reducing levels of the organizationbetween the department heads and the ''front line" o r k e ~ ; Implement various management techniques to involve all employees in a"continuous improvemenf' process, and to develop higher levels ofaccountability of its managers for supporting the stated county mission; Implement updated information systems to better measure its operational andfinancial performance, improve its control of cash flow and fixed assetmanagement; Implement county-wide cost accounting and cost allocation systems toensure that all of the costs associated with county government are properlyclassified, fully allocated to the programs and services provided, and reflectedin all analyses; Assume the lead role in areas of major interest to county residents, includingeconomic development leading to greater employment opportunities, andintermunicipal cooperation to improve the efficiency of various infrastructuresupport and public safety services; Develop a stronger revenue base by ensuring maximum reimbursement fromState and Federal governments through improved tracking systems, andanalysis of the County's revenue streams to lessen dependence on realproperty taxes.6 Executive Summary


11/76

The recommendations, when fully implemented, will create continuousimprovement in Oswego County government. There are numerous examples ofother public organizations which have implemented changes of this nature andachieved improvements in excess of those projected in this report.The Goals 2000+ Task Force believes that with the implementation of theserecommendations, the County will be able to significantly streamline itsoperations, reduce costs and tax burdens, while at the same time improve thequality of services, and ultimately the quality of life, for residents of OswegoCounty.

Executive Summary 7


12/76

8 Executive Summary


13/76

SECTION IV.SUMMARY OF RECOMMENDATIONS

The Goals 2000+ Task Force recommends that the Oswego CountyLegislature:page

1. Identi fy and continuously support a stated mission ....................................... 102. Continue consolidation of the Legislative Committee structure ....................... 123. Transition leadership of County operations to an elected County Executive ..164. Consolidate and s t r ~ a m l i n e the departmental structure ............. 205. Involve all employees in the change process and formally adopt principles ofcontinuous improvement ...................................... 296. Implement a consistent individual performance measurement process ....... 327. Create an ongoing compensation and benefit strategy recognizing unionleadership and involvement .........................................378. Review services on an ongoing basis to ensure consistency with the stated

mission ................................................... 409. Improve and standardize budgeting and benchmarking practices ..............43

10. Develop and implement management information systems comprised of costaccounting and modeling methodologies to determine service efficiency .....4611. Improve internal controls over purchasing, cash receipts and fixed assets .......4812. Lead and coordinate intermunicipal cooperation within Oswego County .....5013. Strengthen tracking of claims for Federal and State reimbursements ...............5214. Develop a revenue strategy to control risk to County taxpayers .............53

SummaryofRecommendations 9


14/76

1. Ident ify and continuously support a stated mission.FindingsDuring interview sessions with the County Legislature, employees and residents,differing viewpoints were found as to which services county government operationsshould be providing or be engaged. These viewpoints ranged from a fairly narrowscope (provide only essential services), to a much broader scope (provide any servicewhich can be cost justified). Although many departments have adopted missionstatements specific to their function, there is no single, formally defined and clearlyarticulated mission statement for the County.Those departments which have adopted a specific, stated mission appear to have alsoa varied focus with respect to recognition of who the customers are and which servicesshould be provided. As a result, activities across the organization have grown toinclude services which may not be essential to the mission of county government orcontribute to the quality of life for county residents in general.

AssessmentA formally identified mission statement, or a statement of _purpose for being" isessential to ensure that all of the resources of the organization are focused onaccomplishing only those activities which directly support this mission or purpose. Inthe absence of a clear mission statement, the activities of an organization tend to growbeyond what is appropriate for the organization causing "scope-creep." When thisoccurs, resources are utilized to support non-essential activities. Unless there is anunlimited supply of resources, scope-creep reduces the resources available to supportthe activities essential to the organization, creating a reduction in the quality andeffiCiency of delivery of essential services.Scope-creep has occurred in Oswego County. The County enjoys an abundantrevenue stream, which has contributed to a steady growth of services over the past twodecades. Given the current fiscal reality, the County of Oswego should strategize itsrole through those services regarded as essential. (See Recommendation 8 for furtherresearch on services.)

RecommendationThe County must identify, adopt and clearly communicate a mission statement forpurposes of narrowing the scope of county government. The County should focus itsresources in those areas which will directly contribute to the well being and quality of lifefor county residents.

10 Summary ofRecommendations


15/76

A team consisting of representatives from the various stakeholder gro_l..Ips from withinthe County should be formed to identify the mission of Oswego County. (Stakeholdersare people who have a vested interest in the County, i.e. taxpayers, residents,businesses, legislators, county employees, etc.)Ideally, the mission should answer these questions: What is the "purpose" of Oswego County government? Who are the customers of the services provided by the County? What are the unique strengths of county government operations and how can thosestrengths be maximized, while minimizing costs to residents?Based upon collective input from residents, Legislators, department heads and unions,the County should focus on the following through its mission: providing essential services in infrastructure, health and welfare, and areas thatcontribute to residents' quality of life not providing services which compete with the private sector taking the lead in the economic development process, and measure its success bythe creation of employment opportunities for Oswego County residentsOnce the mission has been identified, the mission should be fully communicated to allcounty employees and be made available to the public. In order that the mission be aneffective statement, all employees must be able to utilize the mission in the context oftheir specific job activities. The mission should also serve as a tool to challenge allactivities which do not clearly support the mission.To ensure individual accountability to the mission and continuously measure theCounty's collective performance in accomplishing the mission, county leaders shoulduse benchmarks to measure each activity against mission standards.Finally, the mission should be viewed as a dynamic statement which needs periodicreview as the needs of county residents change, and as State, Federal and societalissues change. This is accomplished by developing a simple, clearly written missionstatement which can be used by every member of the organization and all taxpayers inthe County.

Summary ofRecommendations 11


16/76

2. Continue consolidation of the Legislative Committee structure.

FindingsResponsibility for government in Oswego County is vested in the authority of theLegislature. This deliberative body is comprised of 25 legislators each representingapproximately 4,900 constituents in 25 districts. Legislators manage the affairs of theCounty organizationally, through a system of standing legislative committees. InJanuary 1996, the Legislature reduced the number of committees from 19 to 12. These12 standing committees are responsible for directing the operations of 26 countydepartments.Two positions of leadership created by and responsible to the Legislature are theChairperson and Vice Chairperson. The Chairperson of the Legislature is a member ofthe Legislature and is elected annually by the Legislature. His/Her duties are primarilyto preside over meetings, appoint special committees, and execute documents andcontracts. The Legislative Chairperson is also responsible for appointing onecommittee Chairperson to each of the 12 Legislative Committees. The ViceChairperson of the Legislature exercises all the powers and duties of the Chairperson inhis/her absence.

Assessment

The Goals 2000+ Task Force analyzed the role and structure of. the legislativecommittees first by interviewing legislators and department heads, and by solicitingpublic input. We asked questions related to communication between departments andcommittees and the respective roles of each relative to budgeting, spending, personnel,performance, etc. Although specific responses are varied, some common themes haddeveloped.Each of the 26 county departments are responsible to one of the 12 standing legislativecommittees, with the legislative committees having direct authority over the functions ofassigned departments. This system translates into a highly fragmented "managementby committee" form of government. For instance, the role of many committeesostensibly favors a high level of involvement in the day-to-day management of theirrespective departments. Other committees allow departments more autonomy indirecting the department's operations, but consult with the department head over issuesinvolving policy, budgets and personnel. The varying levels of committee involvementin this system tends to create uncertainty in prescribed authority of the departmenthead.



