What's New
Bill Targets Municipal Cost Savings
The Boston Globe
By, Connie Paige, Globe Correspondent - June15, 2008
A
bill pending before Beacon Hill lawmakers could significantly change the
way communities do business while saving tens of millions of dollars
statewide to help pay for skyrocketing municipal expenditures.
Proposed
by a coalition of eight Merrimack Valley and North Shore communities, the
legislation would allow municipalities to trim various costs by changing
state billing practices for federal reimbursement, using state and federal
healthcare plans for their employees and retirees, sharing resources
either internally or with other cities or towns, and using the Internet
for contractor bidding. Some of the proposed measures are now forbidden by
state law.
"Many
of our communities are in fiscal meltdown, and this package is designed to
help them save money," said state Senator Susan C. Tucker. The
Democrat, who represents Andover, Dracut, Lawrence, and Tewksbury, said
the changes, which have bipartisan support, would not cost the state
money.
Methuen
Mayor William M. Manzi III said lawmakers should approve the bill, since
the state has cut local aid for several years even as municipal expenses
increased dramatically.
"We're
looking for the Legislature to remove the administrative shackles for
reducing our costs," Manzi said. "There may be some legislative
discomfort at some of these provisions. If that's the case, we say, send
us the money."
Manzi
said that it's too early to tell how much any community might save under
the bill, and it would likely differ from one municipality to the next.
One
big money-saver would be to change the procedures under which
municipalities are reimbursed for the cost of special-education services.
Communities receive reimbursement for half their costs from the
Massachusetts Municipal Medicaid program, which gets money from the
federal government and doles it out to individual cities and towns.
Currently,
the amount per student is based on a formula developed in the 1990s that
averaged out the costs of all special-needs Medicaid costs statewide,
including services for the entire spectrum of disabilities from minor to
very serious. The bill proposes to scrap the average and pay communities a
fee for service for each eligible student. That would allow a much higher
reimbursement for those students with serious special needs.
The
solution was taken from a 2004 report by State Auditor A. Joseph DeNucci's
office. That report said if communities changed to fee-for-service
billing, they could expect $50 million more combined for special-education
services.
Another
significant cost-saver in the package would make it easier for communities
to enroll municipal employees in the state's healthcare plan. While state
lawmakers approved a similar measure last year, it required municipal
unions to sign off on a switch to the state plan. The proposed provision
would permit such a switch without labor backing.
Under
the bill, communities also could require eligible retirees to receive
healthcare from Medicare instead of private providers. Now the retirees
can choose a private plan, which creates high expenses, the bill's
advocates say.
If
the legislation passes, communities could also streamline the way they do
business. Under the present system, two employees procure goods and
services and manage hiring for the schools and for the municipal
government; the bill would let communities combine those two jobs and
other duplicative functions into one. Another provision in the bill would
permit communities to save on administrative costs by jointly contracting
for common providers, such as recycling companies.
The
bill also would allow communities seeking goods or service providers to
conduct auctions, much like those held by the Internet company eBay,
instead of the current protracted request-for-proposals process. The
auction would allow prospective contractors to bid not only against
competitors, but also against themselves, and lower their bids as the
clock ticks down to the deadline.
The
idea for the legislation first gained traction more than a year ago when
eight Merrimack Valley and North Shore mayors and town managers agreed to
try together to put the brakes on budget-busting costs. The coalition
members represent Amesbury, Andover, Haverhill, Lawrence, Methuen,
Newburyport, North Andover, and Salisbury.
The
coalition developed what it called the Municipal Management Package, now
before legislative committees for consideration as part of next fiscal
year's budget.
"The
purpose of this is to put more tools in the community's toolbox,"
said Merrimack Valley Planning Commission executive director Dennis A.
DiZoglio, who acted as a facilitator for the coalition. He said the bill
would apply to all communities statewide.
Tucker
cautioned that change would take time, if the legislation passes.
"That is not something that's going to appear any time soon,"
she said. "It's a long process."