Latest shared-services proposal projects $3.2M more in savings

Enterprise file photo — Michael Koff
One of about 17,500: Municipalities across Albany County have partnered with each other and the New York Power Authority on a program to buy back their street lights from National Grid and to swap out the old lights for high-efficiency LED lamps.

NEW SCOTLAND — Following a state mandate, the 2019 Albany County Shared Services and Property Tax Savings Action Plan includes four new proposals and “refines” five projects from the 2018 plan that were delayed or wouldn’t generate savings until 2020 or beyond. 

For participating municipalities, the third phase of the county’s shared-services plan is expected to generate savings of $3.2 million in 2020, with recurring savings expected to be anywhere between $4.2 million and $7 million when the plan is fully implemented. 

Every municipality — save for one, which may soon be on board — and every school district in the county is participating in some way in the 2019 plan, said Mike McLaughlin, director of policy and research for Albany County.

The four new proposals — a combined sewer overflow screening and disinfection facility at Lincoln Park in Albany; an increase in joint staffing at the Stormwater Coalition of Albany County; shared technology services; and joint mandated employee training — are expected to save participating municipalities $1.3 million in 2020. The fourth proposal, employee training, is still under development so its cost savings are not yet available. 

On Dec. 19, participating municipalities will vote on the adoption of Albany County’s entire 2019 shared-services plan. Municipalities won’t vote to participate in the entire plan, only the proposals that they choose.

Lucas Rogers, a policy analyst in County Executive Daniel McCoy’s office, said that the county advocates for its cities, towns, and villages to participate in the maximum number of proposals because they are not binding — it just gives the municipalities the opportunity to submit for reimbursement should they choose to participate in a proposal. 

The county is holding a series of public hearings for feedback on the shared-services plan. An Enterprise reporter was the sole attendee at the hearing on Tuesday morning at Cornell Cooperative Extension in New Scotland. A second hearing was scheduled for that afternoon in Berne, and a third will be held Thursday morning at the Albany County Office Building at 112 State St. in Albany.

The 2019 plan also includes a shared-services “report card” for the County-wide Shared Services Initiatives Underway from the 2018 Amended Plan, which says, when that plan (which includes five proposals from this year’s plan) is fully implemented, the annual savings are expected to be between $24 million and $27 million. 

Asked if there is an agreed-upon way to distribute the savings among the municipalities and school districts, McLaughlin said the answer “is a yes and a no,” but added, “Generally speaking, yes.” However, no municipality or school district has actually received any reimbursement from the state. 

In general, McLaughlin said, if two municipalities or school districts share a service, the savings will be split 50-50. And if multiple towns and villages are involved, say, five municipalities, the savings will be apportioned one-fifth to each municipality.

Nine proposals

The proposals include:

— The creation of a county-wide health consortium.

This proposal is a holdover from the 2018 plan in part due to insurer obstinance. The consortium has been slow on the uptake because the county has to request health-care information from each of the interested school districts, cities, towns, and villages, which is every municipality in the county except the village of Ravena and the school districts of Bethlehem, Guilderland, Menands, and Ravena-Coeymans-Selkirk. The consortium then has to request that information from its insurance provider.

But insurers are reluctant to hand over that information, McLaughlin said, in part because they may lose business. However, McLaughlin points out, the insurer could also dramatically increase its business by being the chosen insurer of the consortium. 

The New York State Department of Financial Services also requires municipal health-insurance consortiums to have two types of fund balances. One is a surplus reserve of expected annual premiums, which is set at 5 percent and is expected to be about $3.85 million for Albany County’s consortium. 

The second fund is an incurred but not reported (IBNR) claims liability reserve that can hold between 7 percent and 25 percent of annual expected incurred claims, which means having as much as $67.5 million on hand to pay out claims. 

The 2019 shared-services plan notes that the “panel,” which is made up of participating municipalities’ mayors and supervisors as well as school superintendents “believes that the IBNR reserve may safely be set at between 7 and 8 percent of the expected incurred claims amount or at an actuarially determined level.” 

The 2019 shared-services plan estimates $700,000 in health-care savings for 2021 (nothing in 2020) and, once fully implemented, annual savings are estimated to be between $2.3 million and $5.1 million. One example of savings would be that municipalities in the consortium would no longer have to pay a broker to purchase insurance, which accounts for about 4 percent of the premium.

