The Six Sigma Deficit

28 Jul

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In running the county like a business, Chris Collins has strong-armed his way into a projected $36 million deficit for 2011.

I wonder how much the deficit would be without Six Sigma?

In implementing lean Six Sigma viz. county processes, he may have streamlined some of them, but ask anyone in county government to affix a dollar figure thereby saved, and they can’t.

The implementation of Six Sigma, which hasn’t resulted in any quantifiable dollar savings for the county, cost the state and county hundreds of thousands of dollars in training and personnel.

Back in 2004, when the county faced a $200 million shortfall, then-County Executive Joel Giambra tried to strongarm the populace into choosing between an austere “red” budget and a tax-hikey “green” budget, which preserved the status quo.

In 2011, we won’t have that luxury. Mr. Collins will have chosen the “red” budget for us.

All that being said, here is the real problem I have.

1. None of this is a surprise. It was reported on as long ago as January, when the Control Board and Collins discussed whether 2011 would see a $50 million or $23 shortfall.

2. The fact that we’re right back to where we are in 2004 – 2005, with respect to the way in which the county handles its finances – in this case with a so-called “Control Board” is phenomenally disappointing. Nothing’s changed. The whole county government construct must be abolished as a redundant tax-sucking anachronism.

Three Rs? He hasn’t reformed, he hasn’t rebuilt the economy, and he hasn’t reduced taxes. Instead, he’s reaffirmed the fact that counties are the needless micromanaging middleman of New York State government.

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27 Responses to “The Six Sigma Deficit”

  1. Peter A Reese July 28, 2010 at 8:52 am #

    Alan, you have nailed this one. From the beginning, I suspected that Collins’ Six Sigma program was just smoke and mirrors. He ignored the new cost/unit of service disclosures required by the 2006 Charter revisions and embarked on a campaign of BS. WTF are the savings? Why can’t he show some real cost reductions? Cutting out funded programs his neighbors at Spaulding Lake don’t need (WIC, health clinics and day care) hasn’t reduced my taxes. If we were running the County like a business, we would fire this guy.

  2. Mike in WNY July 28, 2010 at 9:21 am #

    With respect to Six Sigma and the deficit, correlation is not causation.  Government is not in a position to rebuild the economy, it is the problem.  Until NYS dramatically reduces spending and taxes, it will not matter if we have a County government or not.

  3. Derek J. Punaro July 28, 2010 at 11:01 am #

    I was going to say that there’s no excuse for not posting Six Sigma results since measurable results are core to the methodology, but when I went to erie.gov right there on the home page is a link to a 32 page paper on Six Sigma.

    The first round of
    improvement projects alone – which included improving fleet management,
    decreasing overtime and more – saved $2.2 million in 2008 and is expected
    to produce $2 million in 2009 savings. With subsequent waves of projects
    and more people being trained in the methodology, the savings will continue
    to grow. It is estimated that projects from 2008 until fall 2009 will save $5
    million in 2010.

    Spending on Lean Six
    Sigma vs. Savings for
    2008-2009
    Erie County will spend
    approximately $700,000 on
    Green, Yellow and Black Belt
    training, plus the Director of Six
    Sigma’s salary.
    Erie County savings, as a result
    of improvement projects, are
    approximately $6 million.

    And then there’s 9 pages of results.

    And then there’s this page with completed and current projects.

    So I think your assertion that there aren’t any quantifiable savings is patently false.

  4. MillardFilmore July 28, 2010 at 2:31 pm #

    Obviously part-time bloggers get a justifiable pass when it comes to hard-core fact checking and the like, but the fact that Punaro was able to find the Six Sigma cost savings on the front page of the EC website is fairly amazing. Pundit – did you get spend 5 seconds checking out your claim before making it or, instead, b/c Collins is a republican did you feel you had all the ammunition you needed to criticize him.  

    How about when the tea party knuckle-draggers/know-nothings make absurd claims based on no facts whatsoever. I bet BP would have sharp words for them. 

    • Alan Bedenko July 28, 2010 at 2:41 pm #

      Oh, I saw the alleged cost savings and I know that Collins thinks it’s true. I also know that evidence exists to rebut the notion that Six Sigma has saved one red cent.

      I’d love to see Collins’ claims audited. Wouldn’t you?

      Have a great day!

      • MillardFilmore July 28, 2010 at 6:06 pm #

        Your third and fourth paragraphs in the post claim no one in county government can affix a dollar amount to the savings created by Six Sigma and claim there has been no “quantifiable savings.”  Then, when someone points to the website which quantifies and affixes the savings to Six Sigma, you say you knew about those savings estimates but, in your mind, the real issue is those results haven’t been audited.   And you have evidence that they aren’t legit.  

        If you were genuinely trying to communicate that Collins’ approach has been unproductive, I think it would have been more persuasive to a ) cite the website which shows the alleged savings and b) offer this ‘evidence’ of yours that refutes these savings estimates.  Instead, it looks like you didn’t know about the savings estimates and, now that the’ve been pointed out, you’re simply going to say they are illegit because they didn’t come from your side (or your boy Poloncarz).  