17/76


18/76


19/76

Figure 2-1OSWEGO COUNTY LEGISLATIVE COMMITTEES

GeneralGovernment

[ ~ ~ M " 1

CURRENT

0:::;'':: EJealth& Planning Buildings& Grounds---Fire &EmergencyManagement

r=lr:: lr: : ll=.JL::JL::JIs::lL::J

PROPOSED

EJWaYS.Means& Budget

[demM] _ _ : _ [ == 1 = ] X l_:n_n___ [ z. ]Summary ofRecommendations 15


20/76

3. Transition leadership of County operations to an elected CountyExecutive.FindingsThe Oswego County Legislature provides a leadership role and is responsible for themanagement of all government operations. The Legislature accomplishes themanagement function by subdividing itself and its management activities intocommittees. The twenty-six department heads supervise government operations andare individually responsible and accountable to one of the committees.The managerial focus of Oswego County appears to be highly fragmented and lackingcoordination and single point accountability that organizations need to effect continuousgrowth and development. The Goals 2000+ Task Force observed: a lack of coordination among the various departments no consistency between departments on various individual performance measures,hiring of temporary and part-time workers, and labor contract administration inadequate separation of the budget development, spending and approvalprocesses little or no county-wide, intermediate and long-term planning : undeveloped cost control and cost reduction processes limited coordination of resources among various governmental entities (cities, towns,school districts, economic development initiatives, etc.) within the County uncertainty concerning ultimate accountability for decisions an absence of the separation of the Legislative role from the Executive role, creatingan environment where parochial issues may drive activities which are notnecessarily within the context of the more generally perceived mission of the County

AssessmentThe above observations were developed through the Task Force interview process andare a result of the current organization structure rather than the people filling thepositions. Given the growing social and economic complexities facing the County, theTask Force believes that the current structure of managing county operations throughLegislative committees is inadequate. A structure having a strong centralizedleadership position is better able to respond to the increasing complexities of countygovernment and address the problems identified through our analysis.



21/76

This leadership role needs to be separated from, but properly balanced with theLegislature. The position should be responsible for the ongoing management of countyoperations. It should include activities in such areas as performance assessment of thedepartment heads, developing and implementing various processes to encourage costreduction and higher value services, continual assessment of the effectiveness of theCounty organization in performing its tasks, and coordination of resources within theCounty to eliminate redundant activities and tasks. It is the position where the ''tough"decisions should be made, and for balancing the priorities of individual constituents withthose which are county-wide. It is also the position which is ultimately held accountableto the Legislature and county residents for ensuring that all long term goals and annualobjectives are satisfied, and budgetary objectives are met.

RecommendationThe County Legislature should immediately begin the process of moving towardimplementation of a County Executive form of government, by first transitioningleadership of operations to a County Director.

Interim Step: Appoint a County DirectorThe position of County Director, which requires an experienced and accomplishedleader, must be immediately appOinted by the Legislature to direct the overalloperations of the County. This is a strengthened version of the current Administratorfunction and remains appointed by the Legislature. In this case, however, the Directorwould report to the Chairperson of the Legislature, and all department heads wouldreport to the Director. A four-year appointment must be made for this p'osition to offsetthe two-year terms of Legislators.Legislative Committees should focus on oversight and policy making. They wouldserve a practical role in keeping the Legislature informed of the quality of servicesexpected and provided to the electorate. In this design, it would be expected that theDirector would be accountable for the development and submittal of an annual budgetto the Legislature.

County Legislature

Legislative Committees..

Department Heads



22/76

The strength of this design is that the output of the Director will be obvious. The goalsof the Director can be clearly identified, he/she will have control of the resourcesneeded to achieve them and the Director's success, or lack thereof, will be evident tothe Legislature as-well as the electorate. The Director will ultimately be responsible forcarrying out policies set forth by the Legislature.The downside is that the position will continue to be politically vulnerable to thelegislature, not the county-wide electorate. Absent a criteria for measurement of thisposition's performance, appointment or re-appointment is highly subjective. Further,there continues to exist inadequate checks and balances to assure that politicalinfluences do not adversely affect the way in which the budget is developed, money isspent and services rendered. Ultimately, there needs to exist a challenge to theLegislature to ensure that only essential services are provided at an affordable price.An appointed position is not motivated to produce an austerity budget upon whichhis/her performance can be measured or to assume risk by taking a position onsensitive topics. An appointed position does not minimize the influence of politics onthe civic responsibilities of government.

Final Step: Elected County ExecutiveAn elected County Executive is the only alternative which will strengthen both theCounty Legislature and management of county government operations, as well asprovide checks and balances to assure that only needed services are provided and at alevel that taxpayers can afford. This alternative will lay the foundation for developinglong range plans, and help the County meet its increasingly complex challenges.A County Charter should be adopted by the Legislature, which will specifically outlinethe duties and responsibilities of this position. The Charter will also enable OswegoCounty to design its own form of government, best suited to local needs.The County Executive should be a popularly elected position (four year term). TheExecutive should have the responsibility for managing government operations, countywide, and delivering required services in a cost-effective manner at a level consistentwith revenues. This structure will position administrative responsibilities of governmentseparate from legislative and policy-setting responsibilities of the Legislature. TheLegislature will still use Committees to set policy and direction of departments andprovide essential feedback to the Legislature.An anticipatory and authoritative planning mode can be achieved as the Executive willhave clear accountability to develop long range plans to enhance growth anddevelopment in the community. Prudent risk taking can take place as the Executiveand Legislature balance current versus future needs of the County. A climate may bedeveloped whereby professional management can evolve to better address costcontrol, regulatory, goal setting and other good management practices currently in usein the private and public sectors.



23/76

The ultimate performance evaluator is the electorate. They will, through the ballotprocess, determine if required services are being provided and at the right price. TheExecutive will be under intense scrutiny by all political parties, taxpayers and theelectorate.

County Executive County Legislature

I IDepartment Heads Legislative Committees

Although there is necessary delay in the implementation of an elected CountyExecutive, there should be no delay in the implementation of the otherrecommendations contained in this report. Accordingly, all recommendations should beimplemented irrespective of timing of the County Director or County Executive steps.



24/76

4. Consolidate and streamline the departmental structure.FindingsGovernment employees provide a variety of services to the residents of OswegoCounty from at least thirty different locations. The following are common characteristicsand facts concerning work effort and structure of county employees.The 1995 budget contains appropriations for 1,174 full-time employees who receivedsupport from an additional 357 part-time and seasonal employees. The number of fulltime and part-time employees varied throughout the year and was partially dependenton the amount of employee turnover. An analysis of data from the last three yearsindicates a turnover rate of approximately 7% which equates to 80 employees per yearthat leave the county government system.

