Southeast Michigan Council of Governments

1. Southeast Michigan Council of Governments

2. Rightsizing County Government Dave Boerger November 18, 2008 Southeast Michigan Council of Governments 535 Griswold St., Suite 300 Detroit, MI 48226 www.semcog.org

3. Fiscal Challenges • Expenses for energy & healthcare up • Poor economy lower home prices • Property tax collections down • State revenue sharing flat at best • Municipal revenues shrinking • SEVs and TxVs converging

4. Gap between SEV and Taxable Value, 1999-2008 Real Property in Macomb County

5. Macomb County Housing Prices, SEV, and Taxable Value Year-Over-Year Percent Change

6. Percent Change in SEV, 2006-2008 Real Property Large Loss, -10% to -15.2% Moderate Loss, -5% to -9.9% Small Loss, 0 to -4.9% Gain, up to 3%

7. Percent Change in Taxable Value, 2006-2008 Real Property Loss, -3% to -5.9% Loss, 0 to -2.9% Gain, 0.1% to 2.9% Gain, 3% to 10.9%

8. Taxable Value As Percentage of SEV, 2008 Real Property 80% or less 80.1% to 85% 85.1% to 90% 90.1% or more

9. And it’s getting worse! • Credit crunch continuing • Stagflation – negative growth with rising costs • More auto restructuring • Further drop in housing prices • State TxV restrictions if SEVs drop • State revenue sharing losses

10. Macomb County Forecast

11. Macomb County Forecast

12. Fiscal Alternatives • Hiring/pay freezes • Layoffs • Benefit reductions • Service cuts • Tax increases • Tap fund balances • More debt • Etc, etc, etc…..

13. Fiscal Alternatives • Improve efficiencies ~3-5% and • Right-size county government ~10-20%

14. Improving Efficiency • SEMCOG AgileGov searchable database of >400 successfully implemented ideas • Self assessment tool – 25 characteristic of the best local governments • Long range financial plan • Benchmarking comparisons • Accelerating service delivery processes

15. Improving Efficiency • Performance measurement system • Low cost citizen satisfaction survey • Energy audit – 10-15% savings • e-Government approaches • Training • Private sector productivity techniques

16. RightsizingEnvision County Government 20% smaller • Collaboration • Consolidation • Privatization – managed competition • Reduced structure/management layers • Contracts renegotiated • Requoting/resourcing

17. Rightsizing - cont’dEnvision County Government 20% smaller • Sale/closure of underutilized assets • Use excess capacity to provide services to townships, cities & villages at cost • Service cuts prioritized based on citizen input • Reorganize debt esp. for infrastructure • Limit tax & fee increases • Courageous and determined leadership

18. Recommendations: • Work with Sterling Heights to implement restructuring and performance management processes

19. Sterling Heights expenses up 40% vs. CPI of 34% since 2000

22. Recommendations: • Work with Sterling Heights to implement restructuring and performance management processes • Learn from the Road Commission’s efforts with Plante & Moran and apply appropriate ideas Macomb Road Commission pays for cost-cutting auditWed Oct 29, 2008 By Charles E. Ramirez The Detroit News MOUNT CLEMENS — The Road Commission of Macomb County has hired Plante & Moran to help it further cut operational costs, officials said Tuesday.

24. Recommendations: • Work with Sterling Heights to implement restructuring and performance management processes • Learn from the Road Commission’s efforts with Plante & Moran and apply appropriate ideas • Research county benchmarks & restructuring actions elsewhere and implement appropriate ideas

25. Local Government Restructuring in New York State

27. Well Run Counties • Kent County, MI • Jefferson County, CO • King County, WA • Peoria County, IL • Sarasota County, FL

28. Recommendations: • Work with Sterling Heights to implement restructuring and performance management processes • Learn from the Road Commission’s efforts with Plante & Moran and apply appropriate ideas • Research county benchmarks & restructuring actions elsewhere and implement appropriate ideas • Actively engage citizens, businesses, staff & local communities/townships in the rightsizing process

29. Jefferson County, CO Approach

30. Jefferson County, CO Service Importance

31. Value Matrix Focus here 1st - Reduce , eliminate or privatize High Cost/Low Importance Services Focus here 3rd - Improve efficiency of High Cost/High Importance Services Focus here 2nd – Reduce or eliminate Low Cost/Low Importance Services Focus here 4th – speed delivery of Low Cost/High Importance Services Program Cost Prioritized Importance

32. Recommendations: • Work with Sterling Heights to implement restructuring and performance management processes • Learn from the Road Commission’s efforts with Plante & Moran and apply appropriate ideas • Research county benchmarks & restructuring actions elsewhere and implement appropriate ideas • Actively engage citizens, businesses, staff & local communities/townships in the rightsizing process • Develop & implement a 3 year financial plan identifying $100m of rightsizing actions ($20m contingency)

33. For additional help or more information contact: Dave Boerger SEMCOG boerger@semcog.org 248-875-7120 Southeast Michigan Council of Governments 535 Griswold St., Suite 300 Detroit, MI 48226 www.semcog.org

34. Southeast Michigan Council of Governments