THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, November 18, 1995 TAG: 9511181605
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY TOM HOLDEN, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 97 lines
If the City Council wins control of the school district's financial operations, it will not be the first time the two governmental bodies have combined resources to solve problems.
From landscape services to health care coverage, the school district and city hall have increasingly worked together to cut the cost of running government with no apparent loss in service.
``The concept makes sense, but the implementation is everything,'' said Patricia A. Phillips, the city's director of finance and the person who would likely oversee the consolidation.
As a condition to shoring up the school district's $12.1 million deficit for the 1994-95 fiscal year that ended June 30, the City Council has demanded that the district turn over control of its accounting, payroll, purchasing and risk management departments to the city's Finance Department.
The council has given the School Board a deadline of Tuesday to agree to the consolidation. If the board refuses, the council has said it might seek legislative authority from the General Assembly to force the issue.
The School Board so far has resisted the move, claiming that it must control its finances to effectively manage its responsibility to educate the city's 75,000 schoolchildren.
The most celebrated example of prior consolidations of services is the July 1994 agreement that merged the city and school district work forces into a giant purchasing pool for health care coverage.
By combining roughly 10,000 district employees and 5,000 city workers, the city had a larger work force to leverage its negotiations with health insurance companies to provide lower prices.
The move cut employees' out-of-pocket expenses and the city's contribution to those workers' health care benefits by $1.5 million in the 1994-95 fiscal year.
``The city continues to save money because it has not had to contribute more to workers' health plans,'' said Lynn G. Sachs, the city's benefits coordinator. ``The city contributes $170 per month per employee for health care coverage, and that has not changed for several years.''
The consolidation of health services also gave city workers access to a disease prevention program that school employees had used for about 10 years, she added.
City officials cited other examples of how combining workers and services can save tax money and, in some instances, improve services:
The 1993 consolidation of the city and school district's ground maintenance crews allowed the city to eliminate a middle-management position and save $45,434, while combining inventories for a one-time savings of $5,000, said Edward S. Barnes, the director of landscape services.
The resulting improvements in work-force efficiency will this year cut the time it takes to answer calls for service from 45 days to 25 days, he said.
Combining the video production services helped eliminate three full-time positions, lowered the department's work force to 14, and saved $130,000, said Gwen K. Cowart, the director of video services.
The department produces, records and broadcasts 60 to 70 City Council, School Board and Planning Commission meetings a year on cable channels 46, 47 and 48.
Combining city services is one thing. But merging the school district's complex finances with those of the city's could raise formidable obstacles not ordinarily faced by people working in municipal finance, according to one regional authority.
``There are three strong reasons why Virginia Beach schools and the city ought to look closely as to whether this is a proper step to take,'' said Forrest ``Hap'' White, the chief financial officer for the Norfolk public schools.
``I think the public is well-served by the checks and balances of having two finance groups in the city.''
The logic of school finance is different, White said.
From an accounting standpoint, teachers are usually paid as contract employees, working on a 10-month basis but often taking their pay over 12 months.
City workers are typically hourly workers.
``This is common to schools and one of the reasons there are so few payroll systems like the one in Virginia Beach,'' White said. ``It drives the payroll systems crazy.''
School systems must account for pay differences for people who provide coaching skills, or serve in unique departmental capacities, said White, who has worked nine years in public school accounting and seven on the municipal side.
``It took me a couple of years to make the transition from city government to the schools,'' he said.
White said that school districts are increasingly being asked to operate more like a business. When looking at that perspective, he said, consolidating financial services is bad business.
``I can't imagine any business leader saying they would run their business from borrowed accountants,'' White said.
``You absolutely have to have your own people acting on your own data.''
KEYWORDS: VIRGINIA BEACH SCHOOL BOARD VIRGINIA BEACH CITY COUNCIL
SHARED SERVICES FINANCIAL MANAGEMENT by CNB