THE CAMDEN COUNTY TRANSFORMATION INITIATIVE

As this nation struggles to cope with the most significant economic crisis since the great depression, it is incumbent on government leaders at all levels to do everything possible to minimize the hardships facing our citizens.

Here in Camden County, the Board of Freeholders has been a relentless advocate for the taxpayer and extraordinarily aggressive in our efforts to control the cost of government. In 2009 we will reduce the tax levy for the third consecutive year, a reduction of over $6 million during this period. This has been achieved in spite of a $60 million dollar gap between decreased revenue and increased costs during those same three years.

In addition, we now have 600 fewer employees than we did just four years ago . . . without any reduction in services to residents.

Because more and more Camden County residents are feeling the financial strain of this worldwide financial crisis, the Freeholders announced that our 2009 budget would not raise the amount of money we collect from county taxpayers. We took this position because we strongly believe that for government to ask more from taxpayers without first looking at what additional steps can be taken to further curtail costs and maintain services is unconscionable.

In short, the catastrophic magnitude of the current recession – and the almost universal predictions that the economic climate will get far worse than it is today before showing improvement – means that Camden County government and our employee partners have to do even more to reduce the cost of government.

Toward that end, I announced additional steps which this government will take – and which we urged all municipalities, local school districts, fire districts, and any other entity which taxes residents – to take:

First, we called for a 2009 wage freeze for all Camden County government employees, and all employees of our various agencies.

Second, we asked our bargaining units to immediately begin working with us to fundamentally restructure employee contracts.

Third, we indicated that we would initiate the broadest effort at management reform ever undertaken by this or to our knowledge any county government.

Today, I am here to formally announce the details of that management reform in the creation of what we are calling the “Transformation Initiative.” It is an initiative of potentially seismic proportions designed not only to aid the taxpayer’s burden, but also spur long-term institutional change, and dramatically transform the way we operate Camden County government.

The initiative has two goals: one, to further reduce the cost of government, and two, to significantly improve the efficiency and effectiveness of service delivery by consolidating or restructuring services.

The pressing need for such efforts can be found in a review of the numbers. In 2009, we project that the there will be no growth in our tax base. No growth -- This is unprecedented. Historically, the value of the taxable real estate in the county has experienced at least some market growth each year. For example, from 2005 through 2008 the tax base grew by an average of 13.25 % annually. However; now for the first time in recent memory, we are projecting zero growth.

An additional measure of the financial crisis can be found in the fees the county receives from real estate transactions and in the interest we earn on investments. In 2008 real estate transaction fee revenue dropped by $4 million. This reflects a significant drop in the sale of both residential and commercial properties. Interest earned on the investment of funds dropped $2.5 million. The combined impact of just these two revenue items is projected to carry over into 2009 with an impact estimated at $5 million.

In terms of measuring the human impact of the crisis, we know that foreclosures in Camden County are at an all time high, unemployment is on the rise, and retirement and savings investments are being depleted.

Together, these metrics document how our national economic crisis is impacting Camden County. Therefore, this crisis requires a response of equal proportion, a response that re-examines our core operating practices and looks for new ways to ease the burden on our taxpayers while maintaining their quality of life.

It is important to understand that from an operating perspective, Camden County government can be viewed as an umbrella organization comprised of two groups. Group one is made up of those government units that share a common operating infrastructure such as payroll, accounting, human resources, procurement, insurance, information technology and the like. These units include the departments of county government that fall within the day-to-day direction of the Freeholders, the Row Officers (i.e., County Clerk, Sheriff and Surrogate), the Camden County Library Commission and several organizations whose authority originates from the State of New Jersey, but who operate within the structure of county government. These units include the Board of Elections, Prosecutor, and Board of Taxation. Collectively, county funding for this group amounts to 50% of the county budget or about $154 million.

Group two is a cluster of seven semi-autonomous organizations that function independently of the first group with regard to their operating infrastructure. These organizations maintain their own internal support systems. They include the Board of Social Services, the Health Services Center, Camden County College, Camden County Technical School District, the Improvement Authority, Municipal Utilities Authority, and the Pollution Control Financing Authority.

This second group are overseen by independent boards appointed primarily by the Freeholders and in many cases are funded in part through the county budget. Collectively, these organizations consume approximately 13% of the county budget or about $41 million.

