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Ernst & Young engagement to standardize city contracts and KPIs aims for $17 million in FY26 savings
Summary
City staff said the Ernst & Young engagement will support a category management program across eight spending categories and work with departments to refine KPIs; finance staff expects the effort to target at least $17 million in general-fund savings in FY26.
City finance staff updated the Budget and Fiscal Affairs Committee on July 29 about the ongoing Ernst & Young (E&Y) engagement to implement category management and strengthen performance measures.
Melissa from the finance department said E&Y is working with the Strategic Procurement Division (SPD) to consolidate similar contracts, map NIGP procurement codes into eight categories and identify duplication and renegotiation opportunities. The eight categories listed by staff are professional engineering services; construction services; fleet management and equipment; information technology; professional services; public works (including industrial products and services); facilities and management operations; and public safety and human services.
The finance office said E&Y has read-only access to SAP to extract contract and spend data and is starting the work in the facilities and management operations category, which staff identified as having early savings opportunities. The city expects to adopt a standardized quarterly template to report cost-saving estimates, priorities and realized savings. Finance staff said the initiative is led by SPD and Jed's team and will return quarterly progress reports to the committee.
On the performance measures work stream, E&Y has hosted 11 KPI workshops with departments and will run "turn the curve" sessions in mid-August to drill into underperforming indicators and recommend process improvements. Staff said any changes to contract terms or material scope will be brought back to council for approval.
Why it matters: the city budget includes a goal that the category-management effort deliver at least $17 million in general-fund savings in FY26. Committee members pressed for flexibility on contract terms when council-district service funds are used for temporary staff and asked for examples of KPI targets and proposed changes in future updates.
Staff said the work is ongoing and that the committee will receive quarterly demonstrations of the open finance portal and the spending-analysis dashboard.