County government provides services by subdividing its operations into 26 differentdepartments. Eighteen departments and 90% of the employees provide a service tothe public while the remainder provide administrative services to the County.Administrative service departments include: Administration, Budget, Buildings andGrounds, Central Services, Clerk of the Legislature, County Attorney, Personnel andPurchasing. There are Significant differences in terms of the size of the individualdepartments. A few departments (such as Health, Public Works, Sheriff's and SocialServices) are relatively large and have between 100 and 300 employees, but a majorityof the departments are much smaller with eleven or fewer full-time people.There is a department head in each department; however, one department head inparticular has assumed responsibility for three separate departments: Social Services,Health and Employment and Training. In five departments, "front line" employeesreport directly to a department head. These departments are considered to have twolayers or levels of organization; one,level is the department head and the second levelis represented by front line employees. In the remaining 21 departments, there is anadditional one, two, or three levels of supervision between the "front line" employeesand the department head. Therefore, the County has up to five layers or levels withinthe organization.Approximately 180 employees supervise people, 310 people provide administrativestaff support and the remaining 648 employees provide a service directly to the Countyor its residents.

20 Summaty ofRecommendations


25/76

Departments operate independently from a service and financial standpoint. TheCounty Legislature measures departmental performance primarily by expenditures tobudget where independence is reinforced. Approximately $30 million of the annualbudget is not -allocated to departments. This would include Insurance, CapitalPrograms, Debt Service and Fringe Benefits not allocated to departments as well asthe largest segment, Legislative Accounts ($11 million in 1995 budget). LegislativeAccounts (Authorized Agencies) are programs funded by Oswego County whichsupport community agencies, activities or programs and are under the control of thoseparticular entities. (See Figure 4-1 on page 25.)Figure 4-2 on page 26 reflects a summary of the 26 departments, levels of theorganization and number of employees.

Assessment

County government has grown steadily to support the community. It appears thatindividual departments have evolved into varied structures and management styles overa number of years. The impact these varied structures and management styles haveon the organization manifests itself in five general categories: Employees andSupervision; Budget vs. Services; Departmental Independence; Activities vs. Results;and County-Funded Activities.

Employees and SupervisionThere is a wide range in the size of individual departments and levels of management.The average ratio of employees to supervision is 5 to 1. This overall ratio appears lowfor the type and nature of the work. Many departments are too small or narrowlyfocused which tends to limit creativity, flexibility and employee utilization, and inflatessupervisory requirements.

Budget vs. ServicesEach department has defined its activities and scope of work within the confines of itsprimary performance measurement, the annual operating budget. The generalphilosophy is for each department to provide the greatest amount of services within theapproved budget. This is an admirable goal but t y p i c ~ l I y as employees improve theirproductivity, departmental incentives are to expand services rather than reduce costs.Therefore, departments begin providing services which are outside their scope."Scope" is difficult to determine where departments do not have a clear mission orpurpose in terms of service, quality or range of work.



26/76

Departmental IndependenceDepartments tend to operate independently and have unique activities, howeverdepartments have many common activities. Various departments complete commonactivities with different policies and procedures. In addition, there are few sharedservices and activities across departmental lines. The best examples are informationmanagement, personnel, purchasing and financial control. The County has evolvedinto a highly fragmented structure where departments operate independently andtypically do not share common activities, resources and controls.

Activities vs. ResultsEach department appears to be narrowly focused on its own area of responsibility andtends to place emphasis on performing activities and not necessarily results. This isevident primarily where desired results and measurements are not defined. The impactof a fragmented organizational structure is the creation of excessive levels ofmanagement and administrative support staff. Excessive levels of staff perpetuate anactivities focus and can dilute results most important for the organization to achieve.Some departments have recognized this fact and have reorganized or are in theprocess of reorganizing. The most notable examples are Social Services andEmployment and Training where process-mapping has occurred and improvedproductivity can be measured.

County-Funded ActivitiesThere are a number of outside agencies and programs (Legislative Accounts) thatreceive county funding for a variety of purposes. In 1995, the total cost of such fundingwas $11 million (net cost to Oswego County of $6 Million) or 8% of the annual budget.Legislative Accounts do not appear to be as clearly connected to county-providedprograms and services. This results in what may be redundant - and overlappingactivities both within and outside the existing organization. As an example, it is clearfrom public input that residents expect county government to play a lead role incoordinating economic development. Although there are economic developmentfunctions contained within and outside the County organization, there does not appearto be clear government coordination of this key strategic effort. This raises the questionwhether economic development effort within the County is being optimized in theinterest of the entire community.



27/76

RecommendationThe County should immediately consolidate its departmental structure. Departmentswith similar goals -and purposes should be unified under a common department headand define their mission, scope and purpose within the confines of the County mission.Consolidation will improve the focus on results, interdepartmental synergy andcommunication, and help eliminate redundant or less value-added activities. Aproposed departmental structure is contained in Figures 4-3 and 4-4. The new structurerecognizes the four elected officials and places all other activities into five groups:County Attorney, Administrative Services, Economic Development, Human Servicesand Physical Services.Activities common to a number of departments should be centralized. Examplesinclude information technology, personnel, and purchasing, which should be centralizedinto Administrative Services. Accounting, cash receipts and other financial functionssuch as accounts payable, should be centralized into the Treasurer's Department.(This is further discussed in Recommendation 11.)It is recommended that the responsibility for all Legislative Accounts (authorizedagencies) be assigned to a county department. The various organizations receivingfunds would continue to control their own spending but the responsible countydepartment should administer, coordinate, monitor and evaluate the account to ensurethat money is being used consistent with the County mission, in the best interest of thetotal County. As an example, the proposed Economic Development Department wouldbe responsible to coordinate all county economic development efforts and funding toensure it is being effectively used and make recommendations to the Legislature asneeded. (Oswego County's economic development efforts are ptovided in theAppendix on page 59.)The County should begin to "flatten" the organizational structure and reduce levels ofthe organization. The County should move toward four or fewer levels throughout theentire organization: County Executive, department head, supervisor and front lineworker. The ratio of employees to supervision should average between 10:1 and 15:1.This will increase responsibility and decision making capabilitiesof the front line workersand significantly reduce middle management and corresponding support staffrequirements. This transition is a major work effort that will take several years tocomplete and, to be done properly, should follow a rigid, structured approach that willbe discussed in Section 5.The following table summarizes a current, conservative estimate of future employeerequirements assuming that there are no changes in the level and type of servicesprovided:



28/76

1995 2000Legislators 36 25Department Heads 26 11Other Supervision 154 65Staff Support 310 145"Front Line" Workers 648 654Total 1,174 900Employee I Supervision Ratio 5:1 11:1

24 SummaryofRecommendations


29/76

Figure 4-1ASSIGNMENT OF 1995 LEGISLATIVE ACCOUNTSTO COUNTY DEPARTMENTS-

DEPARTMENT ASSIGNED'LEGISLATIVE ACCOUNT

County ExecutiyeMunicipal Association DuesWCNY-TVMedical ScholarshipHumane SocietyCNY Health Systems AgencyCounty Library CouncilHistorical SocietyBrewerton Historical SocietyCIP GrantOswego PlayersCultural Services AdviSOry CouncilOswego County Sportsmen's Federation

