Sunday Notes Feb 28th 2016

LS_041515_Murphy

This past week the Finance sub-committee met and reviewed the closing of the 2014/2015 Fiscal year and looked at some of the challenges this fiscal year presented including the following.

FY2016 Challenges:
• Keeping residential taxes low
• Pension Assessment dramatic increase
• Funding Schools
• $500k Increase in GL Tech Assessment

The Murphy Administration has made huge investments in public education both in dollars and has important in repairs and improvements to the school buildings including complete building and health inspections.

One thing I have been hearing in the political bubble are knocks on the current administration for not finding the savings the last administration did. While we haven’t heard of huge savings like the Ameresco project or the savings from the City joining GIC this administration as made savings.

They have achieved savings that might not make headlines but have assisted in keeping taxes reasonable, improving public safety, invested in education and school facilities and kept services steady. (though I still wish all fire companies would remain open)

I asked CFO Conor Baldwin if he would review with me items I had listed and to list some others that would show how this Administration with support of the Council, have made savings in various areas.

At the risk of being accused of carrying the water for another Manager, here is a list of savings achieved by this administration from the CFO which includes some items I knew of and others that I had not.

Gerry,

Thank you for the opportunity to discuss the City Manager’s various initiatives to make the City of Lowell’s operations more effective by actively pursuing cost-savings opportunities. Over the past two years, with the support of current and prior term’s City Councils, the Manager has been able to achieve the delicate balance between service delivery and affordability by carefully watching the $365 million annual operating budget.

The following is a detailed list of those accomplishment and their relative monetary value:

1.Vacancy review committee/ Careful review of all purchase requisitions over $2,500 – Directly responsible for the $2 million saving available at the end of FY2015 to mitigate to outstanding snow and ice deficit.

2. Capital Plan – Leveraging grant opportunities to maximize value – The FY2016 Capital Plan advanced $16.6 million in capital projects in infrastructure, public safety, and community development improvements, but only $8.9 million in tax-supported funding was needed. The City Manager saved $7.7 million by leveraging state and federal funding to invest in Lowell’s “curb appeal.”

3.Refinancing old debt – The improved credit rating of the city led to the following savings:

a.$2.6 million in savings in the Garage Enterprise Fund

b.$450,000 in savings in the General Fund

4.Retirement savings – $800,000 in savings was achieved by paying our PERAC assessment in one lump-sum, rather than quarterly installments each year. We were able to do this because of our strong cash flow. This savings have allowed us to fund several unanticipated expenses from within the existing budget, as well as move forward with some exciting new projects (Lucy Larcom Canal Lights) and pay for them with cash, rather than borrowing to fund the purchases. This provided further savings because we will not need to pay interest on the purchase.

5.Banking contract – Not only did a local bank win the contract through a competitive bidding process, but the City saved $27,000 as a result of the contract over the price of the prior 3-year contract.

6.Operational savings – Savings of over $400,000 was achieved in 2015 through clean-up work at the Christian Hill reservoir as part of the $22.8 million water infrastructure project. A private engineering firm estimated the work to cost approximately $470,000. However, by performing the work in-house by DPW employees, the city saved over $400,000 by doing the work with city employees rather than using contractors.

7. Savings achieved through collective bargaining – By removing the City Electrician from the union and making it an Ordinance employee (exempting the position from overtime) the city will save anywhere from $25,000-$40,000 a year.

8.The City Manager meets every month in LowellSTAT meetings with the finance team and senior staff to carefully review each and every department. Just recently the following has been reviewed:

a. Data shows that by monitoring overtime and sick time more regularly we have seen a decrease in expenses in these salary accounts.

b.The finance team is actively working on bidding out the purchase or everyday equipment and supplies (tires, screws) both by department and at a city wide level.

c.The finance team is continuing to develop an energy monitoring system for our $6 million in electricity/gas to look for efficiencies as well as identify errors in billing (we have found several).

d.In collaboration with the Parking Director, LowellSTAT has identified retrofit energy savings programs in the City garages – $60,000 savings per year in the Ayotte garage.

9.The newly established Grant review committee will ensure we are always applying for grants with best bang for the buck.

GN – So while you might say there isn’t 1 or 2 large item that show huge savings, there have been numerous ones that add up and allow the city to keep up services, avoid layoffs, add public safety and invest in education. No Administration is perfect but this one has shown a strong dedication to education, public safety and economic development and has achieved savings that have allowed that to happen.

There’s always a First!

Some elected Politicians and selected officials can take criticism and shrug it off, others get mad or just ignore you and a few even yell at you when given the chance.

NOT MAD

Up until recently, none have reacted like this.

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