Tag Archives: savings

Cate on Jones Lang LaSalle Deal: Minor Miscues, Major Savings

Mark Cate, the governor’s chief of staff, acknowledged to state legislators Tuesday that mistakes were made in handling a multi-million dollar contract for management of state buildings but declared the overall effort a huge success that other states now want to emulate.
Appearing before the Legislature’s Fiscal Review Committee, Cate said Gov. Bill Haslam’s administration entered “unchartered territory” in contracting with Chicago-based Jones Lang LaSalle with inherent “complications and confusion” occurring at times.
One mistake was in not being sufficiently transparent about the move to legislators and the public, he said. Another was not drafting the original, competitively-bid proposed contract to reflect the maximum value to the winning company, he said, instead of listing it just as a $1 million study and later changing the amount upwards as new duties were added.
Cate also said officials have decided to have “a fresh set of eyes” conduct another review on one of JLL’s recommendation – demolishing the Cordell Hull building, which stands next to the state Capitol and is one of six major structures statewide slated for demolition as “functionally obsolete.” This has triggered some controversy in Nashville because of what Cate called the building’s “perceived historical significance.”

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New State Procurement Office Claims Savings of $113 Million

While the head of Tennessee’s newly centralized procurement system provided examples to legislators of savings to taxpayers last week, declaring they collectively total $113 million to day, state Rep. Jeremy Faison offered another example that didn’t sound so good.
Chief Procurement Officer Mike Perry’s examples included a dozen “ballpoint stick pens” that previously cost the state $1.55 for a box of a dozen versus 47 cents today and a ream of paper, previously $3.10, now $2.77.
Office supplies counted for $8 million of the projected $113 million in savings, a figure that includes comparing new multiyear contracts with old ones as well as some one-time purchases. The biggest projected savings, $33 million, was on Oracle software through “strategic sourcing,” which involves negotiating with current contract holders.
In the latter case, the vendor initially said that new software needed to bring TennCare computers into compliance with new provisions of federal law would cost $39 million, Perry said. After the negotiation, the price was $6 million.

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State Throws in $40 Million Towel on Vehicle Tracking Computer System

State officials have quietly pulled the plug on an effort to replace a complex by Solid Savings” computer system used to track vehicles in Tennessee, after spending more than a decade and at least $40 million on development, reports Chas Sisk.
The Department of Revenue confirmed this month that it has ended an ambitious project called the Title and Registration User’s System of Tennessee, or TRUST, after determining that it would never reach its goal of replacing the state’s aging mainframe-based system.
The project, which would have created a new network linking the offices of all 95 county clerks in Tennessee, is one of several information technology overhauls launched by the state in recent years, only to run aground.
Although largely hidden from public view, IT travails have been a common thread running through recent failures at state agencies, including problems at the Department of Human Services, the Department of Children’s Services and the Department of Labor and Workforce Development.
State officials caution against oversimplifying the situation. They note that many large IT projects undertaken by private corporations fail as well.
But Gov. Bill Haslam’s administration has responded by overhauling the state’s approach to IT. Last month, 1,600 IT workers were asked to reapply for their jobs, and the state has dedicated $4 million to retraining this year alone.
Mark Bengel, the state’s chief information officer, said that many state workers in the fast-changing IT sector have let their skills fall behind — to the point where they no longer have the expertise needed to bid out projects or to supervise them once they were awarded.
“IT is changing so fast and becoming so complex,” Bengel said in an interview last week. “Staffing hasn’t kept up.”
The TRUST project did achieve some of its goals. Car owners in most counties can renew their registrations online, and a complicated system that forced county clerks to memorize dozens of codes has been replaced with easier-to-use menus.
But the project hasn’t accomplished its main goal: replacing the state’s 25-year-old mainframe with a modern system of interconnected computers. Revenue Commissioner Richard Roberts instead decided to try to keep the mainframe working for a few more years, and then start a new project once the IT sector evolves further.
…The TRUST project spans three administrations, starting at the end of Republican Gov. Don Sundquist’s, running throughout Democratic Gov. Phil Bredesen’s and ending more than a year into Haslam’s. The project has passed between two sets of government agencies and has gone through a major restart.

