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Montgomery County Organizational Reform Commission While appreciating the considerable pro bono work performed by this individual, the ORC was not convinced that all these assumptions are entirely defensible. We believe that some are overly optimistic and that others would rely heavily on the raising of fees. The major argument made by this individual that appeared to have the most merit, was the comparatively low consumption - and hence, sales rate for a county of our population size and median household income. The bottom line is we do not believe that privatization, at this juncture, would generate revenues sufficient to make up for the $25-$30 million that is transferred annually to the General Fund, under the existing system. Contracting Under contracting options, the County would continue to maintain effective control, provide adequate levels of service, and potentially increase surplus revenues through lowering costs. The ORC discussed contracting and the fact that the County had previously contracted out the operations of several of its retail stores. In 1997, a State bill limited the County's contracting of DLC retail operations to the stores under contract at that time. Currently, the Flower Avenue store is the only contracted retail store. State law would have to be amended to allow contracting of retail operations. Cost comparisons show that the County could save money on personnel costs if operations are contracted. Warehouse operations are currently contracted for night-loading operations. The ORC discussed contracting out warehouse loading and delivery operations. There are 63 employee workyears associated with warehouse staff and 72 workyears total associated with warehouse and delivery operations. This is a potential area for savings in both reduced personnel costs and legacy costs. The level of private sector interest in providing warehousing services is unknown. Contracting of warehouse operations would likely reduce costs because potential contractors would bid in accordance with current market wages and benefits paid for similar employment in the private sector. Contracting would allow the County to forgo costs related to breakage and pilferage because the contractor would be responsible for those costs. From 1993 to 1997, the County successfully contracted the operations for four County retail stores and was considering the expansion of contracting to its other retail stores when State legislation was adopted prohibiting the County's ability to contract beyond those already under contract, which was limited to four stores. ? We recommend that the current practice of contracting out warehouse night- loading operations he expanded to include all warehouse operations. Establishment of a Revenue Authority The ORC also discussed with DLC staff whether DLC could significantly increase its transfer to the General Fund if it had additional independence and flexibility, under the direction of an entity similar to the County's Revenue Authority. This is one recommendation that focuses on increasing revenue, not necessarily through increased consumption, but through an increase in sales and recapture ofout-of-county sales. - 57PDF Image | Montgomery County Organizational Reform
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