As many of you know, the Coraggio Report recommended among other things that FREDS as a department is eliminated on the assertion that contracting out would save the county money. After preliminary examination of the Report, our union believes that the assessment that lead to this is flawed, and as such we proposed to spend $5,000 to hire a consultant to research the recommendations and challenge flawed data. Tom Guiney is our consultant, and is the former head of FREDS.
Tom has finished the Fleet portion of his report, and has met with a point person in the Multnomah County Budget Office to check his methodology and be sure that the math he is using to challenge the Coraggio report is on mark. There is some additional finalizing left to do, but there is a significant difference between our numbers and the Coraggio Group’s, as to much it will cost to eliminate FREDS. We seek to prove that the difference in numbers can be attributed to subsequent flaws in the Coraggio research. One of the main findings in flawed Coraggio methodology which Tom has had so far centered on expenses involving Fleet Maintenance and Fleet Administration. If Fleet Maintenance were contracted out, the administration costs would still remain, and so the savings from contracting out the work would be reduced by the cost of continued administration by the county. Also, when adding up the savings, Coraggio assumed that the county would no longer have to pay for the buildings where the FREDS work happened. This was an incorrect assumption because unless the building gets sold, the county still has the expense of maintaining the building, etc., and they would have to spread out that expense to the other county departments. The Yeon buildings will be difficult to market, so even if all the operations there were contracted out, a big chunk of expenses remains with the county. Tom’s final numbers are not concrete at this point because there are some financial pieces he has not been able to get full confirmation on. Regardless, we believe that contracting out would result in significantly different dollar figures than Coraggio reports. Overall, Tom says the county has cooperated with him well and assisted reasonably in his research.
There have been questions coming from FREDS members about the elimination of a specific manager’s job (referred to here as Person 1), and the ramifications this will have on members of our union in FREDS who report to him. Specifically, concern has been expressed that since his position is being eliminated, the positions of all the people who report to him will be as well. This assumption is not correct. Right now, the only position that will be gone on July 1st that we are aware of is Person 1’s position; the suggested implementation date of the Coraggio recommendations has been pushed back to December by the county – and we are still trying to stop it altogether. The county has been following one of the suggestions that does make sense in the Coraggio Report, and that is cutting Management positions, i.e. “span of control” issues – the elimination of Person 1’s job isn’t an indication that all accountable to him will also be eliminated soon, but it is part of a county wide pattern of downsizing management to reduce the span of control and save money. We do expect the elimination of Person 1’s position will change the reporting structure for you. Right now the county has been discussing consolidating departments, and it is possible that there may be restructuring occurring in several areas, including FREDS. No restructuring has been finalized, but an idea of restructuring the department structure to put FREDS in a department with Facilities and I.T. has been brought up, and is a possible solution for the changes that will come with the loss of Person 1’s position.
The Multnomah Evolves Steering Committee has met twice now. The most recent meeting was on March 23rd, where main themes were span of control, and reports from the implementation groups for Central Stores and Fleet Maintenance. One thing that came up was that Person 1’s position is being eliminated, as is the position of another supervisor in Facilities. In the Fleets Maintenance work group status update we were told that the implementation team is looking at motor pool functions and will continue to examine this in future sessions. The implementation team has walked through and analyzed the Fleet Maintenance process, as well as the Coraggio data and methodology, including the shop-rate calculation (what it costs per hour to do business). The implementation team reported that they still need a clear market cost before they can make a full recommendation on implementing the cuts Coraggio Report recommends, and they said they plan to speak with staff in Fleet Maintenance about possible internal saving ideas. The implementation team aims to have enough information for a recommendation by the end of April.
The implementation group for Central Stores reported that they looked at and analyzed Central Stores processes by commodity and cost allocation methodology, as well as the data Coraggio Group used to make their recommendations to cut FREDS. The implementation group met with Clackamas County regarding strategic sourcing, to get a better understanding of the current process as well as the alternative processes being used. The next step for Central Stores is for the implementation team to brainstorm with staff for possible internal saving avenues (like they plan to do with Fleet Maintenance), and looking at effective strategy for commodities coming out of Central Stores. One topic touched on was Banfield, which is a Central Stores building that the county recently renewed a five year lease on. There is a re-evaluation of the lease now, to determine the cost of breaking that lease, or the possibility of using the building for a new purpose. The implementation team hopes to have recommendations about Central Stores to the County Chairs’ office by the end of April, and still need to talk to the state regarding family planning supplies. Similar to the situation with Fleets Maintenance, the implementation team needs to get their exact figures before they can make a recommendation.