VACostCutting

Monday, December 10, 2007

Virginia’s Experience with “Operational Reviews”

By Delegate Chris Saxman, Chairman Cost Cutting Caucus
and Bill Leighty, former chief of staff to Governors Warner and Kaine

Presented to the American Legislative Exchange Council

December 8, 2007


In 2005, Governing Magazine recognized Virginia as the Best Managed State in America. The Government Performance Project report stated, “There is little that Virginia does not do well in government management. That’s been true for a while. But it (Virginia) keeps looking for improvements, and very often finds them.”

Being rated by a national magazine, widely circulated in government circles, is wonderful. But as any citizen knows, the cost of government continues to grow, often at a rate that defies explanation. The taxpayers want an efficient and effective government that works toward reducing the cost of services. The taxpayers also want to know that the funds being entrusted by them are spent wisely, and only on necessities. Governments, whether they are federal, state or local, have an obligation to account for their expenditures of public funds and an obligation to constantly reexamine their expenditures. However, the public debate is often about programs that bring with them constituency groups and advocates that cause the political debate about cutting budgets to border on vitriol. Virginia decided on a course of action that looked differently at the “cost of government.”

Inspired by the efforts of the Virginia General Assembly Cost Cutting Caucus, chaired by Delegate Chris Saxman, and by the Executive Branch efforts toward formalizing and implementing performance management throughout the Commonwealth, Governor Timothy M. Kaine, then Chief-of-Staff William H. Leighty, Delegate Christopher B. Saxman and Senator Walter A. Stosch began an initiative in February of 2007 to conduct a series of Virginia state government "Operational Reviews." This effort was bi-partisan and jointly conducted by both the executive branch and both bodies of the legislative branch.

The concept was seemingly simple and similar to what taxpayer would consider when looking at their own household budgets. In other words, the same basic commodities that taxpayers would be concerned about in their own budgets were reviewed; the phone bill, electricity bill, water bill, trash bill, etc. The goal was to examine potential realized cost savings and increase employee productivity in a manner that would be readily understood by the taxpayer.

Initially the following areas were selected for review:
· Energy
· Water
· Fleet (automobiles)
· Travel
· Communications (voice and data; phones and cell phones)
· Print (copiers, printers and faxes)
· Mail (including premium overnight deliveries)
· Solid waste (paper recycling and materials)

Each review team was co-chaired by members from the legislative branch. The use of legislative chairs to review executive branch operations deserves some comment. The choice was a natural one, but not without controversy within the executive branch. Having legislators delve so deeply into such “operational issues” did not seem to come naturally to bureaucrats. But designating legislative co-chairs, it was argued, would be vitally important to get “buy in” for the reforms that would potentially follow. The executive branch felt that once fully exposed to the processes and procedures used to control costs in the executive branch, legislators would see that the executive was indeed doing a good job controlling costs. The only downside risk to the executive branch was that the teams might actually come up with ideas that would save taxpayer money. So, either way, the strategy was a “win-win.”

The Cost Cutting Caucus and the Senate leadership both readily agreed to take the lead and designate co-chairs for each review team. The co-chairs were balanced between the Senate and the House and between the parties, with a majority being Republicans because they were the majority party in both bodies. (It should be noted that Governor Tim Kaine is a Democrat)

For staffing of the review teams another innovative approach was used. Instead of asking senior agency personnel to staff the teams, a call for volunteers was put out to state employees from all branches of government. All branches of state government, legislative, executive and independent agency staff participated. The call for volunteers was targeted to the graduates of the state executive leadership training programs, both at the executive leadership level and the middle management level. The Governor’s chief of staff formally requested that all agency heads support the process by allowing volunteers release time to participate. By targeting the graduates of the Commonwealth’s leadership education programs it was felt staff with a demonstrated desire to better themselves, and that had proven they were amenable to innovation, would be recruited to staff the studies. An added bonus to this strategy was that state employees that were generally in the beginning of their careers and had not had previous experience working directly with legislators volunteered to help staff the studies. This allowed state employees unaccustomed to dealing with the legislative branch to build longer term relationships that would benefit them over their careers, and benefit the Commonwealth generally by building legislative-executive branch relationships.


The process was equally simple:
1. The teams, including the legislative co-chairs, were briefed on the total expenditures for each operational area (pulled from the state’s accounting system).
2. The teams received guidance from legislative co-chairs.3. The teams researched the topic, obtaining necessary expertise from outside resources where necessary (Wal-Mart, for example lent a national executive to the Energy review team).
4. The teams drafted an initial report for presentation to the legislative co-chairs.5. The legislative co-chairs reviewed/commented/approved the reports.6. The report was sent to an Operational Review Oversight Committee for further consideration and actionDecisions to accept, revise or reject any recommendation presented in an Operational Review final report belonged to the Operational Review Oversight Committee. This committee is comprised of Delegate Christopher B. Saxman (chair), Senator Emmett W. Hanger, Jr., and Secretary of Finance Jody M. Wagner. In all cases, the committee based its decisions on the expertise and data provided in the reports in combination with expertise and data from other sources (including stakeholders) relevant to the issue(s). Their goal was to test, tune and advance the very best recommendations in an effort to improve Virginia state government performance in the most cost-effective way possible. Specific decisions to advance a recommendation were always subject to all applicable laws, policies and processes. (I.e. the procurement process)

Currently all the reports are posted online at http://vacostcutting.blogspot.com/ for public comment and have been forwarded to the Governor’s office for review and implementation. Governor Kaine is currently formulating his budget and will present the 2008-2010 budget on December 17th, 2007. Should the Governor not implement the recommendations, the reports are also in the hands of the citizens and the General Assembly and available for action.

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