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February 6, 2013
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Proposal: Potential for $3 million in savings for IVGID for 2013-14 fiscal year

INCLINE VILLAGE, Nev. - Touting it as an endeavor to "evolve IVGID into a permanently better and more affordable service provider," a pair of residents who boast an ability to find potentially as much as $3 million in savings is asking for permission to take control of the district's accounting books for the upcoming 2013-14 budget.Kevin Lyons (owner of Polymath Enterprises LLC) and Lee Weber Koch (owner of Weber & Associates) presented their proposal - "Vision 2013: Reengineering and Revitalizing Our District" - at last Wednesday's board of trustees meeting, where both officials and residents offered passionate feedback on whether the district should enter into a contract to allow Lyons and Koch to begin what they say is imperative legwork.According to the proposal - which trustee Jim Hammerel requested be put on the agenda - IVGID is projected to lose $4 million across its venues by the end of the current fiscal year on June 30, 2013. Because of this, Lyons' goal - with Koch's assistance - is to implement a system of outcome-based budgeting that will prioritize what each district venue should focus on "in order to deliver the most value to our community."The proposal is modeled after an IVGID policy adopted in 2008 called "Budgeting for Results and Outcomes," a policy Lyons said has not been carried out in recent years by the district's accounting staff."The idea is you start from a zero base, a clean slate. We don't want to do more with the same, but do things differently," Lyons said last week.By allowing Lyons to take over financial planning for the district, according to the proposal, IVGID will have a outcome-based budget with as much as $3 million or more in savings prepared for the 2013-14 fiscal year (which starts July 1) and put the district on a successful financial track by the end of 2013 to make annual savings for years to come.This change in district finances is needed, according to the proposal, because "community discontent has been recently expressed through the election of five new IVGID trustees in the last two elections."

The proposal outlines a deal that would last through the end of the year and name Lyons - a self-described "governance and efficiency expert" - the main contractor for services, with Koch as a subcontractor of his. If signed, IVGID would pay Lyons $10,000 for the initial legwork he needs to perform to identify specific savings.The contract includes a mutual termination option on or before Feb. 28. If IVGID does not opt out, Lyons would be contracted for the rest of the year, and IVGID would have to pay him an additional $20,000 by March 1 that would be credited as prepayment for expected savings found in the 2013-14 budget.In a performance-based mindset, Lyons would earn 6 percent of eventual savings, capping at the $3 million mark. Therefore, he could make a maximum of $190,000 - the initial $10,000, plus $180,000, which is 6 percent of $3 million. His compensation would be covered by projected savings and actual savings measured from July 1, 2013 through July 31, 2014.If savings go beyond $3 million, the cash would be donated to an IVGID account that would pay for new technology and branding initiatives, to be allocated and managed by Lyons.Among other conditions, it's proposed that Lyons would officially report to the IVGID Board of Trustees and/or a two person subcommittee of trustees.

During his presentation last week, Lyons urged the board to sign the contract due to timing of the 2013-14 budget.According to the state law, the IVGID board must approve a budget by May 16, 2013. By signing the contract and allowing him to propose exact savings, Lyons said it will give him enough time to work with staff to meet that deadline."If we don't move now, then we throw away a whole budget cycle," Lyons said. "Then you've lit several million dollars on fire, and that several million can solve a lot of problems."Trustee Joe Wolfe said while it may be a good idea down the road, now is the wrong time considering the board is tasked with hiring a new general manager this year."I'm certainly all for increasing revenue and cutting expenses, but I believe we can do that on our own - with (Lyons') help at a later date," Wolfe said. "Our primary purpose right now is to replace the general manager."Board chair Bruce Simonian agreed."I think we need to slow down, empower our existing staff, and first and foremost hire a new general manager," he said.Trustee Jim Smith, however, was in favor of moving forward quickly."The budget, it's pretty complicated, and I think we need help ... I think we need a fresh set of eyes on this," he said. "We have two people invested in our community, and $10,000 is a very small investment, less than one-tenth of 1 percent of our budget."

Roughly 15 IVGID residents commented on the idea, with some in favor and some against - while others warned the board to not look at it as just a $10,000 contract, especially if the district does not opt out by Feb. 28."I am offended that it appears this is only being pushed as only a $10,000 item - this is a full-year proposal," Deborah Prout told the board. "I think it's a travesty. I urge you to do your homework. You've been elected to this job ... please dig deeper and try a little harder."George Del Carlo - who ran on the same ticket of Smith and Hammerel during the 2012 election - endorsed the idea."Anything we can do to save is a good thing, so go ahead and implement it," he said.Resident Will Brigham shared a similar view: "In business, if you can create a position that can pay for itself, then it is advantageous to that business."Resident Paul Reynolds, however, took a different approach."I'm concerned the board is on the wrong track. When you look at it, what in the heck is wrong with IVGID? I think you need to look at what is good with IVGID first," he said. "I think you're way out of bounds (to consider the proposal). It's an insult to the general manager and an insult to staff."Also during public comment, IVGID Engineering Manager Brad Johnson voiced concern over the proposal."This is rushing the process. I'm not opposed to the ideas, but what are the measured successes? There's no defined scope of work," he said. "In the end, a $10,000 check is what's been awarded. I strongly believe this is a dangerous precedent."

The board did not vote on the contract, instead deferring to General Manager Bill Horn's judgment. According to IVGID policy, the GM has the authority to enter into contracts or sign purchase orders less than $25,000 without board consent.During the meeting, Horn said the district would be "foolish" to not consider potential cost-cutting ideas from the public, and considering the potential for savings, he would not have a problem speaking with Lyons and Koch."I will always listen to people who feel they can broaden our breadth of understanding as a district, without there being any cost other than my time," Horn said in a follow-up interview this week. "I encourage anyone to share with us if they feel there is an opportunity to save money, either by enhancing revenue or lowering operational costs."One of the concerns Horn mentioned last week was the clause in the contract that Lyons would report to the board, and not the general manager, as it would essentially take IVGID staff out of the financial planning process and leave the board accountable for budget decisions.According to a report to the board, Horn said if trustees believe staff requires outside assistance, he supports a process that would start on July 1, 2013, working in collaboration with the new GM, with goal of changes being made for the 2014-15 fiscal year budgets.As of Wednesday afternoon, he has yet to make a decision on the contract.Horn said he plans to update the board on his talks at next Wednesday's meeting, which starts at 3 p.m. at 893 Southwood Blvd.

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Tahoe Daily Tribune Updated Feb 13, 2013 07:52PM Published Feb 6, 2013 10:50PM Copyright 2013 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.