The county can’t form the consortium until the state’s Department of Financial Services signs off, which the county hopes will happen by August 2020 to begin operation by January 2021; 

—  The retrofitting of street lights to high-efficiency light-emitting diodes.

Cities, towns, and villages across Albany County have partnered with the New York Power Authority and are in the process of buying their street lights from National Grid, swapping out the old incandescent lamps for high-efficiency LED lamps, which use about a quarter of the power of traditional lamps. 

All told, about 17,500 street lights are being upgraded: 10,000 in the city of Albany, a process that has already begun while the other 7,500 street lights will be spread across the county and eight of its municipalities — Altamont, Berne, Cohoes, Colonie, Guilderland, New Scotland, Voorheesville, and Watervliet — with construction anticipated to begin in 2020. 

In addition to the lowered electricity costs, Rogers said, municipalities will no longer be paying National Grid a service charge on each street light. 

The 2019 shared-services plan also notes that, “responsive to the concern about maintenance costs, the county is evaluating options for shared maintenance, including specialized shared personnel or participation in state programs.”

In 2020, the savings of swapping out old street lamps for LED lights is anticipated to be $150,000; in 2021, it’s $300,000; and, when fully implemented, the savings from LED lighting is expected to be $750,000 annually;

— The issuing of county-wide request for proposals (RFPs) for solar energy to improve municipalities’ buying power.

Rogers said, “It becomes an economy of scale.” For example, if two or three towns are thinking about putting solar farms on municipal-owned land, it would make sense to explore a partnership to make a bulk purchases to drive down equipment costs.  

There are other models, Rogers said; for example, there is a power purchase agreement, where the solar developer takes care of the design, permitting, financing, and installation of the solar system on a municipality’s property at little to no cost. And the solar developer will also sell the power generated to the town at a fixed rate that is typically lower than the local utility’s. 

There is also a straight rental agreement, where the city, town, or village collects a monthly check. 

The proposal is modeled on Schenectady County’s county-wide solar farm RFP, which has a goal for the county and all its participating municipalities to produce 100 percent of their electricity from solar energy by the end of 2021.

Annual savings are expected to be $225,000;

— The engineering and design of the regional biosolids facility.

This proposal is strictly related to engineering and design savings.

The 2019 shared-services plan says, “Engineering and design costs for separate facilities would be $6.6 million, compared to $4.1 million for a joint facility.” 

McLaughlin said the facility’s design would be complete by mid-2021. Construction would start sometime 2022, with an anticipated timeline of 18 to 24 months;   

— The implementation of a county-wide record digitization program.

McLaughlin said every municipality is on board with the digitization program. Demand outstrips supply, in part because digitization isn’t as simple as running a bunch of paper through a scanner; it’s a lot more complicated, he said.

There needs to be a way, he said, to figure out how to index everything that gets scanned — for example, marriage and death certificates, and all kinds of permitting.

The county tells municipalities to go after digitization grants, he said, at which point they go to the county clerk for guidance, who tells them if it can be done in-house or if it has to be subcontracted. 

“In 2020, the Albany County Clerk’s office will digitize the town of Colonie’s records, using a $149,947 grant from the state for this purpose. The town of Colonie would have incurred $300,000 in costs if it were to digitize its records using a private contractor,” the 2019 shared-services plan says. “The savings estimate for 2020 is the difference between the projected cost of using a private contractor and the state grant Albany County received to help offset the costs of this project.”

In 2021, the county clerk will digitize Guilderland’s records, according to the 2019 plan; savings are assumed to be similar to Colonie’s.

When fully implemented, the process could save $300,000 annually; 

— The Beaver Creek Clean River Project. 

The Capital Region’s cities, towns, and villages — combined — discharge, on average, about 1.2 billion gallons of untreated sewage every year. 

Albany’s Beaver Creek Sewershed, alone, is responsible for nearly half — about 530 million gallons. 

