TOWN COUNCIL
BOARD OF FINANCE
BOARD OF EDUCATION
MINUTES
SPECIAL MEETING
JUNE 15, 2009
I. CALL TO ORDER
The meeting was called to order at 7:30 p.m. at the Avon Town Hall, in the Selectmen's Chambers, by Chairman Carlson. Town Council members present: Chairman Carlson, Mrs. Samul, Messrs. Pena, Shea and Zacchio. Board of Finance members present: Chairman Harrison, Bratton, Durdan, Speich and Hooper. Board of Education members present: Chairman Rell, Eagen, Mayer, Notestine, Evans, and Stokesbury. Also present: Superintendent of Schools Kisiel, Franzi – Director of Finance for Board of Education, and newly hired Superintendent of Schools Erwin.
Chairman Carlson reported that the purpose of this meeting is to review the findings that have been put together by the Administrative Services Study Committee along with the outside consultant.
Mr. Zacchio, Administrative Services Study Committee Chairman, introduced the Committee members: Tom Gugliotti (not present), Dr. Kisiel, Bill Stokesbury, and Philip Schenck, Jr. Mr. Zacchio also thanked the Assistant Town Manager and all department heads who worked a great amount of time in order to get this off the ground and through the many reiterations that we have been through. He introduced Alan Pennington who will be taking us through the presentation and has worked diligently with us and done a lot of traveling in order to meet our schedule. This Committee was formed by the Council after some consideration of a lot of comments that we received from the public and others about how the Town operates, operations between the Town and Board of Education specifically. This Committee was formed
to develop an RFP, go through an interviewing process with respondents, and ultimately choose a consultant firm. We would work with them in developing both the Town profile as well as what we saw as opportunities, applying both a municipal background and a business background, that we might have in front of us in either short term or long term for improvements and efficiencies in operation and process and hopefully in dollars. After going through that process, two things came out. One is that it confirmed what we had thought and many of you had thought all along is that we do have many best practices in Town, both on the municipal and education side, that we should be proud of as an operating body and that we did have some opportunities. Those opportunities are some that we have actually investigated in the past and thought about and some that we hadn’t. Mr. Pennington provided us with both a lot of short-term objectives to consider, as well as
long-term objectives that will in time prove out to be good for us. Some of those however may include discussions with our bargaining units. Some of them will include infrastructure and technology changes that will perhaps use dollars that might have to be budgeted over a period of time. Others that just need to be put in the budget that actually cost us something up front to get the benefit where they will have to be prioritized along with other items in the budget process. He further stated that the Committee has viewed this as a road map, a menu of opportunities for us to consider going forward, with whoever the Town Council, Board of Education, and Board of Finance will be, to determine what is best for the Town of Avon and the most efficient means of operating.
II. NEW BUSINESS
Mr. Pennington will take us through the presentation, followed by comments and conversation. Mr. Zacchio stated that tonight is really an opportunity for us to hear the recommendations in the format that Mr. Pennington has put together. We are not here to debate whether they are the right recommendations or to take deeper dives into each one to determine the feasibility. He cautioned that the presentation as it is today is the best kind of presentation that we could do in a short period of time. The recommendations have some dollar savings or some investment dollars by them, being called level zero estimates on a scale of zero to five. They need to go through deeper dive iterations and need to be considered by both the Council and Board of Education as we go forward. That will be really
at the end of this meeting something that the Council will have to ponder as we hopefully accept this at our July 6th meeting. The next step will be determining how we want to go about this and we have a recommendation to probably appoint a department head committee to be able to study these in more depth.
Mr. Pennington started with an introduction. Matrix Consulting Group has been pleased to work with both the Town and the schools on this effort. Everyone has been very open, shared their information, challenged us on some of our assumptions and findings, and told us that we are willing to look at anything to help us understand what some of the opportunities may be. You will see that some are easier than others. Some are not easy to implement but they’re worth considering and in longer term have a payout that is worthwhile. Matrix Consulting Group was asked to look at three administrative service areas: financial operations, facilities management, and human resources. Mr. Pennington made his presentation which is included and made part of these minutes, ‘Final Report
Presentation on the Administrative Services Study dated June 15, 2009.’
