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Cost Cutting Ideas for Municipalities

Read more of our discussion on how municipalities can cut costs in various different industries.

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Read more of our discussion on how municipalities can cut costs in various different industries.

The fiscal years for most of Connecticut’s cities and towns are just about half over, and the Connecticut General Assembly—filled with a number of new state legislators, not to mention a new governor—is fewer than two months away from convening its 2019 session in early January. And as customary over the past several years, the primary challenge facing lawmakers will be balancing the state’s budget, with a looming deficit of more than $4 billion over the next two years.

This challenge, as always, will likely be felt by the 169 Connecticut municipalities, which depend on state support to help balance local budgets and to keep important local government and school programs running. It has become a familiar refrain, but it remains reality for all of these cities and towns—depending as heavily on state funding as they did a decade or more ago is not the most advisable route for them to take.

The better option? For these cities and towns to consider cost cutting measures locally, in an effort to mitigate against potential losses at the state level. Here are some ideas of areas where possible savings can be found.

GOVERNMENT/BOARD OF EDUCATION SHARED SERVICES

Where local charters allow it, municipalities should look into areas where services between the city/town and the schools can be shared, possibly in the financial and human resources arenas. This is particularly true in some of Connecticut’s smaller towns, where having two separate departments for every town and school function could be viewed duplicative. This can also apply to the bidding process; the municipalities and schools performing as one entity when seeking bids for services can lead to potential savings.

INFORMATION TECHNOLOGY

This has become a vital area for local governments and schools over the past decade, as municipalities have become more and more dependent on the right technology in the administration of all local programming. One area of savings is to consider combining IT services of the school board and the local government into one, and to make use of it as one whole system, rather than two individual ones. Consolidation of IT functions within municipalities can lead to significant cost savings as well as help to avoid redundancies. This is a primary area where cities and towns can look for significant financial benefits.

ENERGY

This is another area that should be mined for cost-saving ideas. Conducting town-wide audits of energy usage is a good place to start, and some ideas that have proven successful include automated thermostats and better efficiency lighting. In an area as volatile as the energy market, avenues for potential savings should always be explored.

PENSIONS

While this can be a subject of great sensitivity between municipalities and employees, and must be approached on a case by case basis depending on the particular city or town, there are possibilities for financial benefit here. Contributing to employee pension plans now can lead to savings later, particularly if municipalities consider switching from Defined Benefit Plans (DBPs) to Defined Contribution Plans (DCPs). But again, there is no “one size fits all” for municipalities with their pensions, and each will need decide individually if it is the right thing for them.

SHARED SERVICES WITH NEIGHBORING TOWNS

Finally, there is the idea of working with neighboring cities and towns to consider sharing some level of service. This could be particularly useful in smaller towns, but every municipality should still have the discussion. Sharing equipment, public works responsibilities, public safety roles—it may not work for every city or town, but the discussion should be had.

These are just a few areas to which municipalities should at least give some thought. In austere budgetary times, any level of savings can indeed help.

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