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Case Study: City of Saginaw Shows How Strategic Reviews Can Work
By Christine Andrysiak & David Asker
Location: Eastern Michigan
Recently, the city of Saginaw conducted an assessment of city-wide efficiency and effectiveness, strategic organizational restructuring, and proactive cost-reduction opportunities. The city had just conducted a five-year financial forecast and realized their fiscal position going forward was concerning. The need to garner objective, outside advice became obvious. According to City Manager Darnell Earley, “As managers look for ways to retool their operations while maintaining consistently effective and efficient service delivery systems, objective and independent organizational reviews can provide a valuable blueprint for retrenching operations. Working with Plante & Moran, we developed such a blueprint for Saginaw, which considered our financial, operational, technical, and facility needs now and in the future.”
It’s worth noting that many city personnel were involved in the process. Earley initiated the request, obtained approval from city council, and oversaw the process. Department heads and staff were available for interviews and feedback. Even the union leaders got involved; Plante & Moran solicited their confidential input and gave them a number to call to voice their feedback.
Saginaw’s operational review provided recommendations in five key areas:
The city identified up to $3 million in annual-recurring cost savings in the initial review, and implemented $1.2 million in savings in the first year. The resulting return on investment was more than 12 times the cost of the study in year one. This does not take into consideration the recurring savings each year, which would greatly increase the return on investment.
“Through this approach we’ve avoided budget deficits and having to decimate departments with across-the-board percentage cuts in order to balance our budget. It was an excellent starting point for us. The small investment will pay huge dividends in the long-term as we continue to search for the surest and most cost-effective forms of economic and community service delivery and sustainability.”
Special Note on Police and Fire
Due to the high cost of providing police and fire services, Saginaw is exploring the possibility of combining police and fire into a public safety department. The organization review showed that the two departments acting independently are not sustainable given the high cost of operation and other issues such as retirement costs. Failing to take action now will only delay the inevitable. The city is starting slowly, doing as much research as possible; their initial step was to create a public safety manager position—someone on staff whose main responsibility is to oversee the exploration of combining the two departments. “We are continuing to downsize our operations in a proactive rather than reactive manner, and recognizing the need for change if these services are to be sustained over the long term” says Earley.
Strategic organizational reviews are an effective tool to help organizations transform into leaner local government units that are well positioned for economic growth and prosperity for the 21st century. It’s a visionary, progressive, proactive step, and one of the best ways we’ve found to help organizations respond to today’s new economic reality.
Roseville, St. Clair Shores, Eastpointe Consider Central 911 Dispatch
Ten years ago, the communities within Livingston County combined to form one central county 911 dispatch. Today the communities are enjoying the benefits of cost savings, faster response time, top-notch dispatchers, and a state-of-the-art facility.
Three local communities are looking to join the pursuit of consolidated dispatch services. Roseville, St. Clair Shores, and Eastpointe are considering a turn-key, central dispatch operation that, if approved, could start in early 2011. They have been proactive in southeast Michigan by embracing the concept of consolidated dispatch operations for increased efficiency and cost effectiveness. They were even awarded a $1 million grant to implement this progressive concept!
Consolidation can be a highly controversial topic. The fact remains, however, that it can work. Communities can combine their efforts and provide improved service at 20–40 percent less than they were spending while operating alone. Because of these successes, it’s an idea that should, over time, elicit greater adoption in this difficult economy.
Christine Andrysiak is a consulting manager at Plante & Moran. You may reach her at
David Asker is vice president at CRESA, Plante & Moran’s real estate division. You may reach him at 248-223-3413 or firstname.lastname@example.org.