County considers credit options
July 3, 2008 · Updated 1:40 PM
"Island County leaders are considering a leap into the brave new world of electronic financing and one-stop shopping.County commissioners and department heads on Wednesday were apprised of a new commercial credit plan that could streamline the way the county conducts business, from front-end vendor contracting and purchasing to back-end inventory and fiscal accountability.JP Morgan Chase pitchman Morgan Barney said the plan, which has been adopted by the state auditor's office, along with King, Pierce and Thurston counties, among others, would work like this: Rather than cutting individual checks, Island County would pay for all expenses with a single credit card issued by Chase. The company claims that such direct billing eliminates mountains of paperwork and cuts the traditional cost of processing purchases by as much as $190 each.Barney also said the card provides a unified system of online maintenance and reporting, as well as putting in place such front-end safeties as purchase limits, personal accountability (i.e. who can use the card) and vendor coding (i.e. where particular purchases are occurring). There would be no annual fee; rather, the card is paid for by Chase eating up vendor discounts that typically accrue to the buyer.Discounts on government purchases typically range between 1 and 3.5 percent.Along with single-payer purchase cards, Chase also offers individual travel cards that can be issued on a per-use basis to county employees.The benefit of such accounts, Barney claimed, is that employees need not max out their own credit limits when doing government business abroad.Public Works Director Larry Kwarsick said he has been pushing for the county to explore the plan at least on a pilot program for about 5 years or so.These are standard practices that businesses use, said Kwarsick, who argues that Island County should be taking advantage of basically state of the art systems that are out there. Governments are continually asked to do more with less.Kwarsick argues that the single-card system provides an advantageous balance between efficiency and risk that would result in elected officials having more time to do their jobs ... in the way the public would expect them to be done. The actual savings (of the new system) ... comes from the decrease in the work effort involved in purchasing and making payments.Not everyone in county government is so sanguine about touted benefits of the single-card system.It seems to me there's no real advantage to the county, said Commissioner Mac McDowell. As yet, I don't see (the potential for) any reduced work.McDowell also finds the average savings-per-purchase figure offered during Barney's presentation to be trumped up. If I thought we could save $190 for every transaction, he said, I would jump on it in a second. McDowell said such a kind of bogus figure would be realistic only if efficiencies led to employee lay-offs. As with Kwarsick, however, he doesn't see that happening under the single-card system.In fact, said McDowell, if you now have this new thing you've got to deal with, there may even be additional work.There is always resistance to change, said Kwarsick. He quickly dismissed the notion that any ambivalence toward the plan is essentially technophobic or Orwellian in nature. I wouldn't say that (resistance) is electronically based in this case, Kwarsick said, pointing instead to the fact that everyone's always comfortable with the (established) way business is done. In other words, it's hard to teach an old dog new tricks - especially when money, and the way it's spent, is involved.I'm suggesting there are different ways of doing business and we should always and ever investigate those, said Kwarsick. He noted that, in this instance, the county can choose to adopt the single-card program on a trial basis at any level of government function - either within a chosen department or in toto. Either option, Kwarsick added, comes with some basic parameters that are safeguards put in place by the state government itself.With all those opportunities, said Kwarsick, it's hard for me to understand resistance.McDowell, for his part, wants more details on how the single-card plan differs from the system currently in place, especially in the way of auditing procedures. He's doubtful that any significant change can take place in the way the county now keeps track of spending. McDowell argues that with any given plan, be it single-card based or otherwise, an expense receipt labeled miscellaneous still needs to go through careful channels of identification, itemization and recording.If we're going to keep the same level of auditing responsibility, said McDowell, there may not be any savings in changing systems. And, he adds, Certainly fraud is a real concern. You don't want that happening.I think the court's still out, McDowell said of the possible overall switch to Chase's single-card plan. We just don't have enough information on this. "