Mr. Zacchio asked the Committee for any discussion of which there was none. He asked the Council for their questions.
Chairman Carlson opened the floor for questions from the Board members.
Chairman Carlson: Most of the recommendations made are called “back office” recommendations. Did you find anything that would be a set of recommendations or a recommendation that would have a more direct impact to our citizens? Are the changes that you would recommend, in staffing levels, services offered, or anything of that nature in the various departments, where our citizens are more directly impacted?
Mr. Pennington: That is a good observation. Most of the three areas we were looking at do not provide a direct service to most citizens so you are right. Most of these are going to better utilize staff so whether we are avoiding additional staff in the future or better utilizing those in place or improving our processes or reducing cost which has a benefit in terms of tax rate. So direct service areas such as online access for employment would be a service to citizens if they were looking for a job, but most of those three areas are for the most part “back office” recommendations and not the ones providing the day-to-day services to the public.
Mr. Zacchio: We did during the process try to stay away from lowering the level of services that we provide today for two reasons. One as a best practice we provide a good level of service across the board and our employees throughout the survey tended to be motivated by that they’re providing a good service. We did not want to take away and lower services to the community. We really tried to continually look at it through the lens of, what kind of foundational changes can we make now that make the most sense that are practical but also put us into a foundation that will be cost avoidance for the future that we build a best practice now that as the Town grows and we reach and approach more of a build out and obviously our system grows with that that we can be in a better position to not
continue to add stacks of books to the table instead we’d be able to grow at a less proportionate rate to the growth of the Town.
Mr. Stokesbury: The custodial issue was one of our hot topics that we spent significant part of several meetings discussing. Thinks it is important tonight, before Dr. Kisiel retires at the end of the month, that perhaps he and Mr. Franzi provide a little background as to our own experience because we have raised issues both from a macro-safety issue and another from past experience. He would like them to speak to what we’ve done in the past, what has worked, is working, and what has not to make it clear that we’ve tried that and see where it can go from here.
Dr. Kisiel: On two separate occasions in the past three years, we have attempted to bring in to prioritize the services at least one of our buildings at different times on a pilot basis to explore the possibility that’s been raised in the report. In these two separate occasions using two different companies we found that the performance level was far less than what we expected, the staff turnover was incredibly high such that people had a hard time figuring out what they were doing from day-to-day, and there was evidence in both cases of theft that occurred. We felt that under these two circumstances, there is a lack of control.
Mr. Franzi: After we conducted feasibility we did run quantification on the savings in those areas and came within the range that Mr. Pennington identified in his study. The plan was to keep the day staff on, but in the night staff to have a supervising Avon Board of Education custodian there. In testing it as a pilot in the Avon Middle School, we worked through that process but again there were problems that Dr. Kisiel had indicated. The other point is that we had tried that one time and the company failed and secondly on their replacement of resource with the second company we found that we’re getting individuals showing up or it was different people every night so they weren’t assigned consistent duties. What we had talked about is an interim process through this and trying to save
cost to the Board of Education. After talking to the Facilities Director, as positions become available when there’s turnover that in the night shift we begin to hire out on a temporary custodians but employed by the Avon Board of Education so it still maintains that sense of control but bringing them in at a specific lower rate than what’s anticipated in the collective bargaining group but also not having to provide the benefit component as that’s where the meat of the savings is. This was started at the Avon High School at night and also a little bit at the Avon Middle School so hopefully it will bring our numbers down. It’s probably a middle of the road approach as a contrary to total or partial privatization only because of the resource and availability of the product resource that we received. We’re attempting to move forward with that.
Dr. Kisiel: I want to raise, from a privatization point of view, that as a Superintendent in two separate school districts I’ve been involved with the complete privatization of all services, maintenance and custodial. Within two years, both Boards of Education chose to go back to the traditional employment of custodian maintenance personnel because there was a heavy investment of equipment and the service level provided by the staff just wanted there despite that the fact that we were involved in hiring the supervisor for the custodian maintenance personnel, the supervisors themselves were the biggest part of the problem. Overall the performance went down and insisted that both Boards go back to the former organization structure that we had in the district.
