Tuesday, June 1, 2004

County gets frugality tips


Consultant says consolidating purchases, being competitive can save millions

By Cindi Andrews
The Cincinnati Enquirer

The paper pushers who keep Hamilton County government running could save taxpayers $17 million or more a year by changing how they buy everything from nail clippers to copying machines, a New Jersey consultant has found.

Yes, nail clippers.

Centralized purchasing is by far the most significant recommendation A.T. Hudson & Co. has come up with in reviews of 10 county departments for cost efficiency and customer friendliness. Other recommendations could save up to $790,000 and make it easier for residents and developers to do business with the county.

"People said if you cut the cost of government, you're going to hurt services, and we proved them wrong," Commissioner Phil Heimlich said.

Hudson has spent a year and $1.9 million compiling recommendations for the county commissioners. It has completed reviews of Building Inspections, Environmental Services, Personnel, Communications Center and several other offices. It expects to finish a review of the department of Job and Family Services and the public defender's office this summer.

"All in all, there's really no smoking guns," said Tim Holland, senior vice president of Hudson. "We have a positive opinion that the county is professionally run, but any organization needs to look at itself to improve."

The consultants found the biggest potential savings in the Department of Administrative Services, the county's budget office. Six people there handle some of the purchases that are expected to cost more than $25,000 and thus must be advertised for bids. They also help with smaller purchases, but other departments do a lot of their own buying.

Hudson's recommendation would consolidate all purchasing in Administrative Services, enabling the county to take better advantage of bulk discounts and ensuring that all supplies are purchased for the lowest possible cost, Holland said.

The county was already headed in that direction through its use of DemandStar, an online site that lets the county get bids from multiple companies, much as home buyers can comparison-shop for mortgages on the LendingTree Web site. Eric Stuckey, head of Administrative Services, estimates the county has saved $6 million since it began using DemandStar in 2000.

"We're finding that we're getting a lot more people competing for our business, which leads to better prices," Stuckey said.

Still, since purchasing is fragmented, some departments are using DemandStar more than others. Holland estimated that making changes in purchasing and seeking more grants will produce $3.4 million in savings and income for the county in the first year. If all county departments participated, centralized purchasing could save $8.3 million to $17.3 million a year, according to Hudson.

"It's not like the federal government buying the $400 hammer, but there are opportunities there," Holland said.

One county employee went to Administrative Services seeking a better price on a copier quoted at $16,000. Through DemandStar, the county got the same copier for $14,000 - from the same vendor who gave the $16,000 quote.

The coroner's office, quoted a cost of $10 for nail clippers, also turned to Administrative Services, which found them for 89 cents apiece.

"These customer service improvements won't bring the dead back to life, but at least we can cut their nails for less," Heimlich said.

The commissioners hope independent officeholders such as County Auditor Dusty Rhodes and Sheriff Simon Leis will let Hudson or another company review their offices.

"The results speak for themselves," Heimlich said. "Everyone needs to be accountable, and everyone needs a second set of eyes."

Recommendations

Among other changes a consultant has recommended to make Hamilton County government cheaper and more helpful:

• Creating a one-stop location for all building inspection permits and fees.

• Having the Building Inspections Department review small commercial construction projects every day instead of once a week.

• Replacing a licensed electrician at Paul Brown Stadium with a lower-paying general maintenance position. Most of the electrician's time is spent changing the stadium's 25,000 light bulbs.

• Consolidating the tuition reimbursement program and putting it in the Personnel Department.

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E-mail candrews@enquirer.com