State Offers ‘TNStars’ College Savings Plan

By Lucas Johnson, Associated Press
NASHVILLE, Tenn. — A new college savings plan in Tennessee aims to help more students afford a higher education, state officials announced Tuesday.

Gov. Bill Haslam, joined by the state treasurer and both legislative speakers, announced the “TNStars College Savings 529 Program.”

The governor called the plan a “great opportunity for Tennesseans who want to attend college.”

“There are a lot of issues around why Tennessee is behind the national average in college attendance and college graduation, but affordability and access is at the heart of those issues,” he said.

The plan takes its name from section 529 of the Internal Revenue Service code, which authorized the creation of tax-advantaged plans in 1996.

To encourage enrollment in the program, Tennesseans who open accounts with at least $50 will receive a one-time $50 match from the state. Those who roll over their account balances from other 529 college savings plans, including the state’s prepaid plan, will get $100.

The program also offers federal tax-free earnings if the money is used for higher education expenses, and low fees that compete with some of the top-rated plans in the nation.

The state is spending more than $3.3 million to market the program, including payment to a private marketing firm and television ads.

“In this highly-competitive and changing economy, it is important that we keep our children focused on achieving a higher education and post-secondary education that qualifies them for the 21st century specialized workforce,” said state Treasurer David Lillard.

About four years ago, the state partnered with Georgia to start a college savings plan that allowed families to put away money for their children’s higher education expenses.

The new one is specific to Tennessee and allows participants to control how they manage their investments. The plan has an age-based option in which investments are more aggressive when children are young and become more conservative as they approach college age.

Rich Rhoda, executive director of the Tennessee Higher Education Commission, told The Associated Press earlier this week that the new program is more viable.

“There has been one (college savings program) in place in Tennessee over the years, and this is basically breathing new life into it,” he said. “This is where families can start saving for their children’s, grandchildren’s college education way ahead of time. It’s a safe investment.”

Mark Schneider is vice president of the American Institute for Research and the author of a recent study that examined how much graduates from Tennessee’s colleges and universities earn their first year in the workforce. He said Tennessee’s new plan is a good idea.

“It’s all about college affordability and debt,” he said. “So, as colleges become more and more expensive, parents and students are looking for more and more ways to finance college. And the 529 plan is one way of trying to accumulate … the money that you need to send your kid to school.”

Note: News release below.

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DHHS: Obamacare Saved Average TN Senior $550 on Drugs

News release from U.S. Department of Health and Human Services:
As a result of the Affordable Care Act – the health care law enacted in 2010 – seniors and people with disabilities in Tennessee have saved $91.2 million on prescription drugs since the law was enacted, Health and Human Services (HHS) Secretary Kathleen Sebelius announced today.
Seniors in Tennessee saved an average of $550 in the Medicare prescription drug coverage gap known as the “donut hole” in 2012. Nationwide, nearly 5.4 million seniors and people with disabilities have saved over $4.1 billion on prescription drugs.
In addition, during the first seven months of 2012, the new health care law has helped 611,511 people with original Medicare in Tennessee get at least one preventive service at no cost to them.
“The health care law has saved people with Medicare over $4.1 billion on prescription drugs, and given millions access to cancer screenings, mammograms and other preventive services for free,” said Secretary Sebelius. “Medicare is stronger thanks to the health care law, saving people money and offering new benefits at no cost to seniors.”

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DCS Sees Savings in Dropping Contract Workers, Hiring Staff

Tennessee Department of Children’s Services is eliminating its contract with an outside agency that trains social workers, reports WPLN.
DCS is one of several state departments finding savings by doing more of its work in-house. The Tennessee Center for Child Welfare – which is affiliated with MTSU – plans to lay off 45 employees. It had a $14 million annual contract to provide training for DCS case workers.
Spokesperson Molly Sudderth says DCS can save several million dollars if it does its own training. That does require adding roughly 30 permanent positions. She expects many will be filled by longtime social-workers looking to advance their careers with the state.
“This gives them an opportunity to put their unique skill set, which is experience with those families, to good use training new young employees who might be coming up.”
Other state departments are also moving functions in-house to save money. TDOT Commissioner John Schroer says some of the design work for roads and bridges is returning to state employees, who can sometimes do it for half the cost. He says spending on consultants had tripled in a matter of five or six years.