  5. Brian Castner July 28, 2010 at 2:49 pm #

    Well, if everyone we disagree with is just a liar now, then what’s the point.

    I think Collins gets a pass on the size (not the existence) of the budget deficit. It is true that everyone, including Collins, has said that the hole is coming . . . which is why he’s been hoarding stimulus money to fill it. But the size is another matter. Why does he get a pass? Because his best friend, Mark Polancarz, gives him as much of a one as he politically can. What I read, from the News reports alone, is that Polancarz basically said “Wow, yeah, those sales tax numbers are way down and this is worse than we thought.” Mark pops on here from time to time, so please correct me if I am wrong.

    • Mark Poloncarz July 28, 2010 at 8:36 pm #

      Brian: when i issued my report on the proposed 2010 budget and four year plan last October I noted that the four year plan was significantly out of balance and the county executive’s gap closing mechanisms did not work. As I stated on page 3 of the report:

      “This office believes the revised Four Year Plan’s projections of gap closing measures are
      unattainable in their current form. We believe key assumptions on revenue are not attainable.
      We believe alleged savings initiatives are not supportable by the data provided by the
      administration in the Budget/Four Year Plan. Some of the Collins Administration’s proposed
      gap closers for 2011-2013 are completely outside of the County’s control, not supported by
      factual data, or not possible under the County’s current fiscal situation. The Four Year Plan
      submitted for 2010-2013 clearly demonstrates that the County will be in a difficult fiscal position
      in 2011 and future years.”

      The report can be found here: http://www.erie.gov/comptroller/pdfs/2010_Budget_Report.pdf. We knew last year that the 2011 budget was in serious trouble, and so did the administration. But our office knew that the gap closures were not valid and noted it, resulting in much criticism from the administration (but not the control board which agreed). The administration seems to have finally come to that conclusion as well. Hence they announce a “surprising” $30m + shortfall for next year, which was no surprise to me (though the sales tax numbers for the 1st quarter of 2010 did surprise everyone, including my office).

      By the way, contrary to Ray’s assertion, the only reason we ended last year with a $40m surplus is not because of any one thing done by the administration, or other branch for that matter, but because the county received $40m in stimulus money. In 2010 we are getting $30m, but the stimulus money ends in 2010 resulting in the huge potential deficit for 2011. If we didn’t receive the stimulus money we would have been facing significant shortfalls for last year and this year. So the pot of gold runs out after 2010.

      • Ray Walter July 28, 2010 at 10:18 pm #

        That isn’t the only reason we had a surplus last year and you know it. Every other County in the state received the same assistance from the federal government but most of them ended up with big budget deficits. The difference in Erie County was responsible budgeting and good management.

      • Paws July 29, 2010 at 6:56 am #

        Ray is partially right, it wasn’t JUST the stimulus funds, it was also the property tax increase Chris Collins gave us.

  6. Ray Walter July 28, 2010 at 3:06 pm #

    If you look past your blind hatred of Chris Collins and all things six sigma (ironic that there is an advertisement from Villanova to get six sigma certified next to your post), your concluding sentence, (“Instead, he’s reaffirmed the fact that counties are the needless micromanaging middleman of New York State government.”) is on target. Faced with the reality of County government in New York, what would you propose be done? Collins has done a good job of holding the County budget under 1% growth since he has been in office. This despite ever increasing costs imposed on the County from the State and the normal increases in labor costs and materials. It seems you are lamenting the fact that Collins is not proposing a tax increase? In my opinion cutting spending is the only reposnsible thing to do.

    • Alan Bedenko July 28, 2010 at 3:20 pm #

      I didn’t offer an opinion regarding whether taxes should be raised or spending should be cut. To my mind, the entire entity of county government should cease to exist, thus saving millions in one fell swoop.

      But what troubles me here is that in the almost three years Collins has been in office, his three Rs remain unfulfilled. He hasn’t remade county government into something that runs efficiently. He has instead become a hyperpolitical character no different from any other local hyperpolitical characters.

      If we are, for all intents and purposes, right back to where we were during the budget crisis of the last decade – and this with all of our Six Sigmas and hard/soft control boards, then what has been accomplished? What reform has there been? This was foreseen – why wasn’t it planned for? Long ago? Why are we paying a control board and Six Sigma experts millions of dollars for essentially nothing?

      • Ray Walter July 28, 2010 at 3:35 pm #

        You’ll get no argument from me about the uselesness of the Control Board or the need to rethink the way county governments work in New York. But I disagree with the idea that Collins hasn’t reformed Erie County. Gorski financed county government through double digit tax increases year after year. Giambra did it through budget gimmickry and one shots. Collins has been able to produce surpluses without either. His four year plans have shown potential deficits in the out years since day one. He has paid off debts and fixed deceptive budget practices that were part and parcel of previous administrations. He has made cuts and contained costs in each of his budegts. This was all done in anticipation of these impending deficits.

