Governor's new 'Smart Government' initiative

Today Governor Beshear issued this press release:

FRANKFORT, Ky. — Pledging to continue good stewardship of scarce tax dollars, Gov. Steve Beshear today introduced additional efficiency efforts to broad sectors of government to save money and state resources. This new initiative, Beshear’s “Smart Government” policy, extends and expands the efficiency measures the Governor instituted during the first two years of his administration. In addition, for the first time, Cabinet secretaries will take a 10 percent salary reduction in 2010. Gov. Beshear, Lt. Gov. Daniel Mongiardo and senior staff voluntarily took 10 percent pay cuts beginning in 2009 – cuts that will continue this year.

“In addition to making $900 million in budget cuts over the last two years, my administration has continued to aggressively look for ways to save money within state government and continue to deliver quality services to the citizens,” said Gov. Beshear. “This smart government initiative will require cooperation among a number of critical agencies to achieve government-wide savings.”

“Although the U.S. economy shows promise of recovery in 2010, Kentuckians still face difficult days ahead,” said Lt. Gov. Mongiardo. “Just like last year, hard working families across the Commonwealth continue to cut back their expenses in order to survive an economic recession as bad as many of us have seen in our lifetimes. As we continue to cut and reduce state government, it is of utmost importance that we share in that sacrifice to ensure that the state we love emerges from this crisis stronger than ever.”

While efforts have been underway by state agencies to identify cost savings, the next phase of measures involves an extensive review of three major government-wide areas: owned and leased state properties; delivery of business solutions, including information technology, transportation and postal services; and state procurement, including a review of all state contracts.

A detailed review of the following areas will be conducted under the “Smart Government” initiative:

Property management:

• Sale of non-essential assets: Gov. Beshear has directed a comprehensive review of all assets to determine those no longer essential to meet the state’s vital needs. The state has started selling state assets through live auctions, Internet-based auctions and other competitive procedures. Surplus items include real property owned by state agencies; non-essential vehicles and planes; state-owned surplus personal property and equipment; and surplus federal property. For example, on Dec. 18, 2009, the state held a public auction resulting in the sale of a state-owned parking garage in Covington for $1.5 million.


• Comprehensive leased property review: Gov. Beshear has directed a government-wide review of leased properties to identify opportunities to downsize and consolidate when possible to achieve cost savings.

Delivery of business solutions:

• Review of information technology: Gov. Beshear has directed a review of information technology processes and encourages leveraging technical expertise across agency lines. Specific elements of the review will include: statewide IT and communications services; desktop support; asset management; printing and help desk functions; and expanding opportunities to leverage buying power for IT purchases.


• Review of state cars and trucks: Gov. Beshear has directed a review of the state fleet, including: evaluating the cost effectiveness of take-home vehicles; expanding a pilot program that installed GPS on dozens of state vehicles, which demonstrated 10 percent reduction in miles driven, an 83 percent reduction in speeding and 14 percent increase in fuel efficiency; exploring self-insurance for vehicles; and outsourcing the state’s fleet partially or in total.


• Review of postal services: Gov. Beshear has directed a review of postal service processes utilized by state government and its agencies to identify potential savings and efficiencies.

Procurement:
State agencies procure hundreds of millions of dollars worth of goods and services through contracting and procurement practices. The Governor has directed a review of both specific types of contracts, as well as a general review to identify opportunities for savings and efficiencies.

• Cell phone and data wireless services: Agencies will review opportunities to consolidate cell phone and data wireless services, sharing unused wireless minutes and expanding bulk user savings.


• Contract review: Agencies continue to save money by eliminating, reducing or renegotiating contracts with vendors. Greater savings could be achieved by a coordinated, government-wide procurement efficiency effort.

A decision-making body with representation from many agencies of the executive branch will be named to implement this comprehensive efficiency initiative. The committee will oversee the review of opportunities for enterprise cost savings and service efficiencies and implement new procedures and processes to achieve them. This committee will be chaired by the Secretary of the Executive Cabinet Mary Lassiter and staffed by the Finance and Administration Cabinet, whose Secretary, Jonathan Miller, will be executive director.

“Under Gov. Beshear’s leadership, state government is more efficient, transparent and sustainable than ever before,” said Jonathan Miller, Finance and Administration Cabinet Secretary. “With his current initiative we will create a smarter, leaner and stronger government in the long run, capable of dramatic progress when the economy turns around.”

Continuing a Commitment to Good Stewardship
Shortly after taking office in December 2007, Gov. Beshear began an effort to identify cost-savings and efficiencies across state government. In the first two years of his administration Gov. Beshear has directed a number of broad efficiency measures, including:

• Personnel: Under the Beshear Administration, the executive branch is the smallest it has been in almost 20 years, with some 3,800 fewer employees than just five years ago, and nearly 1,600 fewer than December 2007.


• State bonds: The Finance and Administration Cabinet has refinanced and restructured outstanding bonds to take advantage of lower interest rates, creating significant savings in debt service. In the last two years, the cabinet has refinanced $55 million in bond issues at lower interest rates, which resulted in $2.7 million in debt service savings. The Cabinet also has restructured $205 million of principal amount of debt for budgetary relief in FY 2009 and FY 2010.


• Travel: The Governor implemented strict policies limiting travel and establishing cost-saving restrictions such as requiring overnight stays at state parks when practical. Travel expenses dropped 12 percent between FY 08 to FY 09.


• Administrative costs: State agencies have reduced administrative costs in a wide range of service areas, including reducing laundry and cleaning services; reducing uniform purchases; and reducing mailing costs by increasing use of online documents and e-mail.


• Energy savings: Gov. Beshear issued a policy requiring all new construction and major renovations of state-owned buildings to adhere to energy-efficiency standards that are among the toughest in the nation, and launched an initiative to reduce energy use in existing government buildings. Strategies include increasing the use of motion-sensitive office lighting and automatic thermostats to save money on heating and cooling; using energy management software to monitor use and reduce energy consumption and energy efficient bulbs for all new and replacement lighting; and replacing aged heating systems when appropriate with energy-efficient HVAC systems. The Capitol campus, which includes the Capitol, Capitol Annex, Governor’s Mansion, and parking garage, is currently undergoing an energy efficiency makeover through an Energy Savings Performance Contract that will be completed by the end of this summer. This will result in a more than $281,000 annual savings from the reduction in utilities and maintenance.


• Maximizing federal grants: Agencies are utilizing every available resource to gain additional federal grants, as well as maximizing and leveraging the federal funds currently appropriated.


• Salary reductions: In December 2008, Gov. Steve Beshear, Lt. Gov. Daniel Mongiardo and members of the Governor’s senior staff took 10 percent salary reductions for 2009.