Ducey spends to make state lean
$29M used to drive up government efficiency
Arizona Gov. Doug Ducey, a former business executive, took office more than three years ago promising to make state government leaner and more efficient.
Officials within his administration say he’s done just that through his Government Transformation Office.
But the effort hasn’t come cheap: His administration has hired outside consultants and added at least 85 state jobs that currently pay on average $77,647 a year, records obtained by
The Arizona Republic show.
Total price tag for Ducey’s Lean Initiative: nearly $29 million.
Kirk Adams, Ducey’s chief of staff, and other state executives said it has been money well spent.
The program uses “coaches” to encourage state employees to identify opportunities to be more efficient and
save money while developing solutions for problems.
Agencies also set goals and use metrics to determine if they’re reached and then celebrate successes.
The new state employees and consultants behind the program have created savings in the millions of dollars and helped state government avoid other costs.
At the same time, they’ve made agencies more responsive to the public, including reducing wait times at Motor Vehicle Division offices from an hour to 24 minutes.
“This is all about changing habits,” said Gilbert Davidson, Ducey’s chief operating officer. “We are changing how people operate, and like anything, you have to invest in that.”
Those investments include Office of Continuous Improvement administrators who are paid up to $140,000 a year, and senior “lean coaches” who can make nearly $100,000 year.
Twenty-three of those employees have also received $89,000 in merit bonuses and some have received doubledigit percentage raises, records obtained under the state Public Records Law show. One Department of Administration executive received bonuses of at least $5,000 for three consecutive years.
The spending to make state government leaner comes at a potentially awkward moment for Ducey as Arizona teachers — among the worst paid in the nation — have called on him to increase their pay up to 20 percent, and held “walk-ins” and other demonstrations to highlight their demands. They are also considering going on strike.
Median pay for Arizona teachers is $46,949.
The governor’s response to teachers until Thursday has been to note the funding that has been added to teacher compensation and to say he anticipates the state budget will provide additional increases.
He surprised everyone on Thursday by announcing he would push for a 20 percent pay increase for teachers by 2020.
Dawn Penich-Thacker, a spokeswoman for Save our Schools Arizona, a grass-roots group pressing for more education funding, said prior to the governor’s announcement that he could have better used the nearly $29 million on public education.
“How you spend your money speaks to your priorities,” Penich-Thacker said. “The governor’s priorities seem to be in polishing his own image.”
Ducey and the Legislature last year gave 1 percent stipends to teachers, who were projected to only receive a 1 percent raise this year. Each of those increases cost the state about $30 million to $34 million.
Ducey now wants to give them a 9 percent raise this year with additional 5 percent raises the next two years.
Ducey’s plan still needs to get through the Legislature, plus there’s no guarantee that future raises will be implemented.
Julie Read, a public school advocate from north Phoenix who has battled Ducey on prison issues, agreed that the governor already should have allocated more state resources to schools instead of his efficiency program.
“It would be cool if he could find volunteers like me to fix stuff for free,” Read said.
State records show the Ducey administration during the past three fiscal years spent at least $13.9 million on consulting contracts with Honsha, Integris Performance Advisors, the Murli Group and Pricewaterhouse Coopers Public Sector LLP.
The state currently is spending $6.6 million on 85 state employees in 13 agencies who act as lean coaches, support staff or administrators to implement the reforms within the Arizona Management System.
Since 2015, Ducey’s first year in office, the state has spent at least $14.7 million on state employees to run the program, according to public records compiled by The Republic.
State agencies involved in the program are: Administration, Child Safety, Economic Security, Environmental Quality, Corrections, Gaming, Health Services, Juvenile Corrections, Medicaid (AHCCCS), Registrar of Contractors, Revenue, Transportation and Water Resources.
Megan Rose, a Department of Administration spokeswoman, said the spending on consultants and new state jobs is a fraction of the state’s $10 billion budget and 33,624-employee workforce.
She added that after consulting with private-sector organizations that have gone through similar “lean transformations,” the cost for Arizona taxpayers could have reached $100 million, pointing out the state did it more economically.
“The return on investment is evident in the success we have already achieved, and the change in culture that we are beginning to see,” Rose said. “Each agency has developed a plan to phase out use of private consultants and contractors as their deployment matures, and we are no longer reliant on external resources.”
State records indicate the program has:
Saved $3 million in “hard dollars” by selling hundreds of vehicles in the state’s fleet management system and avoided another $31 million in costs by cutting the number of cars.
Reduced overtime pay by $4 million at Child Safety.
Cut the number of private-leased facilities from 84 to 63, resulting in $2 million in annual savings.
Consolidated 27 boards and commissions into one building, saving $1.4 million annually.
Created space efficiencies that allowed the state to sell $15.7 million in real-estate assets.
Reduced the number of children in state care by nearly 10 percent.
Cut the time to process applications for residential/living assisted providers from 243 days to 91 days.