Wooster audit suggests ways to save $500,000 [Daily Record, The (Wooster, OH)]

WOOSTER -- The long-awaited performance audit of the city identifies $500,000 in potential annual savings for the city if recommendations are implemented.

The chief areas targeted by the state Auditor's Office were with collective bargaining agreements and the way the city funds health insurance for employees.

In order to realize the total savings, the state made six major recommendations in its 33-page audit of municipal operations.

"Outside review provides a check on what you are doing and helps keep you grounded in the same fiscal reality faced by businesses and families every day," Dave Yost, state auditor, said in a written statement. "The city stepped up and welcomed that scrutiny, and by and large, they're running a pretty lean operation."

The release, which accompanied the audit, notes, "Wooster compensation levels ranging from approximately 6 to 8 percent above peers" and additional savings could be made "if employee health insurance contributions were raised to the statewide average."

First, the report states the city should renegotiate its police and fire department labor contracts to bring compensation more in line with peer cities.

Peer cities used in the audit were Ashland, Findlay and Sidney. Other state and national benchmarks also were used.

If police and fire union contracts were brought in line with peer cities, the report estimates it would yield a savings of $220,000.

Also regarding safety services, the audit recommends using part- time officers to cover overtime hours (currently, Wooster does not do this) and negotiating the fire department's overtime rate from 1.78 down to 1.5.

These recommendations would yield an estimated $37,000 and $29,000 in annual savings.

On the health care front, the report recommends Wooster, which is a self-insured entity, increase employee contributions and the plan deductible for an annual savings of $112,000 a year.

Currently, Wooster's in-network insurance deductible sits at $80 for a single person and $160 for a family, with the city paying 90 percent once the deductible is reached. Out of pocket maximums, including the deductible, are $400 and $800, respectively.

The audit suggested the city should look at opt-out incentives, conduct dependent eligibility audits and include a spousal restriction.

The audit also recommends the city eliminate its flexible savings accounts for an annual savings of $98,500. The report notes FSAs are not provided by any entity except for Wooster and are not required by law.

In a response letter attached to the report, Mayor Bob Breneman said the accounts are set up for employees to cover vision and dental, both of which are not covered under the city's regular health plan.

The last major recommendation made by the state was to outsource its outstanding accounts receivable to a collections agency for $4,300 in savings a year.

The audit states the estimated savings represent 3 percent of Wooster's 2012 expenditures. Based on the $63,500 spent to get the audit, the city could see a 789 percent return on investment if all recommendations were implemented.

With the police and fire contracts, the audit illustrates a typical Wooster safety service member makes more over a 30-year career than those in peer cities.

Looking first at the fire department, the report shows over a 30- year career, a Wooster firefighter makes on average $1.77 million compared to $1.64 million, or 7.8 percent more than peer average.

An average police officer in Wooster could make $1.72 million in that same time compared to $1.62 million in peer cities, or 5.9 percent more.

The report states base wages, not excessive overtime or sick leave, contribute to the discrepancy.

For example, the audit notes starting base wages for Wooster police and fire workers are in line with peer cities. But by years seven and eight (fire and police, respectively), Wooster employees are making 12 percent more on the fire side and 8.6 percent more on the police side than those in peer cities.

The audit also made a handful of recommendations without specific dollar amounts tied to them, including allocating the cost of IT employees to appropriate departments, publish annual reports online in a more timely and regular fashion, update purchasing card policies and develop formal sick use policies in order to define abuse and discipline employees accordingly.

The audit shows the city's average sick leave use of 65.4 hours per employee was higher than the overall Ohio Department of Administrative Services average of 59 hours in 2011, primarily due to the fire department.

But it notes firefighters work 29 percent more hours (2,688.4) in a year than a typical employee (2,080), which contributes to the appearance of higher sick leave use. It adds when a firefighter who works a 24-hour shift calls off sick, the budget is charged 24 hours. When the fire department data is removed, the city's average sick hours used per employee drops to 43.4 hours.

In the audit, the state charted the city's sick leave by department.

Of the total 13,675 sick hours in 2011, the fire department used 6,063.5 hours (44 percent of the total, 141 hours averaged per employee). The police department was second with 2,944.8 hours (21.5 percent, 75.5 hours per employee) and the public properties division was third with 2,691 hours (19.7 percent, 67.3 hours per employee).

City officials noted in the report that 2011 saw a number of injuries that ate up significant sick time.

Breneman's response letter at the end of the report took some issue with the audit, but vowed to use it to aid city leaders moving forward.

"While Findlay, Sidney and Ashland may be comparable in some areas, we firmly believe that simply comparing average statistics of those three cities to Wooster does not give a completely accurate view of all operations," he said in the letter. "Our intent is to implement as many of your recommendations as are possible, with due regard being given to limitations imposed upon management by the Ohio's Public Employee Collective Bargaining Act."

Breneman stated more than 91 percent of proposed cost savings measures are dependent upon contract negotiations with the three labor unions.

Reporter Steve Huszai can be reached at 330-287-1645 or [email protected]. He is @GeneralSmithie on Twitter.