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Wake Up Call

At this point you should have a pretty good feel for your first quarter.  The good thing is you can make course corrections right now that will have a positive impact for the rest of this year.

Last year at this time I was putting together a plan for cost containment.  We had to reduce overhead by a minimum of 30 percent and that meant terminations, modification of work week and cut in salaries across the board.  Not a pretty picture but something necessary for all businesses and government.

Government is facing the worst picture I have seen in decades.  Falling property values will force local government to either raid rainy day funds or change the way they are doing business.  A recent report from The Broward Workshop tells the rest of the story.

Last week, Hank Fishkind, Fishkind & Associates, released his findings from a study on government efficiency commissioned by The Broward Workshop.  Click here to view findings. The bottom line is that there are plenty of areas local government can economize either by improving delivery or outsourcing.

Most surprising to me was that salaries and total compensation of governmental employees were at rates much higher than private business in Broward County.  According to the study, the average total compensation for a governmental employee was nearly double that of the average private sector employee--$91,394 versus $54,439.

Not surprisingly, the final bell is ringing for unfunded pension liabilities in the public sector.  Fishkind reported that unfunded pension liabilities are in excess of $1 billion.  Add to that the fact that public employees’ health insurance is double that of their private sector counterpart and the story is clear—time to live within your means.

The City of Weston represents a study in efficiency as it outsources most of its services to the private sector.  City Manager John Flint suggested that most local government could mitigate expenses by partnering with private industry.  It remains to be seen if most of our 31 cities in Broward County have had the wake up call.

Sincerely,

Dan Lindblade, CAE
President/CEO

Posted by: Dan Lindblade @ 2:16:33 pm  Comments (0)
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