Tennessee History: When a Missed Bus Stopped Daylight Savings Time

Once upon a time, the Tennessee Legislature opted out of Daylight Savings Time because state Rep. I.D. Beasley missed a bus to Nashville. Sam Venable, after talking with the Legislature’s librarian and the late legislator’s nephew, tells the tale in a News Sentinel column.
An excerpt:
“One morning, Uncle I.D. walked down to the bus station in Carthage, just like always. But the bus was already gone. He’d forgotten about the switch to Daylight Saving Time. Made him mad as a hornet.”
For Hizzoner Beasley, this was a call to arms.
A carryover from World War II during that era, DST was never popular with farmers. Beasley controlled the rural bloc in his part of the state, so it was a simple matter for him to draw up a bill abolishing the practice and guide it along to final approval.
Eddie Weeks, librarian for the Tennessee General Assembly, did some archival digging for me — and sure enough, he found Beasley’s bill, which was signed into law on Feb. 4, 1949, by Gov. Gordon Browning.

State Refinances Bonds; Saves $34 Million in Interest

News release from comptroller’s office:
The State of Tennessee refinanced $456 million in general obligation bonds last week that will save taxpayers more than $34 million in interest costs. Refinancing the bonds in this fiscal year created $34,031,900 of present value savings that will be realized over the life of the bonds, which mature annually through fiscal year 2028. The state also refinanced debt last fall that will produce $3,287,600 in present value savings over time. The actual amount of savings is higher overall in comparison to the amount of present value savings.
“Just as it sometimes makes sense for homeowners to refinance their mortgages when interest rates are low, we look for opportunities to refinance portions of the state’s debt when market conditions are advantageous,” Comptroller Justin P. Wilson said. “I am very pleased that we were able to refinance these bonds and create a significant savings for our taxpayers. This is one example of how Tennessee government is efficiently managing its finances on behalf of its citizens.”

Savings of $33 Million Claimed Through Change in Parole Practices

By Lucas Johnson, Associated Press
NASHVILLE, Tenn. — A report on parole practices cites a collaborative effort between the Tennessee Board of Probation and Parole and the state Correction Department as an effective way to assess the needs of offenders when resources are limited by budget restraints.
The report released in August noted the focus of the departments’ Joint Offender Management Plan in 2009 was to reduce correctional costs to the state, “particularly through reducing parole and probation revocations.”
To do that, funds were shifted from the Department of Correction to the Board of Probation and Parole to support treatment interventions in the community through a network developed by the Tennessee Department of Mental Health and Developmental Disabilities.
The overall collaboration saved the state $33 million within its first year, said state officials, who launched the program with the intention of saving taxpayers money, reducing recidivism, preserving expensive prison beds for the most dangerous offenders and making communities safer.
“We were able to use their people instead of going through the time and expense of having to contract service providers in the community ourselves,” parole board spokeswoman Melissa McDonald recently told The Associated Press in reference to the mental health network.

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Storm Shelter Tax Break

NASHVILLE, Tenn. (AP) — Storm shelters may qualify for state sales tax savings under recently passed legislation.
The Tennessee Department of Revenue says Tennessee taxpayers who purchase qualifying building supplies to construct storm shelters between July 1 and Dec. 31 can save up to $2,500 on sales tax paid on certain construction supplies.
Individuals can file a claim for refunds for sales tax paid on these items. They also may claim a refund for tax paid by certain contractors.
Items eligible for a refund include Sheetrock, insulation, flooring, construction tools, paint materials, hardware, brick, concrete block, lumber and other building materials.