Memorandum

City of Lawrence

City Manager’s Office

DATE:	May 30, 2013
TO:	David L. Corliss, City Manager
FROM:	Casey Toomay, Budget Manager
CC:	Cynthia Wagner, Assistant City Manager Diane Stoddard, Assistant City Manager Jonathan Douglass, Assistant to the City Manager / City Clerk
RE:	Background Budget Information- Recent Cost Control Efforts

Pursuant to your request, a summary of recent efforts to reduce costs and control expenditures is provided below. 

Costs Related to Personnel

Costs related to personnel continue to be one of the largest City expenses.  Efforts to control these costs include reduction of non-public safety positions, changes to our healthcare plan, implementation of a new overtime policy and time and attendance software.

Reduction of Non-Public Safety Positions.   Since 2008, the City has reduced non-public safety positions in the general fund by 23 positions, or 14%, including:

· Elimination of three positions, including a department director by transferring responsibilities of the Human Relations Department to a division of the Legal Department;

• Elimination of a department director position through consolidating the Administrative Services Department with the City Manager’s office;
• Elimination a department director position through consolidating the Planning Department with the Neighborhood Resources Department into the Planning and Development services Department;
• Elimination of a Planner II position and two Zoning Enforcement Officer positions;
• Elimination of a Management Analyst position in the Finance Department;
• Elimination of two positions in the Information Systems Department;
• Elimination of a Municipal Court Clerk position;
• Elimination of nine parks maintenance positions; and,
• Elimination of two positions from Public Works.

Employee Healthcare Costs.   The City has made efforts to control the rising cost of providing employee healthcare.  In 2012, the City’s healthcare plan transitioned to a Health Reimbursement Account (HRA), introducing the concept of consumerism to our plan. Allowing for first dollar coverage and the ability to roll over unused funds empowers members to make educated decisions about their healthcare services (i.e. going to emergency room or going to an urgent care center/walk in clinic). The WellCare clinic was also implemented as a tool to reduce claim expenses and reduce risk factors for chronic conditions in our plan members.

New Overtime Policy. In 2011, the City Commission directed changes to the City's overtime policy, aimed at reducing overtime costs in non-emergency situations. 

Time and Attendance Software.  The City implemented time and attendance software in order to better track hours worked and eliminate the need for paper timesheets. 

Non-Personnel Costs 

Efforts to control costs in contractual services, commodities, and capital outlay are summarized below.

Energy Management.  One of the largest non-personnel related expenses for the City is electricity.  The City’s Sustainability Coordinator has worked with departments on a number of energy saving projects and initiatives. The City implemented EnergryCap software which has allowed staff to better track energy use (natural gas, electricity, water, solid waste, and fuels) and plan efficiency projects.  Since 2007, the City has reduced energy usage significantly.  Westar continues to project rate increases for City electricity bills so energy reduction efforts remain a high priority.  The Public Works Department has replaced all traffic signals in the City with higher efficiency LED signals, which should also help reduce costs.  In addition, lighting retrofits have been complete at several city facilities as have a number of energy audits.  Temperatures in city buildings have been reduced to save on heating costs.  Parks and Recreation has installed energy-saving fans at the Aquatic Center. 

Consolidation of Contracts.  Staff has worked to consolidate a number of contracts for services in order to get better pricing.  City departments with mowing responsibilities or contracts worked together to coordinate bidding of contractual mowing services in 2010.  The City of Lawrence and Douglas County Departments of Public Works consolidated elevator maintenance contracts in 2011.  City janitorial services contracts were consolidated in 2012.  

Review of Fuel Purchasing.  Staff in the maintenance garage purchases the bulk of fuel for the fleet, including fuel at the Wakarusa and street maintenance facilities where most general use, public safety, and public works vehicles refuel. Fuel is purchased by the tanker load, with loads delivered about every two weeks. Each load is bid in order to obtain the best pricing available at the time of order. Staff monitors consumption levels and it has been determined that, at this point, we have not yet reached the volume to do more fuel hedging to obtain even lower fuel prices. Purchase of fuel for some smaller tanks (Eagle Bend, park districts) has been bid separately in order to attain better pricing for the smaller quantities.

Reduction of Take-Home Fleet.  Since 2006, the number of vehicles in the city fleet identified for take home use by employees has been reduced from 61 to 21, thus also reducing fuel and associated liability costs.

Parks and Recreation 947 New Hampshire Offices.  Parks and Recreation relocated their administrative offices to South Park in 2012, thus saving the cost of the lease, which is $175,000 per year.