Long Island school and government officials want to consolidate financial resources
School and government officials on Long Island want to pool their resources and financial investments to operate more efficiently and tap into higher interest rates in what they say could become a model for the rest of New York State. Under the proposal, the county would encourage individual school districts to consolidate their cash on hand and long-term investments with the county in a pool managed by the New York State comptroller, Thomas P. DiNapoli, who oversees the state’s pension funds. Called the Shared Services Initiative, the plan would require approval of the state legislature. While such an investment consortium of schools and government would be a new experiment in New York, it has been undertaken elsewhere to mixed results. In Orange County, Calif., the treasurer for years managed money for dozens of school districts and cities, yielding higher rates of return than they could have achieved individually, but the fund’s excessive borrowing and risky investments caused its value to plummet, leading in 1994 to the largest municipal bankruptcy in the country’s history. "There are a number of issues to work out, but this is a good idea that could potentially save taxpayers millions of dollars," Mr. DiNapoli says. "I’ll continue working with Steve [Levy, Suffolk County executive,] to make this proposal a reality." The proposal would also seek to reduce health insurance costs by combining school districts, and possibly the county and municipal governments, into a single group to buy and administer health benefits. Mr. Levy estimates that leveraging benefits for a larger number of employees could save taxpayers $20 to $30 million a year. In addition, the proposed consortium would seek to allow school districts to benefit from county contracts for skilled labor and public works projects. School officials say that a unified procurement process would eliminate duplicative administrative and consulting costs. The consortium could also share information technology, maintenance and operations services, and energy and environmental resources.
New York Times
By Winnie Hu
[Full story]
[Editor’s Note: See the county executive’s press release, below.]
[Suffolk County Executive press release on Shared Services Initiative]