Metropolitan Sewer District not OK with all state audit recommendations

Posted at 8:17 PM, Mar 07, 2017
and last updated 2017-03-07 20:54:17-05

CINCINNATI - A state audit of the Metropolitan Sewer District drew some ire from district director Gerald Checco who said — and wrote in his PowerPoint presentation — that "claims of savings by the monitor are nonsense."

His comment came after he shared good and bad news Tuesday morning with two attending members of City Council. The  2016 audit recommended reduced staffing, overtime reductions and outsourcing customer service dispatch, claiming those could save more than $1.9 million.

Checco highlighted areas where the department has already made improvements and cost savings, and explained why other audit recommendations — such as reducing Information Technology staff or outsourcing customer service dispatch — won't work for MSD.

RELATED: Audit says MSD should cut IT staff, outsource some jobs

The audit itself was two-fold: On Feb. 4, 2016, the state auditor's Public Integrity Assurance team initiated a financial audit while the Ohio Performance Team simultaneously conducted a performance audit. Recommendations were given to MSD in February.

Compounding the audit issue and its comparisons to Columbus and the Northeast Ohio Regional Sewer District in Cleveland is the joint operation of MSD. The city handles management and operation while Hamilton County sets rates, adopts rules and approve capital improvement projects.

While MSD can, and is, saving some of that money, Checco and council members said that comparing the joint operation isn't exactly an even playing field.

Councilmember Kevin Flynn said it's clear that "the state auditor is finding a unyielding form of government."

"There has to be a solution out there that will address the findings of the state auditor," Flynn said. "There shouldn't be one running the system and someone else second guessing what needs to be done."

The county/city 50-year agreement comes to an end in 2018, he said, and any new agreements will need to protect the ratepayers, county and city.

Council member Wendell Young, who joined Flynn and Vice Mayor David Mann at the end of the meeting, said "there's no way MSD can continue to operate the way it has. There's a lot of good work in MSD despite the obstacles."

The audit did credit MSD for best practices underway, including reducing the number and cost of contracted staff by bringing those jobs inhouse, ultimately saving $2.2 million in operating costs. The district also has lower costs for customer service and cost per gallon of sewage treatment than peer agencies.

Checco also said they have reduced the size of the passenger vehicle fleet by 19, "four less than the size recommended in the audit." That reduction is about $2,000 more than the $67,900 projected by the audit, he said.

Other recommendations and responses to the audit include:

  • Reduce overtime to the benchmark by the Bureau of Labor Statistics, projected to save $74,200.

    Checco said while MSD would monitor overtime usage, most hours were the result of emergencies. Flynn suggested reviewing whether more staff should be added to save overtime costs, but Checco noted that most hours were in response to sewer backup-emergency calls. "We can't have people sitting on their hands waiting for a sewer backup." Bring paid leave in line with the BLS, eliminating the birthday holiday and renegotiating paid leave. Checco said using BLS to look at time off is not a good comparable and that staff time off compares to peer agencies as well as Hamilton County and the state.

  • Eliminate eight out of 21 IT personnel.

    Again, a wrong comparable, said Checco. He said the audit assumes all IT employees do service desk work, i.e., responding to a report that a computer doesn't work. "The bulk of the staff is not doing service requests," he said, adding that they are developing applications and integrations. He said the department only has 18 full-time employees and the customer to employee ratio is 42.7, higher than the auditor's recommendation of 42.

  • Outsource customer service dispatch to save $237,000.

    Checco said the department already uses a contractor at night to take calls. The difference is that daytime customer service employees also do dispatching and follow-up, something not done at night. "It's apples to oranges," he said. He said once there is a city-wide service call system that should address the issue.