Economic Deyelopment DepartmentRegional Transportation AuthorityOperation Oswego CountyEconomic Development InitiativeSmall Business Extension ServiceOswego County FairCNY Regional Planning & DevelopmentSoil Conservation DistrictCooperative Extension OperationsCooperative Extension AgricultureCooperative Extension 4-HCooperative Extension Home EconomicsOswego County Opportunities (transportation)

Human Services DepartmentCourt ExaminationsEnvironmental Management CouncilEducation of Handicapped Children

County TreaSUrer

TOTAL

Refund-Property Tax & AssessmentContingent AccountCommunity College Tuition

Summary ofRecommendations

TOTAL pROGRAM COSTS

$ 6,50012,50083,0001,000o94,00072,5003,00015,0002,500

15,0005,000

90,600270,800200,00052,60020,00035,900128,700209,300135,400182,900115,500850,000

60,000o6,419,400

50,0001,000,0001,500,000

310,000

2,291,700

6,479,400

2,550,000$11,631,100

25


30/76

26

Figure 4 - 2OSWEGO COUNTY STRUCTURE BY DEPARTMENT

Current Departments Full TimeEmployees

Aaninislration liillili:=:---------------- ----- --- 6& . m d E ~ ----------------------- - ---------- 10~ ~ ~ & G : : : - - --------========================enlr8ISeMces - - - - - - - - - - - - - - - - - - - - - --- 9

CIerk-legisiature - - - - - - - - - - - - - - - - - - - - - - - - 39CountyAllomey - - - - - - - - - - - - - - - - - - - - - - - - 2

County Clerk - - - - 34DisbidAllDmey ------------------------ 8

EmgencyManagement ---------- - -------- --- -- 8EmpIorn-tfTraining .. "",," ,.:",:.::,,:, - - - - - - - - - - - - - - - - - - - - - - - - 64Fi,.ContraI - --------------------- - - 11

Heallh - - - - 2030Ifice for the Aging - - - - - - - - - - - - - - 8

Personnel ---------- - --- 15Planning&CommOev - - - - - - - - - - - - - - 11

Probation - - - - - - - - - - - - - - 47Pnlmotion &Tourism - .- - - - - - - - - - - - - 4

Public Wor1cs - - - - 204Pun:hasing --- -- - - - - - - - - - - - - - - - - - -- 3

Real Property Tax - - - - - - - - - - - - - - - - - - - - - - - - 10Sherills .""", - - - - 142

Social Services - - - - 277TreasurerVeterans

Youth Bureau

o

,:;:;:::;:;::.;:;::::;:;::: .:'

1 2

-- -------- - - - - - - - - - - - --- 11-- - - - ---- ----- ---------- 4--------- - ------ - - - - - - - - - - - - - - - - - 53 4

Levels of Organization5 Total of

1,174Source: 1995Annual Budget Report& Personnel Department, County of Oswego



31/76

Figure 4 - 3OSWEGO COUNTY DEPARTMENT STRUCTURE

CURRENTCounty Legisla1ure ( ~ )

LegiIIatIft

PROPOSED( Interim)

County Legislature

Qo

Sf th eLegislature............................ .. - - - - - - - - ~ - - - - - - - - .... -------.... - - - - - - - ~: : :: Igty g"ic:t gg EJ Directorerk Attorney SheIiIf T_r e r County ofAttorney !AdminIStrativeElecled Elecled Elecled Elecled Services Director ~ " r e c t o r ~ orof of ofEconomic I1Iman PhysicalDevelopment SeMces 5efvices



32/7628

F i g u r e 4 ~OSWEGO COUNTY DEPARTMENT STRUCTURE

PROPOSED( Interim)

( )ounty Legislature SoftneI legisllllureEJ.................................................. - - - - - - - - - . - - - - - - - - - - - . - - - - - - - - ~ . - - - - - - - - - - - .: : : : I I I I~ g g g E J ~ ~ ~ ~ r e c t o rer1c Altomey Sheriff T ~ 0Iunty of of of ofAttomev dministrativ Economic Human PhysicalElected Elected EIec1ecI EJectecl Services Development Services Services

PROPOSED( Final)

( :) . ...c_o_u_nty___e_Q_is_la_tu_re_ , ( ~ ]_ legislature

.................................................. l---------.--.------.-----.-----------.: : :: I I I I~ g" g g E l ~ o r ~ ~ or ~ orOerk Attorney Sheriff T_ Q)unty ct ct ct ctAltomey dm' istmiv Economic Human PhysicalElected Electecl Elected E/;fecl ~ Development Services ServicesSummary ofRecommendations


33/76

5. Involve all employees in the change process and formallya.dopt principles of continuous improvement.FindingsAs outlined in Recommendation 4, Oswego County employees are organized intodepartments and then typically into separate work groups which perform commonactivities. In most departments, there does not appear to be a clear performancemeasurement system that focuses on service, quality or cost per unit of output. Aprocess for involving employees in continuous improvement efforts such as qualitycircles or performance improvement teams was also not prevalent in all countydepartments.Potential reductions in Federal and State funding combined with progressive leadershiphas led two departments to begin a formal change process. Employment and Trainingand Social Services have been working with a consultant to redesign their workactivities. The customer-focused effort called "Jobs First" is intended to get current andpotential welfare clients to work as soon as possible. Driven by reduced programfunding, the two departments intend to reduce the time, people and cost required todeliver their service. They have developed several transition and work redesign teamscomprised of a cross section of employees to facilitate the process. The formal changeprocess has been active for more than one year with major improvements expected tobe implemented during 1996 and 1997.

AssessmentFragmentation of county departments has resulted in a broad range of employeeinvolvement and continuous improvement activities. A formal improvement processinitiated in larger departments such as Employment and Training and Social Services ismore difficult to implement in smaller groups. The recommended consolidation ofdepartments with common goals (Recommendation 4) is essential to the process andwould enable an effective work redesign process to begin.It is not clear that the two departments that have begun a work redesign process haveformatted a comprehensive strategy with respect to displaced or redundant positionsparticularly those related to middle management. This strategy must be developed,communicated and implemented or the process will only achieve marginal success.Our interviews and discussions have not revealed any other county or departmentdriven initiatives that involve formalization of any customer goal measurement systemsor the adoption of any continuous improvement concepts.



34/76

RecommendationIt is recommended that the County involve all employees in a formal continuousimprovement process. The core of the process will take two to three years toimplement and sustain. The following is a list of suggested steps:1. After consolidation into new departments (Recommendation 4), leadership shouldestablish and communicate clear, measurable and customer-driven goals. Goalsshould relate to improvements in service, quality and costs and be linked to theCounty mission as discussed in Recommendation 6. A rough initial outline and longterm plan should be developed that conforms to reducing levels of the organizationto four or fewer: County Executive, department head, supervisor and front lineworker.2. All county employees should be systematically trained in Quality Management. Acentral purpose of the training is to ultimately form strong quality and service linkswith both suppliers and customers to promote continuous improvement. Trainingshould be championed by the County Executive and centrally coordinated by theAdministrative Services Department. The training should be done by key countyemployees who are orchestrated by the Director of Administrative Services.Training should include employee involvement skills, problem solving, qualityawareness and continuous improvement techniques, quality,management skills andstatistical methods. An outside consultant should be employed to "train the trainers"in the various employee involvement and quality management practices.3. Quality Management training builds the necessary foundation for each department

and work group to refine specific quality, service and cost goals for respectivecustomers. Quality Management techniques can be further utilized to develop or"process map" a streamlined operation that maximizes quality and service whileminimizing costs.4. Development and optimization of a streamlined operation requires a realignment ofemployees both within and between the work groups. These changes require theactive involvement and participation of all employees. Employees should receivespecific on-the-job-training that will increase their flexibility and broaden their scopeof daily work. Non value-added work should be eliminated, thus reducing thenumber of people required to achieve quality and service goals. The effective useof information technology is an essential ingredient.. in making these improvements.It should be noted that this change will be viewed as a direct threat to the security ofmiddle management employees as the County moves to four levels of theorganization. These employees should be moved quickly to other opportunities orthey will be a distinct hindrance to the continuous improvement process. If properlyplanned, layoffs will not be required.