“As part of the Beaver Creek Clean River Project the city of Albany proposed to build a satellite combined sewer overflow screening and disinfection facility in Lincoln Park. In response to feedback from residents, the city of Albany and the Albany County Water Purification District partnered to develop an alternative project that would address expressed community concerns and reduce costs,” the 2019 share-services plan says. “Making enhancements \ to screening equipment at the Albany County Water Purification Department’s South Plant rather than investing in new screening equipment in Lincoln Park will save $760,000. Construction is expected to occur in 2020 … ”;

— Increased joint staffing at the Stormwater Coalition of Albany County.

Eleven Albany County municipalities and the University at Albany have entered into an intermunicipal agreement to comply with federal and state stormwater control mandates.

“In 2019, members of Coalition determined that to continue to improve water quality in Albany County and comply with upcoming Municipal Separate Storm (MS4) permit updates the Coalition would need new staff positions and concomitant additional funding,” the 2019 shared-services plan says. “To address this need, beginning in 2020 Albany County, Menands, Cohoes, Watervliet, and New Scotland will be pooling their funds to hire two additional staff people, a full-time geographic information system (GIS) coordinator to support all Coalition members; and a Stormwater Program Technician to provide additional support for the five above mentioned municipalities. 

“Significant savings will be realized as each municipality will not be hiring their own staff person or paying for additional contractual services to comply with current and new MS4 mandates”; 

— The sharing of information-technology services including cyber-security and joint ransomware insurance.

McLaughlin said that every municipality struggles with information-technology services — especially the smaller ones because they don’t have an in-house IT person.

And there’s a huge difference in infrastructure and technical capabilities when, say, the Hilltowns are compared to downtown Albany. In downtown Albany, McLaughlin said, everything is at your fingertips; in the Hilltowns, there’s a lack of high-speed internet. 

He noted that the city of Albany was recently hacked. Because of shared services, some municipal computer systems are shared so, if one were hacked, all are hacked, McLaughlin said. “Having recently suffered a major ransomware attack on its computer systems, the city of Albany highlighted the benefits of a coordinated effort to address cybersecurity needs,” the 2019 plan states. 

 It cost Albany about $300,000 for security software upgrades, firewall insurance, and other improvements to restore its systems. The city also put another $236,000 in its 2020 budget for IT contractual expenses for future protection.

McLaughlin said municipalities as well as school districts and fire districts generally want Albany County to spearhead this initiative;

—  Joint mandated employment-related and safety training.

This proposal is still underdevelopment. 

“All municipalities in Albany County currently conduct mandated training in such areas as, for example, sexual harassment and ethics. Commonly, each government contracts on its own with outside providers,” the 2019 plan says. “Albany County will explore the feasibility of conducting this training jointly and/or negotiating a countywide contract to make such training available to all its municipalities.”

Rogers said that he expects new proposals to be added by the time the final plan comes out in the next couple of weeks. He said, since the 2019 draft plan was published, the Capital Region Board of Cooperative Educational Services has come on as a partner and will offer cyber-gap analysis. 

BOCES has a contractor that comes in and looks at a municipality’s system and says where its strengths and weaknesses lie

It’s not a huge savings, Rogers said, but it’s an important thing to have. 

In addition, Capital Region BOCES will offer municipalities its grant-writing services; its records and information services; some other tech services; and training it provides similar to that provided by the Occupational Safety and Health Administration, which the staff of every municipality is required to take.  

McLaughlin said the county has also asked municipalities to include specific things that they’d like to see added, even if they are just one-offs, like a joint purchase. 

For example, Berne and Knox are sharing in the purchase of a garbage truck, McLaughlin said; they let the county know so that it’s included in the plan for 2020 and eligible for a state-match savings. For a $500,000 truck, the state would match $250,000, which would then be split between Berne and Knox at $125,000 each.

Voorheesville and New Scotland purchased a packer truck for brush pickup, which they can submit for reimbursement at the start of 2020, McLaughlin said. It was a one-time cost of $70,000 for each the village and the town.

 McLaughlin said the county told the municipalities not to put any of these anticipated savings into their budgets because there’s no proven track record to show how the state disperses the matching funds, so there’s no way of really knowing how it will all work out. 

The state has allocated $250 million for the program — but McLaughlin and Rogers both said they’d be surprised if more than a few million dollars had been dispersed thus far.

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