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Local government stretching budgets? Opportunities for saving do exist

Could your city use a little saving? Local governments feeling stretched thin? Now more than ever, local governments across Illinois are experiencing significant declines in revenue sources, and because of this pressure, some are revaluating how they operate and discovering some unnecessary spending habits and stale routines.

Successful approaches for solving budget problems do exist, and local governments can act now and take this opportunity to reevaluate operating procedures, staffing levels and how they provide services. Local governments can learn from each other, and incorporate others’ best practices and ideas into their own operations.

The Village of Lindenhurst, for example, offers leadership on this new way of thinking about how to operate and provide government services. Lindenhurst, Illinois has a population of 15,234 people and its fiscal year 2009/2010 budget is approximately $14 million. The Village has saved over $922,000 in the last two years by adopting several core operating philosophies and practices to guide its new business approach, including:

  • Process and Program Evaluation – Complete a detailed, ground-up review of municipal programs, organizational structure and how programs and services are provided.
  • Process Reengineering – Based upon the findings of the operational evaluation, identify areas where processes can be improved and organizational structure changed to be more efficient.
  • Consider Privatization Opportunities – Challenge the traditional operating model of hiring in-house municipal employees and consider opportunities for utilizing private sector firms to provide municipal services, particularly for demand-driven services.
  • Develop Long-Range Financial Planning and Budgeting – Evaluate inputs (available staff time) versus outputs (actual time it takes to complete desired results) to determine needed staffing levels. In-house staff positions, service delivery methods and organizational structure should be driven by organizational goals and desired results.

This new business approach produced the following results:

  • Public Works Department merger saved $247,560 in annual operating expenses. This does not include cost savings associated with reductions in facility needs, elimination of equipment duplications and other improved processes.
  • Privatizing fleet maintenance saved approximately $114,810 in annual operating expenses.
  • Privatizing lab services saved $70,912 in annual operating expenses.
  • Privatizing utility locating saved $35,220 in annual operating expenses.
  • Privatizing building inspection and plan review saved approximately $105,221 annually in operating expenses.

By implementing these practices, the Village of Lindenhurst realized an annual cost savings of $573,723, avoided a $600,000 budget deficit and saved roughly $2,868,615 over the next five years. This is no small feat.

In today’s economic climate, government officials must evaluate operations and find new ways of providing the essential services people expect. The Village of Lindenhurst has taken on a business approach to local government, and in the process, maintained (or improved) services while saving significant taxpayer resources.

Lindenhurst has seen the positive results by taking a new business approach to government and challenging the “that’s the way we’ve always done it” mentality. Other municipalities throughout Illinois facing rising costs and diminishing revenues would do well to utilize similar concepts and approaches.

For a more in-depth look into how the Village of Lindenhurst implemented its best practices, check a comprehensive case study on the Village’s efforts at www.illinoispolicy.org.

Kate Campaigne Piercy is the Director of Government Reform for the Illinois Policy Institute.

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