35/76

5. Each department will be comprised of one or more separate teams. Each team willhave one supervisor or leader that exists to provide support to the membership.Teams will be the nucleus of the new organization; higher goals and expectationsshould continually be established by the Legislature, County Executive anddepartment heads, thus driving the continuous improvement process.Effective facilitation of this entire process and dramatic improvements in the use ofinformation technology are two key ingredients of the change process that must besuccessfully implemented by the Director of Administrative Services.



36/76

6. Implement a consistent individual performance measurementprocess.FindingsBased upon interviews conducted with many department heads, it was found that thereis only limited application of a formal individual performance measurement processthroughout county government operations. Very few departments formally define theirgoals on an annual basis. Department heads are not measured by their ability toachieve results against set goals.There is no comprehensive county-wide process for setting top level goals, which canbe used by the various departments for setting their own goals. Without thisopportunity to achieve "alignment of goals," there is no opportunity to create a"singleness" of purpose throughout the County.

AssessmentThe classic definition of management is "getting work done through others". Successfulmanagers, who in turn create successful organizations, excel in their ability to inspirethose who work for them to achieve results. "Getting work done through others" beginswith the process of defining clear, concise statements which identify what a particularorganization is all about, what it desires to accomplish, and how all the resources in theorganization are to be focused or aligned to achieve desired r e s u l t s This processconsists of the following components: A Mission Statement Long-Term Goals Short-Term Objectives Performance Measures Performance ReviewsWhen all of these components are properly built into the management process andculture of any organization, they collectively create a spirit of purpose with everyemployee in the organization from the top leader to the people on the front line. Theyknow what their individual performance is against specific measures, and how they arecontributing to the success of the overall organization. Each employee also has abenchmark for determining if a given job activity helps the organization in achieving itsoverall purpose. Because every organization has a limit on available resources (bothfinancial and human), it is important that only those activities which directly support theoverall purpose and mission of the County should be pursued. These types of activitiesare termed "value-adding" activities; non value-adding activities create a waste ofresources and detract from accomplishment of purpose.



37/76

There are essentially two fundamental approaches to the performance assessmentprocess:Traditional: Goals focused on activities. Goals are not easily measurable, not fully aligned with the goals of others in the

immediate organization, and not highly results oriented. Reviews tend to occur annually, generally on the anniversary date of the incumbent. Assessment of results tend to be somewhat subjective; salary increases are nottightly linked with results. No training is provided to improve skill sets needed forimproved performance.

Results-Oriented performance Management process: Goals focused on attainment ofresults. Goals are easily measurable, fully aligned with the goals of all other levels of

organization, and focused on achieving results consistent with overall organizationobjectives. Reviews are ongoing, and commence at the beginning of the year with clearagreement between all customer-supplier relationships on individual goals. Periodic review of performance against goals is used to provide opportunity forcorrective action prior to year end. Assessment of results is objective; salary increases are tightly linked to achievementof results. Training needs are identified based on performance gaps.

RecommendationBased on the available options, it is recommended that Oswego County implement aresults-oriented performance measurement process, as summarized in Figures 6-1 and6-2 on pages 35 and 36.By creating a results-oriented culture, with the entire organization focused on achievingresults which have been determined to be critical to the success of the organization,Oswego County will achieve a higher quality of service at a reduced cost by eliminatingnon value-adding activities. This type of performance management process alsocreates the opportunity for a more efficient organizational structure. As "front lineworkers" become more aware of what is expected of them and what types of activitiesare important to the overall success of the County, they need less "hands onmanagement" while they perform their job duties. This allows for the reduction of layersand numbers of management, which also helps to improve communication betweenworkers and department level management.



38/76

Once implemented, the performance measurement process becomes a very useful toolfor assessing individual performance and building higher levels of accountability into theorganization. Two truisms of management are that there cannot be achievementwithout accountability, and you cannot improve what you do not measure. This processof assessing individual performance against the pre-established objectives is theprocess of establishing accountability. It is the vehicle which links individualperformance to county objectives, its mission, customer needs and core jobrequirements;Lastly, this type of performance measurement process is a useful tool for identifyingtraining and development needs for county employees. Just as the level of successagainst objectives can be used to determine pay increases, performance gaps canidentify additional skills an employee may need to be successful in the moreprogressive organization. By providing training to employees and allowing them tobecome more effective on the job, they have the opportunity for continued personalgrowth, development and career advancement.A formal individual performance measurement process will provide the followingbenefits to the County: improve efficiency of the County, reducing costs while at the sametime increasing the quality of its core services drive strategic objectives throughout the entire organization maximize employee performance clarify and support roles of the employee, supervisor and manager send a strong message that the County believes in and supports thedevelopment of its employees



39/76

PlanningHorizon

Long Term(3-5 Years)

Intermediateterm(1-3 Years)Short Term

(1 Year)

Short Term(1 Year)

Short Term(1 Year)

Immediate &Continuous

Figure 6- 1PERFORMANCE MEASUREMENT

ALIGNMENT PROCESS

PerformanceParameter Expected OutcomeOrganization Individual

County Definition of 'WhatMission ~ is our purpose ofbeing"+General Maintains direction~ consistent withGoals purpose+

Annual County ~ Focuses resources County LeadershipObjectives to maintain direction PerformanceMeasurement+

Dept. Head Aligns resources to IndividualObjectives ~ achieve objectives AssessmentMerit $ & TrainingI,

Mid-Mgmt. Aligns resources to IndividualObjectives --.. achieve objectives AssessmentMerit $ &TrainingI,

Team Based --.. Focuses teams on Individual & TeamInitiatives achieving desired Training &results Development

Summary of Recommendations 35


40/76

Figure 6-2COMPONENTS OF PERFORMANCE MEASUREMENTMission Statement Answers question, "What is our purpose for being?" Defines boundaries for expenditure of limited county resources. Provides a reference point to guide in day-to-day decisions.Goals and Objectives Focuses resources on only those activities which are consistent with CountyMission. Defines what performance parameters will be measured. Provides basis for assessment of individual performance. (People do thoseactivities which they are measured by.) Drives the ongoing "continuous improvement" culture.Performance Measures Allows for continuous feedback to "how are we doing?" Provides additional opportunity to emphasize need to focus all resources on onlythose activities which are "sanctioned" by County Mission.Formal Performance Feedback Sessions Provides opportunity for "mid-course" corrections if results are not consistent withobjectives. Allows for identification of training needs to sharpen skills needed to achieve results.Salary Increases Directly linked to accomplishment of objectives. Creates "results-oriented" culture. Reinforces alignment of activities consistent with County Mission.