Historically, there has been a modest level of coordination between the two groups and there are several examples where such cooperation has yielded a savings or an operating efficiency. Common use of gas pumps, snow plowing, and printing are just a few examples. While not monumental in scale, these rather routine examples illustrate that there may be additional economies and efficiencies if we look deeper.

To do just that and much more “The Transformation Initiative” will examine the relationships between and among the components of these two groups, because we believe that only through the examination of a fundamental alteration of the way we operate --- a transformation --- will we achieve our goals.

The primary focus of “The Transformation Initiative” will be the operating infrastructure as it functions in each of the groups. Specifically, the Board of Freeholders is commissioning a study and the development of an implementation plan that will identify cost savings and/or operating efficiencies that can be produced through restructuring, centralization, shared service arrangements, or any other new configuration of those functions that fall within the framework of the operating infrastructure.

Secondarily, the study will also look for broader management and administrative relationships between the units that could produce economies and efficiencies through restructuring.

In sum, “The Transformation Initiative” will elevate to a new level our efforts to help the taxpayer. It will produce long-term economies as well as creative approaches that will help those semi-autonomous organizations who rely on funding from the State of New Jersey to cope with the prospect of diminishing State support.

Therefore, consistent with our approach to maximize the resources within county government through “The Transformation Initiative,” its very structure will reflect the spirit it embodies.

To fulfill the promise of the Initiative, the Board of Freeholders is entering into a shared services agreement with Camden County College. The College will conduct this study and undertake the initiative through its Center for Civic Leadership and Responsibility.

The Project Director will be the College’s Vice President for Adminstrative Services, Louis Bezich.

Camden County College and its Center for Civic Leadership and Responsibility represent a resource that can serve this project well and further serve as a forum to spur institutionalized change in local governments throughout all of Camden County.

On behalf of the Freeholders and all of us committed to the growth and prosperity of our great County, I thank College President Yannuzzi for his commitment and support of the initiative and look forward to working with him on this exciting and important endeavor.

Mr. Bezich’s credentials and experience in the operations of county government, including its semi-autonomous agencies, make him uniquely qualified to serve as Project Director. He has served as County Administrator where his innovations such as the “County Store” garnered national recognition and awards. He presently serves as President of the Board of Education of the Camden County Technical Schools where, for the past two years, U.S. News and World Report has rated the District’s Pennsauken school as one of the top technical high schools in the nation.

In the decade before joining the College in 2008, Mr. Bezich built an award-winning consulting practice and he has served as an adjunct professor of political science at Camden County College and Rutgers University. In sum, Mr. Bezich brings a unique insight into the operations of government and to the important work that lies ahead.

Our charge to the College is to conduct a thorough and comprehensive study that will document both the opportunities as well as the actions required to implement any recommendations.

Given the gravity of the economic crisis, the Freeholders would certainly like to see the results of this study in short order; however, we recognize the challenges of institutional reform and the need for a methodology that will produce meaningful results. Therefore, we have structured our shared services agreement with a requirement for quarterly reports that will enable us to monitor progress. It is our expectation that the College will produce progress reports quarterly, and a comprehensive annual report will be delivered at the end of one year.

In addition, the agreement calls for the College to conduct a transparent process using the College’s Center for Civic Leadership and Responsibility as a vehicle to conduct public forums, meetings, and other study-related activities. These activities will ensure that the public is part of the process and provide taxpayers with an opportunity to share their perspective on county operations.

Continuous improvement is a management principle with application to county government, particularly in these hard economic times. The Board of Freeholders views “The Transformation Initiative” as a significant milestone in its efforts to improve county government by examining a completely new set of relationships previously only the subject of limited review. By forging this new ground we hope to generate new ideas, strategies, and innovations that will indeed transform and fundamentally alter the way we operate county government, producing a platform for more efficient and cost effective services for the citizens of Camden County.

Finally, there should be no mistake: county government acting alone cannot control the overwhelming and growing financial burden on our taxpayers. Municipal governments, school boards, fire districts, and all taxing authorities must also take bold action in support of our taxpayers.

We know that 2009 salary freezes, dramatic operational reforms, and significant reductions in spending are all required of every government entity.

We urge all government entities to do what we are doing for Camden County.

The current economic circumstances require this and our taxpayers deserve no less.

Thank you,
Freeholder Director Louis Cappelli, Jr.
February 18, 2009