Mr. Franzi: Three years ago we had reached a collective bargaining issue but there were certain Boards rights and responsibilities that were in the custodian maintenance collective bargaining agreement. We worked in a level of understanding with the union which they signed carte blanche to allow us to go out and look at this different opportunity because of the availability of resource in the open market which will now be integrated as part of the formal contract with the collective bargaining unit so that right and freedom of negotiation or trying other opportunities.
Chairman Carlson: A comment was made regarding Human Resources and potential sharing of a Human Resources person. We should be looking at a new world that we’ll see more shared services between the Town. That’s a good example, where you have one Human Resources Director or one Purchasing Director over the full Town. Not saying that the person reports to the Superintendent or the Town Manager, that’s to be decided. There are many organizations that have one thousand plus employees yet all my service is provided to me under a service level agreement by a colleague. I have an overall responsibility for the delivery of the services but the actual services are being delivered by someone else. Those types of agreements can be hammered out in business everyday.
When I think of Purchasing, I think of IT services, HR services, and others. It’s a way for us to get expertise in areas without having to both have people and provide a high level of service to various constituent groups. As we go forward, it is something to look at much more carefully and should be part of what we walk away from.
Mrs. Samul: I was looking at a summary sent to us prior to the meeting as opposed to the power point presentation so it might not follow the order in which you spoke tonight but a number of those items in the summary pertained to accounting types of things, i.e. signing off before bills are paid, doing things electronically, and purchase orders. If we have a purchase order, we know what funds are committed against our budget before the bills are actually paid. Is this something that you might suggest we talk to our Accountant about to see what recommendations they might have?
Mr. Pennington: With regards to purchase orders, we have to have the upgrade to the current system in order to make your current software enable you to do that. On the HR side, the current ADMINS software does not really have a functioning HR module; the upgrade one will. Those will provide the ability for your staff to do a lot of the things they want to do.
Mr. Shea: In the past five years, how many municipalities, ten to twenty-five thousand people in the Northeast, how many have you worked with?
Mr. Pennington: In the past five years, probably eighty to ninety.
Mr. Shea: Let’s assume a fairly good percentage were well run, after the implementation of some types of recommendations that you have here in your follow-up to see how they were doing how did you see the different cultural changes working? Mr. Franzi and Dr. Kisiel spoke to one of the concerns that the Council has expressed before as you privatize you have a maintenance committee that goes on every year because everyone is concerned about the maintenance of the schools. Now we’re going to be outsourcing that and that’s a real concern.
Mr. Pennington: One of the things about this study is its uniqueness. We typically do not have at the table sitting with us two different organizations.
Mr. Shea: Of those eighty or ninety municipalities of ten to twenty-five thousand people, you don’t have the Superintendent and Town Manager or Mayor and Superintendent there?
Mr. Pennington: They are usually a town or departmental or citywide study.
Mr. Shea: How many of those eighty or ninety municipalities are done like this?
Mr. Pennington: It would be a much smaller percentage, maybe ten.
Mr. Shea: You did ten in the past five years. Culturally, how did the implementation of some of these suggestions go, in the Northeast?
Mr. Pennington: The tougher ones are where the organization feels that they’re losing control or lost control of a core function of theirs where their organization aren’t able to get past the “I still control it, but I’m controlling it in a different manner” approach. Who actually has control of it is the bigger issue for those shared services.
Mr. Shea: We’ll get beyond that. Of those ten, in the past five years, culturally speaking as you looked back how many of those suggestions that you made were implemented two or three years later?
Mr. Pennington: Typically in a study like this, maybe around seventy to seventy-five percent. Other studies that are single departments or one organization are much higher. You have more difficult dynamics when you’re talking about two different elect groups that are responsible for large organizations trying to figure things out. The thing that you have going for you that many other clients have not is you’ve already started some positive efforts, you have some history and success to look back on, and you also had everybody at the table at the same time who participated in this.
