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IID study: Save millions by cutting costs, workers

September 20, 2001|By RUDY YNIGUEZ, Staff Writer

IMPERIAL — The Imperial Irrigation District can save $31.6 million yearly with a one-time investment of $9 million, according to a draft report of the third and final phase of the district's efficiency study released Monday.

The report states the net present value of the savings is estimated at $217 million.

Savings would come through a reduction in the number of employees, allocating zanjeros' spare time to water-system maintenance, a reduction in overtime, a reduction of vehicles through attrition, further implementation of the district's business computer system, the closing of division offices and the outsourcing of billing, among other methods.

The study's second phase report had previously identified only about $21 million in annual savings.

Of the savings identified in phase three, $25.47 million annually are thought to be in the power department, with $6.13 million annually in the water department.

The report says with zero investment the district can save $2.17 million in customer care services and with a $40,000 investment it can save $2.12 million through the reduction of 275 vehicles in its fleet. With a $3.35 million investment the district can save $10.13 million through improved organization and staffing and with an $800,000 investment the district can save $10.4 million in customer-service projects, that is, construction projects for which the district can charge customers, according to the report.

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The report says the IID board should develop certain roles and policies to maximize efficiency gains. For example, through a redefinition of the board's role and involvement, the report states, management's actions will be facilitated. The board's development of critical policies will facilitate the consistent implementation of fleet management efficiency measures and staffing reductions, among other changes.

The $875,118 efficiency study was approved on a split vote, with directors Lloyd Allen, Bruce Kuhn and Rudy Maldonado supporting it. Voting against the study were directors Andy Horne and Stella Mendoza.

Kuhn said he was elected to the board by the public to do a job.

"If there's an opportunity to save the public, hell yes, we'll implement the study," he said, adding he would not have voted to spend money on the study if he were not going to support its implementation.

He said the district is reviewing the report to validate the numbers in it, and that he expects some numbers will change.

Maldonado said implementation of the study's recommendations will better position IID for the future.

"I can say for sure it's going to take time because it's monumental," he said this morning, adding the implementation must be done properly.

Maldonado also said savings should first go toward upgrading the district's old power and water infrastructure, and if money remains, it should go toward lower power and water rates.

Allen said he is still reading the study but is excited about it. He also said he supports the data-validation process.

"I want the report to be done correctly," he said this morning.

Allen again said he thinks any staff reductions can be accomplished through attrition.

Mendoza said she originally voted against the study because it did not include power and water cost of service studies. Now that the power study is done, and the water study is under way, she said she supports the efficiency study.

Mendoza also said it is critical that the district perform the data validation "because our decisions are going to have far-reaching impact on how we do business in the future."

Horne could not be reached for comment.

Meanwhile, the report suggests IID should develop an incentive plan for employees.

"A performance-based incentive plan will provide employees with a shared interest in the near-term and long-term success of IID," the report states. "An incentive plan is a mechanism to reward employees for exceptional performance without increasing recurring payroll costs."

The report suggests an incentive plan can be developed in about 20 weeks at a cost of about $53,000.

The report states a hiring freeze should be implemented, followed by a formalized organizational design, a review and rewriting of job descriptions, the creation of severance packages, the creation of staffing guidelines, the staffing of the district by levels and the preparation and distribution of individual severance packages. It is estimated this process should take six to eight weeks.

On the issue of vehicles, the reports suggests the district develop a fleet-reduction strategy; document policies and procedures for using transportation vehicles in the district pool; develop new policies for buying vehicles, vehicle pools and how vehicles are assigned; and liquidate vehicles when retired from service. The report suggests development of new policies and their implementation should take about two weeks once begun.

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