Report Oulines Possible $350,000 In Savings To City And Oskaloosa Water
Oskaloosa, Iowa – Figuring out the best way to serve the people of Oskaloosa was the reason the Oskaloosa City Council and the Oskaloosa Water Board held a joint session Tuesday evening.
The purpose was to review possible cost sharing ideas between the two entities in an effort to be more efficient and then, in turn, possibly save the people of Oskaloosa money.
Randall Bauer spoke before the joint session outlining areas the consulting firm , The PFM Group, had identified as possible areas of cooperation or shared services.
The first of the nine items identified was to enhance communication between the city and the water department. “While there will be some additional time spent by the General Manager of OMWD and the City Manager to implement this recommendation, the efforts will not go beyond the scope of current job duties or create significant or quantifiable cost burdens to the City or OMWD.”
The second item identified was to formalize and standardize joint budgeting, reporting and planning. “For example, coordinating and standardizing these budgeting, reporting and planning processes will involve a significant amount of time from the City Manager and City Clerk as they work with the OMWD Board of Trustees and General Manager to educate them on the process and policies that are currently in place at the City.”
Recommendation 3 is to enhance the convenience of paying water bills and other city fees and permits. “There would have to be a broader discussion between OMWD and the City to determine the best approach for addressing these customer convenience initiative before a definitive costing analysis can be completed.”
Recommendation 4 looks at exploring Joint Purchasing Opportunities. The amount of savings is unknown at this point because both entities purchase separately. “In an effort to address these opportunities, the City and OMWD should work to develop comprehensive inventory sheets that can be shared and discussed with the City Manager, Director of Public Works and OMWD General Manager to identify assets and inventory where there may be opportunities to purchase in bulk or larger quantities to reduce the cost per unit price of these items that are currently being procured separately.”
Recommendation 5 explored opportunities for sharing software licensing, servers and other technology. The report outlines that the City and OMWD currently use the same payroll and financial system vendor. “If the City were to absorb just the payroll back office functions the OMWD would no longer need to pay the costs of any future payroll module upgrade of approximately $12,000, just to run payroll for eleven employees.”
“The Oskaloosa Municipal Water Department has looked to secure an independent web designer to update and modernize their website… The City should immediately approach the OMWD and determine if there can be an agreement worked out that could be beneficial for both organizations if OMWD were to contract with the City at a much lower cost than an outside web designer.”
Recommendation 6 looks into opportunities for equipment sharing and joint contracting ventures. “As identified in the report, the savings related to a number of duplicative equipment purchases in the next five years could save the City and OMWD collectively up to $75,000, according to separate CIP documents and cost estimates as provided in the course of this shared services study.”
Recommendation 7 looks for opportunities to centralize back office functions. “This is one of two recommendations where the project team believes OMWD and ratepayers have a real opportunity to realize significant savings… the OMWD has the potential to save at least $80,000 annually if they were to eliminate the Office Manager position at the Water Department. This savings potential may provide the City with the opportunity to centralize the billing and administrative functions (such as employee benefit and payroll administration, human resources, general administrative and accounting duties) related to billing for water, waste water and storm water.”
“If the OMWD were to also eliminate the Utility Billing Clerk position through such a transition of centralizing these utility billing and other back office duties or attrition, the OMWD could be in a position to collectively save $150,000 on annual payroll costs.
Recommendation 8 looked for opportunities to cross train water and waste water operators. “Coupled with recommendation 7, this recommendation has the potential to save OMWD and the City a significant amount of annual personnel costs as it is likely that the City and OMWD could each eliminate one plant operator if they were to cross-train OMWD and the City’s Waste Water operators to operate and be fully licensed so that they can rotate between the two operations.”
“The OMWD may have an opportunity to conservatively save over $80,000 in annual personnel costs through the elimination of each plant operator position phased out through cross training water and waste water operators in OMWD and the City.”
“In addition, the City may have an opportunity to conservatively save over $62,000 in annual personnel costs for each waste water operator position phased out through cross training.”
If the above cost sharing opportunities were explored, the ratepayers and taxpayers could potentially see a conservatively set $350,000 in savings between the two entities.
The final recommendation of assessing privatization opportunities was rejected by both the city council and the water board.
The first eight recommendations are being explored openly by both entities, and that Oskaloosa City Manager and OMWB General Manager Chad Coon would discuss the recommendations. Both will then report on the opportunities available in approximately one month to another joint session.