Mr. Shea: Professionally speaking, you feel confident that sixty to seventy percent of these recommendations should work based on your experience three to five years from now.
Mr. Pennington: Yes, absolutely.
Chairman Carlson: When you talked about the Human Resources module that is part of the ADMINS system that was already part of a budget casualty. We’re going to have to spend some money and it’s either going to be a net increase to the budget or somehow make a case to the townspeople that the payback is “x.”
Mr. Shea: At the Town Council meetings prior to hiring Matrix we discussed every fact; we may have to spend money to save money long term.
Mr. Zacchio: We’ve already begun to initiate the process that we approve check disbursements is already in flight. This Council passed the revised purchasing policy that can be utilized by the Board of Education and that’s the start of the consolidation of the purchasing process. We’re in the throws of getting a terminal setup to be able to access the financial system. Some of the items that were low cost or no cost, either we were in the throws of developing a cooperative arrangement already or we’ve been able to initiate as we move forward. To Mr. Pennington’s point, the ones that are more brand and scale are going to be the ones that cost us from an infrastructure stand point and will have to stand on its own merits within the budget process or ones that may
be culturally difficult for us to let go some of the power in a more cooperative effort to build a foundation that puts us in a position to grow at a disproportionate rate staffing wise to the Town’s rate of growth in the future which gets us to where we’re more efficient.
Mr. Shea: We’re in an environment of change and as an organization change with the times and try to do what we can with the taxpayers. We also have to look at it through a different lens which is the service part.
Mr. Stokesbury: The Committee and Mr. Pennington individually faced one challenge which may be different in the State of Connecticut versus other states which is the Board of Education has a state mandate to control our own budget and spending whereas other locales it’s an integrated function within the municipality. That’s one of the challenges that we have as we look at the financial consolidation is maintaining that mandated control that the Board of Education must have on our own spending while looking to save money through consolidation.
Mr. Zacchio: The Board of Education has gone down the path before of doing some of the outsourcing models and they haven’t had a lot of success with it. Although having some limited success with the pilot that Mr. Franzi spoke to but that doesn’t mean that we shouldn’t be continuing to look at those opportunities. That industry has grown and changed. The Town has a lot of success with the outsourcing of the custodial model, but we might be able to learn from those experiences and hoping that the industry has matured somewhat since the last time we’ve tried and we have those opportunities. That’s really what these recommendations are about. They are opportunities for us to use as we move forward as an organization to be at best practice. Some may work
or not, but the point of this study was to give us an outside view and lens that other communities are doing that they have found limited or some success with for us to consider.
Chairman Carlson: I don’t think there’s an advocating position here on the Town, for example, for taking control of how you spend your money. I think the question is what’s the underlying mechanism for processing payments and cash flow, and all of those things? Is there a potential savings if it’s done in a different way? It’s the consolidation of the processes not the consolidation of the decision making.
Chairman Carlson: Have you done ROI work on any of these suggestions or recommendations? Is that the next step that you’re envisioning?
Mr. Pennington: No, we have not.
Mr. Zacchio: Yes, the next steps will be for us to determine how we think it should perceive forward. I think the recommendation of the committee was that either all or in part of our Committee continues on some kind of steering committee level basis. But that we can appoint a committee of department heads that can do a deeper dive study in an ROI on specific items that we can choose to do. Don’t get too excited about the numbers they could be less or more both in the cost and the savings based on how much work it takes in order to get the right structure in place. How many opportunities for RFP we have if we were to go out on a custodial contract to see where that would come. They’re more of a road map than a list of possibilities as Mr. Gugliotti kept saying during the
meeting than they are a mandate and a concrete base for us to say that’s the one we want to do and we should save that. We did find that most of the things we did were of best practice among other communities as well.
Mr. Pena: Regarding timeframe, were most of them implemented in the shorter end or higher end, two to three or was it higher than five years?
