Study On Merging Town, School Functions Outlines Four-Phase Plan

By John Voket

A study by a regional accounting, business and municipal services firm examining the potential for taxpayer savings by merging certain town and school district “back office” functions was released to The Bee April 13. The “Operations Feasibility Study” was commissioned by the town in May 2011 and was expected by last September, but it was delayed as the final version was refined because officials believed initial recommendations were too aggressive.

Blum Shapiro, which has offices in West Hartford and Shelton and Rockland, Mass., completed the report by working closely with First Selectman Pat Llodra, Town Finance Director Robert Tait, Superintendent Janet Robinson and district Business Manager Ron Bienkowski.

But Blum Shapiro representatives also interviewed or observed other town officials and employees, gathering the data required to complete recommendations on a four-phase plan. In developing that plan, the report states that “the project team tracked information obtained during individual interviews and discussions to better understand the technical, functional and business issues confronting the town and school district from an operational, business and technology perspective.”

The “information was then analyzed to determine a framework that may fully or partially consolidate support provided to all operations within the municipal services and school district,” according to the study.

In the coming weeks, Blum Shapiro personnel are expected to discuss their findings with the Legislative Council, and the finance and education boards.

Before the final draft of the study was signed off on by the core four officials, Mrs Llodra told The Bee that the process of refining the report into something the town could implement has been lengthy.

She said the final version bears little resemblance to the first draft, which came to her with what she described as “much stronger and faster recommendations for change.”

“The original report focused much more on the financial [consolidation] piece, and strongly called for a fast change in the [school and town] merger of financial management,” Mrs Llodra said. “It was pretty upsetting to those who thought the systems currently in place were working well, and there was no benefit to change.”

Mrs Llodra said after presenting the first draft of the consultant’s report, she and Mr Tait sensed a conflict growing from “anxiety” about the initial recommendations.

This anxiety appears to be born out in introductory remarks of the report, which outline three common themes raised by many individuals contributing to the report: “We think it is a good idea to share services; we are concerned about our jobs; and we have invested too much time and energy into our existing department and do not want to change.”

Successful Initiatives Noted

The report also noted a number of “very positive and successful initiatives that have had a significant positive impact on the overall operations within the town and school district. Some of these initiatives are:

*The town and school district displayed the ability to work as a team by initiating this study.

*All staff and management were timely and well prepared for all interviews and follow-up questions during this project.

*The school district has implemented many of the SunGard-Phoenix software features and functionality.

*Certain areas (technology and facilities) are already sharing some services on an informal basis.

The study then goes on to define the personnel, compensation and functions of the town and district finance and human resources operations, the information technology departments, as well as town and school facilities management and maintenance departments.

Regarding the finance and business departments, Blum Shapiro found that “separate financial management systems between the town and school district inherently creates inefficiencies.” The study illustrates that reconciliations are required between the two organizations to account for cash transfers and receipts.

Also that communitywide information is not readily available to analyze expenditures across both organizations, and users cannot support each other because they have different software, processes and operating procedures within each organization.

The study also revealed that neither the town or school district is using its existing software to its fullest capabilities. The report goes on to examine the IT and facilities management departments, noting the collaborative work that, while generally informal, appears to be regarded as positive overall.

The report states that “this informal relationship is based on people and personalities, not on standard policies and procedures,” and “if people and/or personalities change this relationship would be at risk for change as well.”

The Blum Shapiro team recommends the town and school district implement a “Shared Services Model” using “a transitional approach to phasing into a new organizational structure” as follows:

Phase 1 – Merge School District Human Resources and Payroll with Town

Phase 2 – Merge Town Maintainers with School District

Phase 3 – Merge Town Information Technology with School District

Phase 4 – Merge School District Financial Operations with Town

Potential Savings

Outlined

The consultants state that “utilizing current employees in new structure provides institutional knowledge of both organizations; provides stabilization; and enables existing employees ability to ensure new organization is a good fit.”

As employees leave/retire, the report notes that roles may need to be realigned.

In addressing the merger of HR and payroll functions, the study states the immediate benefit would be eliminating the town’s payroll service vendor, saving about $33,000 annually. The report also notes that a “shared financial department would save approximately $400,000 to $500,000 over the next five years (assuming a transitional structure) based on the proposed structure.”

The report goes on to lay out a workflow strategy for accomplishing the phased mergers of the key departments, as well as an action plan schedule that would see policies and procedures crafted within about six months.

Work toward the merger of facilities and maintenance functions, along with the IT departments, would begin in 7 to 12 months, with the implementation of new finance office processes in 12–24 months.

The report contrasts the separate costs to keep the current systems and practices in place would be about $6.5 million over five years, including all wages, benefits and a separate financial management systems for the town and district.

Projected shared costs over a five-year period if the recommendations are implemented are projected to be about $5.6 million, generating just over half a million dollars in savings. In years 6 through 10, the savings escalate to about $910,000 per year, and include the most expensive financial system estimate for a vendor hosted “software-as-a-service” or SaaS model.

Mrs Llodra said the latest draft of the consultant report contains a lot of compromise. But referring to herself, Mr Tait, Dr Robinson and Mr Bienkowski, the first selectman said, “It’s something the four of us can embrace.

“It’s a bit of the tail wagging the dog, but without compromise there is no dog,” Mrs Llodra said.

She said the district is under no mandate, and is not required to accommodate any of the suggested efficiencies outlined by the Blum Shapiro consultants.