Yonkers Consolidation Program (2016 LGAA)

City of Yonkers (Winner)
County: Westchester County
Population: 50,000+
City Hall: (914) 377-6300

The City of Yonkers (COY) - Yonkers Board of Education (BOE) Consolidation Program (Yonkers Consolidation), is a first-of-its-kind, large-scale merger of the administrative operations of two distinct municipal entities, resulting in greater operational efficiencies and economies of scale to both the organizations and the stakeholders in which they serve. In a period of less than one year, the City of Yonkers successfully guided the merger of five non-academic, administrative departments of the Yonkers Board of Education into the City of Yonkers government. The merger consisted of the transfer of 52 BOE employees to the City government, including the completion of desk audits, title adjustments, changes to labor affiliation and co-location of newly consolidated departments; and permanently assumed $9 million worth of administration functions into the City government.

Notably, this landmark governmental consolidation was borne of a dire fiscal crisis within the BOE. In 2014, the BOE notified the City that it had incorrectly budgeted roughly $28 million in incremental new revenue into both its FY 2012-13 and FY 2013-14 budgets, attributable to “new” Gap Elimination Adjustment (GEA) spin-up, to which it was not entitled. In all, the BOE had overstated $55 million in state education aid, creating two years of shortfalls, and triggering an on-going/annual $28 million revenue gap. As a result, the BOE was facing drastic cuts to its already limited programs and services, as well as massive teacher layoffs that would devastate basic educational services.

Mayor Mike Spano immediately spearheaded a solution designed to accomplish his three overarching objectives: (1) develop and implement a financial plan to plug the budget gap created by this error without compromising the quality of education or programming; (2) establish proper oversight over BOE operations to prevent an error of this magnitude from ever happening again; and (3) achieve additional savings by consolidating overlapping and under-managed administrative functions at the BOE and reinvest those dollars in the classroom.

The City lobbied for and obtained a package of financial aid and assistance from the State, which provided a road map for resolution of the historical and current year deficits associated with the BOE’s accounting errors. At the heart of this solution, was the execution of an innovative Inter-Municipal Agreement (IMA) by and between the City and the BOE, which provided for the City to assume financial and operational control of the non-academic, administrative functions of the BOE. Specifically, the resulting IMA transferred responsibility for all legal, budgeting, human resources, information technology and financial functions of the BOE (including procurement and contracts) to the City, and provided for the BOE employees in those functions to immediately become City employees. Further, in keeping with Mayor Spano’s key goals for the management of this crisis, the IMA provided immediate financial relief to the BOE in the amount of $9 million, which was achieved through the shift of the administrative costs associated with the consolidated functions from the BOE’s balance sheet to the City’s balance sheet, enabling the BOE to reinvest those dollars in its educational priorities. The savings resulting from the Consolidation Program along with the additional State assistance enabled the Board of Education to close its Fiscal Year 2014-15 budget gap without a single layoff or cut to educational programs. During its first year of implementation the Consolidation Program achieved more than $1 million in additional departmental savings, representing more than 10% of the total consolidated expenses.

As many New York municipalities, especially in our urban centers, continue to face growing fiscal challenges, this innovative Consolidation Program demonstrates the synergies that can be achieved when governments work together to identify opportunities for consolidation and efficiency, and provides a new model for governmental operation state-wide. The Program is a landmark example of intergovernmental shared services in the State of New York, and serves as a model for inter-municipal cooperation throughout the State.

 

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