Mr. Pennington: I think a study like this with the types of recommendations, there’s a group of them that you could probably do in the next twelve to eighteen months. There’s another group that is probably going to be a three to five year period to get that position. For example, you have to decide is it worth going to one system? Are both sides committed to finding a system that can and the only way to really switch, you have to put your requirements down on paper, go out for an RFP, and see if what’s out there is better than what we have? Those are the type of things that you can’t do short-term.
Mr. Pena: On the longer length, is it for financial reasons that the Town decided not to move forward?
Mr. Pennington: It could be the upfront financial condition, especially in the last twelve months, the work we have been doing has changed from people hiring us to say, tell us how to be the best of the best to tell us how to better use what we have or reduce costs or find ways to share services. Right now, every dollar spent is typically meaning a cut somewhere else so it’s much harder to find funds for that longer term investment. So it may lengthen the time it takes you to look at some of these issues. Some of the other ones just take more time to get things in place in order to do that or they have to do a major RFP or whether you have to deal with some other internal things before you can make another change. One of the reasons the committee asked me to do the different charts at
the back of the report that makes all the recommendations up by priority, cost, savings, and timing. We tried to give some logical timeframe for how to sequence some of these things. Some things have to happen before others and others stand on their own. You have a group that are real short term and a group that are longer term.
Mr. Franzi: Regarding technology initiatives, Mr. Pennington listed out looking at a common platform of software and look at the cost or the cost prohibitiveness at some of the dollars and then the upgrade to ADMINS. If ADMINS did receive an upgrade onto the level of the windows based and we’re a Microsoft platform over there, there may be some integration synergies that can be developed through that rather than going out.
Mr. Schenck: The Town is going to be going through some major changes in the next twelve months. You’re going to have a new Superintendent and a new Town Manager. It’s going to take time for both of those individuals to get their feet on the ground and I think that needs to be calculated into any scheduling that you’re doing. You don’t want to jump too quickly at that level and then have issues to start to develop. In some cases, if you’re going to empower the department heads, you have to give them some hope that it’s going to be implemented too. As we’ve all pointed some of these implementation steps cost money and we know what we’ve been through this past year and we know how it’s been the last few years. There is going to have to
be some real strategy look at how these implementation programs are resourced either by financially or by staff. We’re cutting staff now and cutting budgets so the approach to move into these has to be thought out at various levels - board, top management, as well as departmental. Caution in terms of prioritization and moving ahead with certain aspects as Mr. Zacchio has pointed out, we have moved ahead on a number of the relatively quick ones that we can do. This effort started in the winter and now almost in summer, so some of these things as they’ve appeared have already started to change. Those are my thoughts on implementation going forward.
Mr. Pennington: Some clients have tried to take on the list of approaches, where they have realized some cost savings from implementation, they say if we have savings from implementing something, we’re going to take at least a portion of that and put it into one of the other recommendations to fund that. Sometimes taking that view also helps people understand that while we’re spending we’re countering that added cost by other savings we’ve made.
Chairman Carlson: We have to go through, as we prioritize these, as a joint committee and put together a return on investment on the various recommendations. If we are going to be turning to the Board of Finance and then the citizens and talking about spending money that is an “add” to the budget, with a new line item in essence, we want to be able to say, “Here is the return on investment on that.” That is going to be very necessary in next year’s budget season.
Chairman Carlson: Do you have a set of recommendations as to how we go forward from here?
Mr. Zacchio: We didn’t have a set of recommendations. As we’ve had that discussion and assuming that the Council accepts the report, it would be to appoint a department head level committee in order to do some deeper dives and to your point come up with an ROI figure if possible to give recommendation to the Board of Education and/or the Council as to which ones might be done on a priority basis within a period of time. It really is at the Council’s decision level now as to how to move forward and I’ll look for your input at the meeting and how you think we should move forward. Now we have a set of recommendations, we’ve established a road map that we can look at and say we’d like to do this or we don’t necessarily think we can do that, or to Phil’s
point we don’t want to bite up more than we can chew in this first year and the timing around it. If there’s one that we feel is the one we’d like to go after we can appoint a committee to do that; rather than come back with a number that we say is that one that we want to invest our capital in. Is it one that we can give to the citizens of Avon and this is an important aspect of our government and we need to invest in it and it’s going to give us a return over five years?
