5 Things I’ve Learned Managing in the Public Sector
In the private sector, business owners agonize over every penny they spend. Although it happens in the public sector as well, government doesn’t have a reputation for watching how closely they spend public money.
After six years of managing in the public sector, I’ve learned several ways to bring business practices to government and achieve good results.
Consolidate Assets and Negotiate a Better Price
When I came aboard in my current role in 2010, one of the first things I noticed is that we have a $300-million checkbook. When you include the property tax levy that we collect and distribute, we have cash assets valued at more than $2-billion. That knowledge alone put us in a different frame of mind when we negotiate with vendors.
We started asking for discounts, and vendors responded. When we pointed out that our bank fees were basically the published rate card, we received discounts in return for steady balances. When banks ask for additional cash deposits, we negotiate higher interest rates.
We understand that vendors have to make money to stay in business. It’s also our responsibility to hold the line on what we can and will pay for.
Review Your Vendors Regularly
Competition is a good thing, even in a world governed by purchasing ordinances. The very fact that we’ve taken every single contract in our office out for review helps ensure that we the best product at the best price. We are very open about what works well and what we want to improve upon.
When we are considering a new product or new vendor, we do check references. If a vendor cannot deliver results for a smaller county, for example, we know they will struggle with us even more. It’s a tactic that keeps us from make a mistake or compounding a problem we wanted to solve.
Train Your Staff to Look for Savings
With printing and postage, it costs about $1.62 to mail a property tax bill. Believe it or not, we spent money to mail property tax bills with a zero balance due.
When our staff noticed how many of these bills we mailed, they helped manually set aside bills we already printed. The next year, we identified 15,873 zero balance bills before we printed them, thus saving $9,841 in expenses.
Make Expenses Variable Versus Fixed
Making a fixed expense variable can really help your budget. When our envelope-stuffing machine was on its last leg, we decided to lease rather than purchase. While that sounds simple enough, governments like to procure fixed assets. Even after depreciation, a capital expense can come out more favorably in a lease environment.
As an added bonus, you can upgrade (or downgrade) at the end of the lease depending on your future needs.
Fiscal Discipline as a Core Value
Illinois law requires county treasurers to notify people when they have not paid their property taxes. For years, our office send those notices as registered mail. It was expensive, time consuming to fill out paperwork, and over half of the mail was never signed for by the delinquent property owners. When we noticed that state law said the notices could be sent as certified mail (a much cheaper option), we reduced postage by $35,683 in one year.
Having fiscal discipline doesn’t mean you have to be cheap.