Training and Development Used to develop skill sets needed for goal achievement. Full-range from "soft" (leadership, team dynamics, problem solving) to "hard"(technical, equipment specific, computer literacy) tools.



41/76

7. Create an ongoing compensation and benefit strategyrecognizing union leadership and involvement.

FindingsThe County's Personnel Department provided detailed, county-wide data for analysisand sample compensation and benefit information representing a cross section ofemployees. The information was then analyzed relative to the 1995 Annual Budget andwill serve as the basis for the findings and assessment.There are several work schedules employed in the County but the two principalschedules are a 40-hour work week (8 hours per day) and a 35-hour work week (7hours per day). County estimates indicate that approximately 75% of countyemployees are scheduled on a 35-hour work week. Employees earn an averageannual vacation of 20 days, holidays totaling 12 days, and receive 12 guaranteed sickdays. Therefore, the typical employee works 83% of the scheduled time but will alsowork the equivalent of 12 days (5%) of overtime. This average overtime is misleading,however, because it is heavily skewed to three departments: Pubic Works, Sheriff'sand Health.The average base compensation for all county employees is $13.79 per hour and thetotal cost is $23.12 per hour worked. This indicates that the County contributes anadditional $9.33 per hour worked or 68% over the base rate for vacation, holidays, sicktime, overtime, taxes, health benefits, life insurance, retirement and variousmiscellaneous expenses. The County has had the benefit of an over-funded New YorkState Retirement System, so that over the next three years the cost of this benefit willincrease by $2.5 million per year or $1.36 per hour worked. Figure 7-1 on page 39,provides an annual breakdown of these costs and excludes the cost of part-time,temporary and seasonal employees where $3.5 million (357 employees) was providedfor 1995. Approximately one half of the part-time employees receive partial benefitcoverage.

AssessmentAlthough the overall base rate appears competitive in the community, the Countycontributes an additional 68% to employees to cover fringe benefits. As a comparison,business and industry reviewed in Oswego County will average between 40% and 55%when calculated on the same basis suggesting that the County is paying a benefitpremium. Some of the principal areas of difference are in the short work week (35 vs.40 hours), guaranteed sick time, and minimal contributions employees make towardhealth benefits. The rapid increase in New York State retirement liability willdramatically increase the current fringe benefit rate by another 10% (to 78%) or $2.5million if no other changes are implemented.



42/76

The County employs an abnonnally high number of temporary and part-timeemployees. The annual turnover and absentee rates would support a temporary andpart-time work force of 50 to 100 people which is one quarter of the actual experiencein 1995. Figure A-3 in the Appendix (page 65) contains a detailed breakdown of the1995 personal services budget.

RecommendationThe County should develop a five-year compensation and benefit strategy involving thethree unions and management represented employees, to achieve long-tenn reductionsin overall labor costs.The suggested improvements in productivity will require considerable discussionsaround job flexibility if optimum benefits are to be realized by the County and itsemployees. Department consolidations, organizational streamlining and the focus onservice and quality will have a significant impact on temporary and part-time employeerequirements as well. This situation along with all factors should be openly discussedand a strategy developed. As examples, the evaluation of a 40-hour work week orguaranteed sick time should impact part-time and full-time requirements in an effort toreduce overall costs.A compensation and benefit strategy should be designed to reduce total cost to theCounty while increaSing productivity, responsibility and flexibility'-

38 SummaryofRecommendations


43/76

Rgure 7-1OSWEGO COUNTY 1995 PERSONAL SERVICES

ESTIMATED DISTRIBUTION( MIWONS OF DOLLARS)

Cost I!!!: Em I!!ol!!!Pay Dlstrtbution category Cost to County per year per hour workedPay for Time Worked $24.0 $21,600 $13.79Overtime I Additional $1 .9 11700 $18.89

Subtotal $25.9 $23,300 $14.07 (1)Vacation I Holidays $3.5 $3,200 $1.93Sick Time $1.3 $1,200 $0.73FICA I Taxes I Wk Comp $4.3 $3,900 $2.35Health I Life Ins $6.3 $5,600 $3.38NYS Retirement $0.8 $700 $0.42Other $0.4 400 $ 0.24Total $42.5 $38,300 $23.12

Source: 1995 Annual Budget Reporl & Estirrates from Personnel Department, County of OswegoNotes: Costs are based on 1,110 Full Tame ElJ1)Ioyees and excludes the Departmentof ErrpIoyment& Training

(1) $ per hour wortced subtotal is the average of Pay for Tame Wortced @ 1,566 hrslyr/errployee andOvertime / Additional @ 90 hrslyr/elJ1)loyee

Tax Sick

Retr

Pay for time worked


% of Total57%4%

61%8%3%

10%15%2%1%

100%

39


44/76

8. Review services on an ongoing basis to ensure consistencywith the stated mission.

FindingsThe County of Oswego provides residents a wide array of programs and services, andalthough the County does not have a stated county mission, there is a generalunderstanding of its purpose among Legislators, employees and the public. Theconsensus among all groups is that county government should provide essential orneeded services in a cost effective manner to residents.Services have been added or changed over the years but the terms "essential" or"needed" have not been defined or reviewed either for individual projects or ongoingactivities. In most cases, the delivery of services are evaluated in subjective terms bycounty employees and there is little evidence of quantitative measurements being usedto evaluate the quality or level of the services being delivered. The term "cost effective"to most employees equates to "net costs" to county residents of the 26 individualdepartments. In this context, net costs refers to the difference between departmentalrevenue and direct costs which is the amount that will ultimately be paid by countyresidents as real property taxes. Direct costs to operate each department includeemployee salaries, overtime and overhead.Direct costs do not include employee fringe benefits, indirect or semi-fixed costs.Fringe benefits include health and life insurance, and retirement benefits. As discussedin Recommendation 4, indirect costs would include the 8 departments that are providingadministrative services to support the other 18 direct service departments. Semi-fixedcosts consist of capital programs, debt service, insurance and Legislative Accounts(authorized agencies). In total, fringe benefits, indirect costs and semi-fixed costs total$40 million or 28% of the total county budget for 1995, and are currently not allocated tothe 18 service departments in the annual budgeting process.

AssessmentAlthough County government does not have a stated miSSion, there are generallyaccepted views by employees and residents that the County should provide essentialservices. Although the term essential has a variety of interpretations, county servicesshould complement the Federal, State and private sectors rather than compete withthem. In situations where the County is competing with other sectors, service, qualityand cost effectiveness should be determined and used as a deciding factor.



45/76

County government does not have objective, quantitative methods for analyzing theservices that it is currently providing. Several departments maintain that there are nocosts to county residents for their services, as is evidenced by the annual budgetreport. This analysis, however, excludes total fringe benefits, indirect costs and semifixed costs expended to support the activities of those individual departments.Both the public and private sectors have discovered that improvements in quality andreductions in cost are both achievable and necessary to survive in today's globaleconomy. Such improvements have resulted from the recognition that focusing on the"coren business of an enterprise is vital.