Mr. Stokesbury: Either tonight or at the next Council meeting, I’d like to make sure that we replace Dr. Kisiel with Mr. Erwin, incoming Superintendent of Schools, as a member of the Administrative Services Study Committee.
Mr. Notestine: He thanked the Committee and Mr. Pennington for doing an excellent job, a lot of work in a relatively short period of time. Given that a large proportion of our collective budget is for personnel costs and the vast majority is based on dealing with collective bargaining units, I was intrigued by your Human Resources recommendation on slide #10, “Joint planning efforts between the Town of Avon and the Board of Education regarding collective bargaining strategies/approaches” and wondered if you could elaborate on that.
Mr. Pennington: That recommendation came from discussion we had about potential obstacles and to take some of these issues or cooperative efforts to a higher level down the road. It was making sure that we’re practical like we have done the joint healthcare bidding, a very successful endeavor. Making sure that wherever benefit programs can be managed jointly or working requirements can be mirrored in each of those organizations it either has a benefit to both sides or removes an impediment to future cooperation in some area.
Mr. Goldsholl: It’s going to be extremely important to quickly get information out to show action is taking place precisely and quickly off the recommendations. There is a fair amount of citizens out there that anything is going to be done from what I’ve seen. The quicker the timeline is issued with commitments and accountabilities throughout the boards and the department heads to say who’s actually going to be held accountable to do what and by when goes a long way to the credibility of the initial expense.
Chairman Carlson: We’ve already implemented certain things. Perhaps in an incoming newsletter we can delineate some of those items and talk about next steps.
Ms. Stahl: In terms of announcing this to the public that the expense, the ROI will be forthcoming. I’m interested in drilling deeper. When you get to department heads, they really know where the savings are. Over the years I’ve had several discussions with the Town Manager about the public sector, where department heads come up with recommendations for cost savings. This is a wonderful overview of infrastructure, but to the average citizen you do have to drill down and really look for some cost savings and nobody knows that better than your department heads. Normally it just isn’t done in the public sector and those of us who work in the private sector know that it’s done all the time. But there hasn’t been any incentive.
Ms. Carney: As one of the citizens who initially pushed for this study, I really appreciate everyone’s cooperation in getting this done. It’s great for the Town to see that all the boards were immutable to this and they’re really trying to look for cost savings and make things better for the Town, so thank you.
Mr. Zacchio: We had fantastic participation from our department heads on both sides. There was a lot of enthusiasm around the betterment of the process and cooperative efforts. We’ve shown it as a Town in the last couple of years as being more collaborative. The department heads know where there are some savings to be done and we’re going to empower them to help us get there and it’s a good first step.
Chairman Carlson: When I chaired the Maintenance subcommittee a few years ago, the Committee was formed, we came up with a set of recommendations, and the department heads would meet on a monthly basis.
Town Manager: That Committee has been put on hold for the last five months since we got this study done. But that was another alternative and a model focused on facilities and maintenance only.
Chairman Carlson: After the Committee disbanded, the department heads continued to meet which is the model that I see going forward here. Second point, we did this at citizens’ request and suggestions. Some of us believe that this is a very well run Town with a lot of cooperation through the various boards. This served as an “audit” of that. We should run regular “audits” by an outside set of eyes on a regular basis that takes a look at this. Organizations do go through various stages of evolution and they need to be looked at. It has been a good start to this process and we commend the Committee and our consulting firm, thank you. The next step is that we vote to accept this report at our July 6th meeting and we come up with a set of
recommendations from there in terms of how we go forward with this, a methodology.
III. OTHER BUSINESS – None
IV. ADJOURN
On a motion made by Mr. Zacchio, seconded by Mr. Pena, it was voted:
RESOLVED: That the Town Council, Board of Finance, and Board of Education adjourn at 8:55 p.m.
Attest:
Caroline B. LaMonica
Clerk
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