  7. Matthew Ricchiazzi July 28, 2010 at 4:22 pm #

    To anyone who understands what Six Sigma is and what it does, it is obvious that the person posting this has no idea what he/she is talking about. This is the most illogically constructed agrguments I’ve ever wasted my time reading.

  8. Jordan July 28, 2010 at 6:06 pm #

    I have said this before, and I will say it again. County government is ideally suited to replace the town and city governments. The only reason coutny government is redundant right now is because we haven’t given it the power to really do anything. I agree that governments in WNY need to be abolished, but it is the towns and cities that need to go, the anachronistic and arbitrary (in the modern world) town and village borders create far more useless government bodies that deserve to be abolished than the relatively smallc ounty government.

    Too bad no one wants to have that conversation.

  9. Alan Bedenko July 28, 2010 at 7:38 pm #

    Even assuming that Collins’ figures are accurate, then the deficit for 2011 would be $2MM higher.

    You’re all right! It makes ALL the difference.

  10. Ward July 28, 2010 at 8:53 pm #

    Sounds like a Democrat criticizing a Republican for not saving more money.
    At least Alan’s no longer offering Democrat alternatives.
    Wake me when it’s over.

  11. Kevin Hardwick July 28, 2010 at 9:54 pm #

    I have no desire to get sucked into a debate over the value of six sigma in county governemnt, although I am hoping to do some research on the topic. What baffles me, though, is what caused the legislature’s Democrats on June 24th to try to spend $12.5 million of the surplus by passing a pork barrel resolution. Did they not see the warning from the comptroller?

    • Paws July 29, 2010 at 6:57 am #

      Hmm, had you seen the warning before you voted to increase the Legislature’s budget on your first session in office?

  12. Derek J. Punaro July 28, 2010 at 10:06 pm #

    I don’t expect Alan to suddenly turn pro-Collins (frankly I’m indifferent towards him) but I think it’s disingenuous to mock a methodology, or the introduction of ANY methodology to government in an attempt to cut costs and streamline processes. Six Sigma and its variants are proven methodologies that companies use repeatedly to reduce waste and cut costs. There are ample opportunities for like methodologies to be used in a government setting where there is often the appearance of no logic to work processes and the frequent criticism of wasted money. The process sheds light on the reality of the situation, collects data, enacts change, and measures again to see if there are results. The audit is built into the process. Someone can always make an argument that a factor other than the changes made as part of the process contributed to the change in results, but unless it’s obvious it’s probably not likely. Often the documentation of the process itself is enough to find clear changes to make.

    So, the opinions of whether or not Collins is doing a good job or not are just that – opinions fueled by a number of different factors. But the various facets of government need more scrutiny using processes like Six Sigma, not less.

    • Alan Bedenko July 29, 2010 at 6:24 am #

      If Six SIgma makes, e.g., the process to rent a park shelter more streamlined, then it frees up county park shelter reservationists to reserve more of the county’s finite number of shelters. You can assign a dollar savings to that, but it’s a make-believe number. IOW, it’s not like there’s more money in the county coffers thanks to those process changes.

      • Derek J. Punaro July 29, 2010 at 8:31 am #

        … or frees up people to do other work. Which leads to needing less people to do the same job (cost savings) or increased workload capacity (better services).

  13. King James July 28, 2010 at 11:48 pm #

    Let’s just admit what a lot of this is leading to…. COLLINS VS. POLONCARZ IN 2011.

  14. George Costanza July 29, 2010 at 7:19 am #

    Collins has made a lot of claims to a lot of people about alleged six sigma savings. There have been quarterly reports to the County Legislature, ECFSA and a lot of self-important statements in his taxpayer newsletters about alleged savings. However, none of it ties out, or can be found in the county budget books. For instance, and I have heard this example cited before, he claims hundreds of thousands of dollars of savings in overtime in the county’s buildings and grounds division from a six sigma project, yet we’ve seen county comptroller reports and warnings and articles in the Buffalo News pointing out that overtime in that division continues to go massively over budget – something like 100% increases over budget. So color me a lot skeptical about six sigma and REAL savings that is quanitifed in budget account lines.

    Also, if six sigma is really saving all this money, how come it is no longer used by the Collins Administration and accepted by ECFSA as a so-called gap closer in the four year financial plans? Just because the county executive says something does not make it reality. I do believe that six sigma can lead to process improvements, such as, for instance, reducing the amount of time it takes a county caseworker to process a claim for public assistance. But quantifiable savings that is traced to budget lines has yet to be found.

  15. King James July 29, 2010 at 10:56 am #

    COLLINS VS. POLONCARZ IN 2011

Trackbacks/Pingbacks

  1. Run Government Like a Government | WNYmedia.net - July 30, 2010

    […] The Six Sigma Deficit (wnymedia.net) […]

  2. Chris Collins and the Dictatorship of Petty Bureaucracy | Artvoice Daily - October 17, 2012

    […] void”, Collins decided simply to refuse to fund things he didn’t like. Nevertheless, in running government like a failing, closely-held business, Collins created new jobs for pet projects, didn’t cut spending overall, and was facing a […]

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