RecommendationAll programs and services, whether delivered by the County or by outside agencies,must be subject to continuous review to ensure consistency with the stated mission.This review process must be formal, documented and a primary function of theStrategic Planning Legislative Committee, as outlined on page 14 of this report.A formal process should be established that requires department heads to use costperformance benchmarking in the administration and oversight of all programs andservices. Comparative data on best practices can be used to establish concise targetsor goals against which cost and performance can be measured. This analysis, however,must include total fringe benefits, indirect costs and semi-fixed costs expended tosupport the activities of those individual departments.As part of the formal process, the County must focus on its core business and classifyits services into the following categories:MandatedMandated services are essential services in infrastructure, health and welfare.DiscretionaryDiscretionary services are services which may be privatized or outsourced to othergovernment units. Following are some of the activities that appear discretionary whichshould be analyzed by the Strategic Planning Committee using true cost informationand considered for privatizing or outsourcing: road and bridge construction airport operations motor vehicle departments Sheriffs road patrol payroll data processing



46/76

DivestedDivested services are services that compete with the private sector or other governmentunits which alreaay provide or have jurisdiction over these services. The CountyLegislature should develop a comprehensive transition plan for the private sector orother government units to absorb the following activities without quality .or serviceinterruption to county residents: nursing home mental health home health care buildings maintenance grounds maintenance furniture building and restoration building capital improvements asphalt plant fuel service at airport snowmobile trail grooming jail food servicesAs reported in Recommendation 4, Legislative Accounts (authorized agencies) shouldbe reassigned to specific departments as outlined in Figure 4-1 on page 25. Thischange would improve the oversight and accountability of these programs and servicesand ensure that the administration, process, review and critique are consistent with allother County services.



47/76

9. Improve and standardize budgeting and benchmarkingpractices.

FindingsThe County's budget process consists of preparation of operating budgets by thedepartment heads, with approval of each departmental budget by the Legislativecommittees. The Budget Department provides guidance to the department heads onoperating expenses and the Personnel Department provides guidance on issuesrelated to the budgeting for labor and staffing. Once developed by the departmentheads, the budget is compiled by the Budget Department; the Budget Departmentcoordinates the review with the Ways, Means and Budget Committee, the PersonnelCommittee, and finally the full Legislature.Budget preparation is based primarily on historical information, using the previousyear's budget as the baseline for the new budget. Committees are generally involved inportions of the budget development with their respective departments prior to approval;this level of involvement varies from committee to committee. Adjustments to thebudget are made to offset expenditures and are made with committee approval.Adjustments which increase budget line items are based on full Legislative approval.Although some internal benchmarking between departments exists for developing someline item budgets, no substantial external benchmarking of costs for services is used asa guideline for budget development.

AssessmentWith no formally defined budget process, the existing process is highly fragmented.There are no comprehensive, centralized budget objectives (e.g., type of services, levelof services, ceilings on spending by major line items, staffing reduction targets, etc.)available to the department heads for use in generating the budget. The budgetobjectives provided to the department heads are as diverse as the interests and intentsof the legislative committees. In addition, with the main basis for the new budget beinglast year's budget, there is no formal process to challenge the value of each major itemduring the budget development process. In general, the guiding principle used duringthe budget development process is "last year's actual expenses with no additionalincreases, or with a uniform percent change affecting 'all departments"; this creates ageneral expansion of the budget, and results in the corresponding "scope creep" in theservices provided by the County identified in Recommendation 1.Benchmarking, or comparing the costs of a service provided by the County, with costsfor the same or similar services in other areas of either the public or private sector,allows for the identification of "best in class" costs. Benchmarking can be a usefulexercise to ensure that the cost of services provided by the County are consistent with



48/76

or competitive with the same services elsewhere, and helps to develop cost reductionobjectives which can then be incorporated into the budget. The budget then becomes auseful performance measurement tool as the actual costs are compared with those inthe budget. Overall benchmarking, when used in this manner, helps to improveorganizational productivity through the understanding of Flow other organizationsprovide services in an efficient and cost effective manner.

Recommendation

The County should develop a formal budgeting process. This process should includeexternal benchmarking to identify "best in class" costs; centralization of the process ofsetting budgetary objectives; and should change the manner by which budgets aredeveloped from one of "historical extrapolation" to a "zero-based" budget process.The process should commence with the definition of overall budget objectives by theLegislators, based on antiCipated revenues and reimbursements, and an appropriateuse of reserves. From this overall financial objective, the County Executive andlegislative committees should develop department specific objectives based on anassessment of the specific programs and services needed, consistent with the Countymission and the residents' needs. These department specific objectives should then beused by the department heads to develop the budget for their department. This actualbudget development should be "zero-based", which requires that the budget begenerated through the identification of the various activities needed to supportprograms and services, and all of the related "support costs" incurred by thoseactivities. It should be noted that this type of budget development differs substantiallyfrom the current method in that it begins with a build up of costs; the current processuses last year's spending as the basis for the budget development.Once the budget is generated, the review process should commence with the CountyExecutive, who ensures that the proposed budget both satisfies the mission andobjectives of the County, and complies with the financial objectives -developed by theLegislature. The County Executive must also "sign off' on the budget package_ and beresponsible for reviewing it with the committees for their agreement that it complies withtheir expectations, and ultimately for submitting it to the full Legislature for approval.This process is not as simplistic as described. At each step in this process, there needsto be interaction between each level to ensure that all expectations are fullyunderstood, and issues are fully addressed. Negotiations between department heads,the County Executive and legislative committees will also need to occur to achieve anappropriate balance between the desired programs and services, and revenue.



49/76

Legislative Accounts, as identified in Recommendation 4, should also-be incorporatedinto the above budget process. As appropriate, the department head or CountyExecutive should be responsible for developing a budget for each of these items, andbe held accountable for complying with the budget in the spending plan.The Ways and Means Committee should be responsible for establishing theclassification, or identification, of line item accounts; these should be standardizedacross all county budgets. The County Executive should be held accountable for bothoverseeing and complying with all of the departmental operating budgets and in turnshould establish strict accountability of the department heads for variance analyses ona monthly basis. Throughout the year, department heads need to review varianceswith their respective committees for the purpose of identifying an action plan to correctspending problems. In the event that an unusual situation creates a significant budgetvariance, the County Executive should propose a budget adjustment, balancingaccounts between departments if necessary, to ensure that the County as a wholecomplies with the annual budget. The Legislature should continue to be responsible forreviewing and approving any such proposals.



50/76

10. Develop and implement management information systemscomprised of cost accounting and modeling methodologies todetermine service efficiency.

FindingsPresently, cost information is available through the County's financial system on a lineitem basis. Information is limited to department level direct costs using subaccounts orobjects, such as salaries and wages, telephone and furniture, and is availableessentially on a cash basis.Actual expenditures reported to department heads do not accurately reflect resourcesconsumed to produce specific units of service in specific periods of time. For example,quantity purchases of supplies or prepayment of contractual expenses covering severalmonths' usage is reported as an expenditure in the month that the invoice is recorded.Although, an indirect cost recovery project is prepared by an outside firm for claimsreimbursement purposes, no regular allocation of indirect costs to services is made.A consistent, county-wide approach to developing and using cost information is notevident.

