What Happened?
Left with a $30 million deficit by the previous administration, East Hampton, NY, has taken a series of steps—including in-house consolidation of services and zero-based budgeting—to contain costs and serve residents.
Background
East Hampton’s population is 21,400 and has a 2012 annual budget of $65 million. A new administration was left with a $30 million deficit, and has been looking at ways to consolidate services and offset costs.
In the budget document linked above you can read about how the town restructured town government over the last 20 months to maximize staff utilization. Among the changes:
- Merging harbor and docks department under the police;
- Establishment of a public safety function, which includes Ordinance Enforcement, Building Inspector, Fire Marshall and Animal Control;
- Creation of Finance Office overseeing Finance, IT, HR, Tax Receiver and Purchasing
- Streamlining of human resources
- Discontinuing leaf pick-up, which saved $700,000
- Establishment of zero based budgeting
Zero-based budgeting, as most Gov1 readers know, involves a bottom-up approach to rethinking all expenses and line-items. Instead of simply increasing or decreasing assumptions from last year, “ZBB” avoids baseline assumptions and incentivizes managers to identify savings, improve operations, eliminate waste, and find opportunities (i.e., for outsourcing, if appropriate). Though more time consuming, the ZBB often leads to improved communication, and staffers take greater initiative as they become motivated by their responsibility for—and impact on—the decision-making process.
IT “In"sourcing?
Interestingly, the city council tabled a vote to seek a request for proposals to outsource the town’s technology function, which currently costs approximately $1 million per year. While many towns are outsourcing IT functions, East Hampton’s finance committee actually recommended that the town’s IT investment be increased. A full study of IT needs will be completed by August, but is expected to seek keeping IT within the town to increase productivity and value for the town; eGov services such as online permitting are expected to be included.
More on ZBB
A very thorough report on zero-based budgeting was published by Government Finance Officers Association, noting that 20 percent of municipalities are now using ZBB.
North Kingstown, RI, is another town that has used ZBB; a copy of their budget can be found here; details can be found in the preface (page ii).
A history of ZBB can also be found at the Web site of the Nevada legislature. See also The Fundamentals of Sound State Budgeting Practices, published by the National Conference of State Legislatures.
Also available is a basic introduction on ZBB from the California Taxpayer’s Association.