Preparing for the New Normal

One of the most important steps in developing budget recommendations is preparing our community and our workforce for the choices and consequences. This is particularly true in our current situation where significant cuts in services and in jobs seem virtually inevitable.

In January, we began this process of preparing our community and our workforce for the difficult choices and consequences. At that time, we implemented regular budget briefings at each Board meeting to help the Board and public recognize the increase in service demand and the potential economic fallout of the recession. We also reached out to residents and other stakeholders by meeting with various community groups to discuss the potential for a significant reduction in revenues next fiscal year and the likelihood of reducing and eliminating county services. We also began meeting with employees to communicate these same expectations.

Earlier in this fiscal year (FY10), there was some real promise of meeting our revenue budget. Unfortunately, the three-month lag in receiving sales tax revenue reports from the state and the uncertainty of the retail market prevented us from having real-time data. As we entered February, the solid November sales tax figures suggested a possible positive trend. Still, we decided to plan cautiously. Therefore, even before receiving the December 2009 sales tax reports, we directed departments to identify 5% reductions from the current year’s budget. At that time, I was not anticipating the need to seek holdbacks from our appropriation to CMS, CPCC or other agencies. When the disappointing December sales tax reports arrived in March, we recognized the need to implement the 5% reductions and to seek further reductions from our various business partners including CMS and CPCC.

Although the official announcement of these reductions may have come very quickly for some people, we have been talking publicly about these cuts since early-February. Board members will recall that last February (February 20, 2009) we cut $17.4 million in County services and on March 3, 2009 the Board approved reducing our appropriation to CMS by $5 million. Therefore, the reductions this year are occurring approximately three weeks later than last year. This time difference is the result of two factors. First, we waited for the December sales tax report to confirm our concerns about sales tax revenues. We also decided to consider the 5% cuts in tandem with projected reductions for FY11 rather than having these two important decisions made in isolation.

As I have mentioned to the Board, many people are not going to be happy about the choices and consequences we face. We have said there are few, if any, good choices. The recession has delivered to our community and our workforce a “new normal” that will result in reductions to programs and services that will be permanent, as we experience stagnant or very slow growth over the next several years.

This idea of a new normal takes some getting used to in a community that has experienced virtually nothing but exceptional growth for more than a decade. Therefore, one of the responsibilities we have as community leaders is to communicate the necessity to adjust our thinking and expectations based on the reality of this new normal. On this point, I have directed County staff to continue feeding our website with information about our situation and enabling residents to engage in dialogue with us through this site. We also are continuing to reach out to residents and employees through additional meetings similar to those that began in January. Finally, more clarity about the choices and consequences will emerge as we proceed through the FY11 budget process.

Information Technology Cross-Jurisdictional Opportunities

During its Strategic Planning Conference, the Board received an update of staff discussion regarding potential consolidation or collaboration opportunities with Charlotte Mecklenburg Schools (CMS). Recently, the IT staff with the City of Charlotte, Mecklenburg County and CMS identified the following options:

  • Common Data Center Facilities-Given the high cost of constructing, equipping and maintaining data centers, County staff has been exploring other options for hosted solutions. As a result, more emphasis could be placed on building greater shared production capacity for city and/or CMS agencies at a shared facility. UNCC and CPCC are also looking for ways to expand data center capacity.
  • Shared WAN and Telecom Infrastructure-The WANs (wide area networks) currently in use by the three agencies are separate networks, largely built on metro-Ethernet connections purchased from commercial telecom suppliers. By building and sharing a common optical fiber network, long-term cost savings could result by displacing these external expenditures, while providing higher levels of data-carrying capacity to all the agencies. By converting internal telephone usage to voice-over-IP technologies, additional savings would yield through leveraging the fiber WAN infrastructure for voice calls.
  • Common Procurement Contracts-Contracts for hardware, software and services are negotiated independently between the three agencies. Although each organization has unique needs,there is potential to negotiate contracts to allow all agencies to participate and therefore leverage price breaks through increased scale. This potential could also apply to equipment leasing agreements as well as purchase agreements.
  • Help Desk and Field IT Services-Each agency provides its own help desk services. In the City and CMS, those services are partially contracted and partially maintained in-house. In the County, the help desk and field services are provided entirely in-house with low hourly costs. By examining the discrete needs and the delivery models for each agency, it may be possible to create a shared model that would reduce costs across the board.
  • Cross-Jurisdictional Staff Augmentation Services-Currently the County provides cross-agency use of GIS resources on a limited basis. Additionally, the City has made limited use of project management and business process improvement resources within the County IST project management office. Where capacity exists, greater cross-agency use of resources through memorandums of understanding could reduce overall cost rather than hiring temporary, external consultants.
  • Extended Fleet Services-Although not officially a “technology” service, there may be potential to reduce overall fleet costs by extending the current fleet maintenance agreement between the City and County to include the CMS non-bus fleet.

At its March 24, 2010 budget retreat, the Charlotte City Council will receive this information. I’ve asked County staff to let us know the outcome of these discussions, and will update you when we have received a response.

Board members who would like additional should contact IST Director Jerry Pinkard at 704-336-2891 or .

State Legislative Agenda

At its April 20meeting, the Board will receive a recommended state legislative agenda developed from staff proposals.The recommendations also are driven by legislative restrictions created by the General Assembly for the short session.Board members with potential legislative items for the short session should contact Assistant to the County Manager Brian Francis

or 704-336-2611by April 6, 2010.

--Harry L. Jones, Sr., County Manager

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