AssessmentManagement information systems are tools for department heads to accomplish countywide and departmental operational objectives. Management information may takemany forms and may encompass areas such as service, volume, quality and cost. Asdecision makers, department heads need to know the total cost of various activitiesunder their responsibility, and how cost of delivering services are affected by certainmodeling scenarios, such as change in customer characteristics or service definition.Cost accounting systems provide information on costs of existing services and can beutilized to conduct modeling or other pro forma analyses. Operation of the systemrequires detail analyses of the use of resources and can help reduce costs which areunder the department head's control, but do not add value to services.Knowledge of total cost is necessary to make informed decisions, particularly in light ofthe current county realities affecting revenues and" costs. The lack of true costinformation limits the department head's ability to accurately compare revenues fromfees and other sources against the consumption of resources to provide that service.Service alternatives cannot accurately be compared without cost-benefit analysis basedon total cost.

46 Summary of Recommendations


51/76

RecommendationThe County should develop a consistent, county-wide approach to costaccounting/manag-ement. This approach should consider: standards for level of detail allocation of indirect costs potential uses of cost information by county decision makersThe County should also develop accounting procedures for consistency among yearend audited financial statements, the cost accounting system and other financialsystems.Implementation of a cost accounting/management system will provide total cost, costversus revenue, service line profitability and modeling. This system should useinformation developed in the "zero-based" budgeting process, and service definitionand volume measures established during.departmental planning.The County Executive should investigate cost accounting/management systems bybenchmarking systems used in other counties, and direct all county departments to bephased into that system. Over time, as the County gains experience in using costaccounting/management information, the County Executive should consider using moresophisticated measurements, such as activity-based cost accounting. .



52/76

11. Improye internal controls oyer purchasing. cash receipts andfixed assets.FindingsThe County established a purchasing policy in 1980 and has made periodic changes,the most recent being February 1995.The purchasing activity is presently centralized for supply and material purchasesabove certain thresholds ($500 per order per vendor for most departments; $2,000 perorder per vendor for Building and Grounds and Public Works Departments). Purchasesbelow these thresholds are made at the department level. Departments issuing claimsvouchers for departmental purchases below these thresholds also receive invoices, andmatch vouchers, invoices and receipt notifications for submission to the PurchasingDepartment. The Purchasing Department performs a matching function for purchaseorders, receipt notifications and invoices for purchases above these thresholds. Thismatching function results in approval of the invoices for payment.The County Treasurer audits purchase orders and vouchers. The PurchasingDepartment and the Treasurer's Department identify purchases that would benefit fromstanding contracts.Cash is presently received in various locations throughout the County and occasionallychecks are made payable to persons other than the County Treasurer.Presently, there is no centralized inventory of a" fixed assets. Partial inventory listingsare maintained by both Public Works and Purchasing Departments. Under theCounty's purchasing policy, the Purchasing Department is responsible for maintaining acomplete, county-wide inventory of fixed assets. The Treasurer's Office, however,maintains aggregate cost information of fixed assets for financial reporting purposes.

AssessmentInternal control principles exist to assist in developing financial and administrativesystems which reduce the possibilities of loss because of inappropriate use. Emphasisis on systems design rather than the individuals using systems."Segregation of duties" requires that administrative functions such as purchasing bedesigned in components, with distinct management responsibilities for eachcomponent. The department issuing the purchase order (or claims voucher) should notbe the department that performs the matching function. This accounts payable functionresults in approving the invoices for payment, but is subject to a further check by theindividual issuing the payment.



53/76

In addition to internal control issues, a strong, centralized purchasing function offerseconomies which allow overall cost reduction. This can be accomplished by usingquantity discounts, standing purchase orders, and materials management principles.Segregation of duties should also exist in the cashier function With regard to preparationof bank deposits and posting of certain bookkeeping entries. In designing systemsdealing with cash, a single cashier should be established to receive all payments andexert strong controls over all aspects of handling cash. A centralized cashier functionhelps to avoid delays and discrepancies in investable cash balances.Internal control is also exerted by maintaining information on the type, location, age andother characteristics of fixed assets. Information systems allow department heads toplan the purchase, maintenance and replacement of fixed assets. The risk of loss,obsolescence and duplication is reduced through internal fixed asset control which iscentralized.

RecommendationThe County should centralize the purchasing and accounts payable functions. Asmentioned in Recommendation 4 on page 23, there are a number of administrative andfin.ancial functions which should be consolidated. For both organizational efficiency andinternal control, purchasing should be centralized in the Administrative ServicesDepartment and the accounts payable function centralized in the Treasurer's Office. Allinvoices should be mailed to the Accounts Payable section of the Treasurer's Office.The County should designate a single cashier for receipt of all cash under control of theCounty Treasurer and require that all payments be made payable to the CountyTreasurer.The County's purchasing policy should be changed to reflect strict, county-wideguidelines for inventory control of all fixed assets managed through the Treasurer'sOffice.



54/76

12. Lead and coordinate intermynicipal cooperation within OswegoCoynty.

FindingsThe County of Oswego is comprised of over 138 separate governmental jurisdictionswithin its borders including at least 43 municipal corporations: County of Oswego, 2cities, 22 towns, 10 villages, 8 school districts, 15 special purpose units (agencies,authorities, libraries), 73 town special districts, and at least 5 fire districts.AssessmentAccording to officials of various units as well as the general public, many.of the abovegovernmental jurisdictions overlap, resulting in service delivery complications,unnecessary administrative expenses, and confusion to the citizenry as to where theyshould go to receive services or have their needs addressed.Many local problems require a regional approach to better deal with antiquated laws,traditions and jurisdictions which do not meet modem needs. Spending is exceedingtaxpayers' ability to pay and Oswego County must look beyond short-term solutions andinto more long-term cost cutting and efforts to consolidate. In the area of assessment,for example, the County and the current Assessing Units in the County (Towns, Citiesand possibly some Villages) should study the benefits and costs of having all realproperty in the County assessed by a central assessing agency, as opposed toindependent assessments by each Town, City or Village Assessing Unit .Intermunicipal groups have existed since the 1950's in communities such asIndianapolis, Jacksonville, and Nashville. Dialogue among such groups bringsprogressive problem-solving, often leading to consolidation and the sharing of criticalservices among jurisdictions. Often there is just a basic need to maintain existing levelsof service, by finding a partner to share in the cost there is a greater chance ofmaintaining necessary service levels.Seven years ago, the City of Syracuse and the County of Onondaga initiated an"Intermunicipal Consortium" where elected officials met to discuss their problems andexchange solutions, thereby establishing greater communication. In 1996, theSyracuse Intermunicipal Consortium will become much more formal. Their schedulewill include formal agendas and timelines, as well the inclusion of the SyracuseSchool Districts. The Consortium will be led by the Onondaga County PlanningDepartment.



55/76

RecommendationThe County of ~ w e g o should take the lead in organizing an fnterrnunicipal Councilcomprised of leaders from the State, towns, cities, school districts and the County, tomeet on a regular basis in an effort to discuss problems of fragmentation andduplication of services.This Council should be established to begin the process of

goals 2000 report

Documents