Released to the press, June 11, 2012
Second Consolidation Study Confirms: Annual Cost-Savings Exceed $500,000
The Consolidated Government Committee today released its second study designed to project minimum annual cost-savings for a combined Doulas and Saugatuck municipal government. The annual savings projected—$543,145—are close to the figure arrived at in the CGC’s earlier analysis released a week ago. The Michigan-based Plante Moran accounting and business-consulting firm conducted both studies.
The approach taken in this new analysis was to create a zero-based organizational chart for a combined city government’s municipal-overhead functions. Staffing levels and associated costs were then projected based on Plante Moran’s significant experience in municipal-government organization and finance.
To ensure a conservative minimum-savings projection, the study was confined exclusively to municipal-overhead expense, including such departments as city council, city manager, city clerk, treasurer and assessor. As such, no changes in staffing or reduced expense for any city-service department— such as public works, buildings and grounds, parks and recreation—were projected.
Based on the cities’ currently adopted 2011-12 budgets, the total municipal overhead is $1,131,245, with Saugatuck at $478,115 and Douglas at $653,130. The cost projection for the same services under a zero-based consolidated municipal government is $588,100, meaning annual savings would be $543,145.
Plante Moran concluded: “We are reasonably confident that a combined city could be administered for about $600,000 annually, resulting in annual savings of well over $500,000, or about $250 per resident."
Commenting on this latest study, CGC chairman, Travis Randolph, said, “We now have a second study confirming cost-savings in excess of a half-million dollars every year. This adds to our confidence that consolidation makes sound financial sense for Saugatuck and Douglas.”
A full copy of the study is presented below.