Ulster gets down to business - Westfair Communications

In the past year and a half, there has been a quiet revolution of sorts occurring in the way Ulster County administers its business. Departments have been consolidated; the health insurance plan for county employees has been revamped, lowering the county”™s premiums; redundancies in staffing have been eliminated, without any actual layoffs occurring; and municipalities have coordinated their efforts to meet certain federal mandates with less cost. For the first time in the county”™s history, spending actually decreased in this year”™s budget ”“ and it happened without cuts to essential services.

That”™s an enormous turnaround from the crisis the county found itself in two years ago, when a ballooning budget led to property tax increases of almost 39 percent ”“ the highest in the state. A chief culprit was the $40 million in cost overrides for the construction of the new county jail. That disaster caused a change in leadership at the Legislature, which subsequently appointed Michael Hein as the new county administrator. Down the hall from Hein”™s office in the “glass menagerie,” as the modernistic county office building is wryly referred to, investigative hearings on the jail by a special committee of the Legislature are under way.

Two-thirds through his two-year term, Hein”™s wizardry has resulted in more reforms than happened over the preceding 20 years. An Ulster County native who is a former businessman and banker, Hein would argue that what he”™s accomplished isn”™t magic at all ”“ just the application of sound business principles to a government that for decades had been run like a mom-and-pop shop, with little accountability.

Hein and his staff of seven oversee an annual budget of $315 million and a county work force of approximately 2,000. “We bring a team approach to the administration,” Hein said. “We”™ve been knocking down walls among multiple departments.” One of Hein”™s first moves was to hire a forensic independent auditor to look at the county”™s departments. That initiative resulted in an investigation by the state attorney general”™s office of the former environmental management agency. The AG”™s office has alleged that at least one of the county vendors paid millions of dollars in kickbacks to staff members.

To rebuild the department, a special committee of the Legislature was appointed to research the best practices around the state. Hence the new environmental department will be “a model of coordination,” Hein said. It will work closely with eight other departments ”“ including health, building and grounds, and planning ”“ to avoid duplication of services and report directly to the county administrator. Hein said the new entity has been embraced by both environmentalists and financial experts as being both a good steward of the environment and fiscally efficient.

Hein”™s strategic approach has resulted in a number of other efficiencies:

”¢ Consolidation of departments. Buildings and grounds, the Department of Highways, and the public works administration have been consolidated into the Department of Public Works. Likewise, the Department of Alternate Sentencing, Probation and Community Corrections have been combined under the Probation Department. Collectively, the consolidations have saved the county more than $1 million, said Hein.

”¢ Reduction in health-care costs. The deductibles under county employees”™ health-care plan were increased and the extra money was used to create a pool to help assist them in their co-payments. This lowered the county”™s health insurance premiums, saving $2.8 million. “The savings were so substantial with the reduced premiums that we could take a portion of the savings to offset the increases in the co-payments,” Hein said.

”¢ Elimination of redundant jobs. Jobs that were found to be redundant have been eliminated. All the laid-off employees, however, were transitioned into other county jobs, in some cases with the help of extra training. For example, Hein said a single mom who lost her job as a cleaner due to overstaffing was subsequently hired as a county bus driver. Not only does she make more money and have better hours under the new job ”“previously, she worked the night shift ”“ but because the bus job is 90 percent funded by the state and federal governments, the county saves money on the new position.

”¢ Relocation of offices to save on costs. The Office of Aging used to be located on Schwenk Drive. This was an inconvenience for seniors arriving by city bus, which stopped at Hannover”™s, requiring them to walk a considerable distance across the shopping plaza and up a hill. If it turned out the service they needed was actually under a different department, such as Social Services, they”™d have to ride across town to another building and pass through a metal detector. Hein”™s office solved the problem by moving the Office of Aging to the same building as Social Services. A separate entrance was created for seniors enabling them to bypass the metal detector. Doing this has resulted in a savings of $40,000 on the rent, since the Social Services building is owned by the county. Another $50,000 was saved by moving a county judge”™s office from a stone building in uptown Kingston to a smaller space in a county-owned building on Pearl Street. “We”™re doing strategic planning all the time,” Hein said.

”¢ Attaching performance requirements to economic development funds. “In the past, there was a blank check written by the county to the Ulster County Development Corporation (UCDC), with no expectations for performance,” noted Hein. Since the money “is an investment of public money and the public has the right to accountability, performance management principles are now in place.” He said that new UCDC President Lance Matteson “has embraced these concepts.” Additional county funds would be available as performance goals are reached.

”¢ Coordination of municipalities to save on storm-water management costs. One of the biggest challenges counties face is unfunded or underfunded mandates from the state and federal governments. One requirement of the federal government is that counties have a storm-water management program in place, under a program referred to as “MS 4.” But it doesn”™t provide funding. Planning, monitoring, and managing runoff from rainwater and snowmelt is an essential service that is also expensive. Ulster County saved on this cost by having the city of Kingston, towns and villages perform the mapping function of MS 4 collectively. “The municipalities are looking to find ways to be more efficient,” Hein said. “By pooling the resources plan and working together, they saved money.”

By far the most onerous mandate is Medicaid, particularly in New York, which is one of four states that require counties to pick up a portion of the cost. Medicaid costs have escalated at a rate of 3 percent a year, resulting in a total bill to the county of $195 million in the past six years; the amount is projected to reach $214 million in the next six years. On balance, the county taxpayer is responsible for $32 million of that cost each year, Hein said.

Another looming challenge is what”™s called Other Post Employment Benefits, which is an accounting change initiated by the federal government that requires counties to set aside money in their budgets for employees”™ future retirement costs. “We”™re talking about tens of millions of dollars,” Hein said. “Counties will have to fund that obligation. If you don”™t determine and fund your future obligation, you run the risk of being downgraded in bonding. There”™s a cascading effect that would increase the debt amount, which negatively impacts taxpayers.” Hein said these types of uncontrollable costs require his office to continually find creative ways to save money.

Has there been grousing from county employees about his shake-up of the status quo? Hein acknowledged there had been some resistance, but on the whole people have felt liberated. “We”™ve removed the wet blanket,” he said. “Many have long wanted to speak out about different ways of doing things.”

“The actions we”™re taking are the beginning of the process,” he said. The pressure is on: not actively seeking solutions puts counties at great risk, he warned. “We are at a pivotal point in Ulster County”™s and New York state”™s history. The state and federal governments, county, city, towns and villages must work together to become more efficient collectively. Without question, the reduction of services is a possibility if this doesn”™t happen. The options are unthinkable.”