Alvarez helps State of Louisiana save 81 million

19 December 2014

Following recommendations made by consulting firm Alvarez & Marsal, the State of Louisiana (US) will be able to save more than $80 million this fiscal year, and possibly even as much as $2.7 billion over the coming years. Alvarez was paid $7 million for its expertise.

Earlier this year, the administration of the State of Louisiana (US) hired private consulting firm Alvarez & Marsal to come up with a list of recommendations on how to cut costs and generate new revenues, for which it paid the firm $7 million. In June, the firm came up with a list of suggestions that could potentially save Louisiana $2.7 billion over several years.

New Orleans, Louisiana

Since then, several of the recommendations have been followed and as a result, the state’s administration will be able to save $81 million during this fiscal year*. An overview of some of the recommendations made by Alvarez & Marsal that have been implemented so far:

Selling off state property
The consultants advised the state to sell of state property and following this advice, Louisiana will put up well over a hundred pieces of property for sale, a strategy already used prior to the recommendation to close state budget gaps. With the sale of the properties, the state expects to generate over $4.1 million this year and $28 million during the next financial year.

Using a computer system to review public records
The state will purchase a new computer system which will be used to review public records requests, instead of letting lawyers do this work, a move that will save Louisiana $290,000 this year.

Roadside advertising space and media access to traffic cameras
The Department of Transportation and Development has sold advertising space on some its roadside vehicles and will also sell media access to its traffic camera feeds. Together this will generate $500,000 in income for the state government in this fiscal year.

Alvarez & Marsal banner

Tweaking insurance for buildings under construction
The state is tweaking the insurance coverage for buildings under construction in coastal areas. This will save it around $3 million this financial year. In addition to this, the Department of Transportation and Development is also changing the insurance coverage on its buildings, ferries and barges. This saved the Department $1.25 million this fiscal cycle.

Using thinner asphalt
The Department of Transportation and Development is implementing plans to use thinner asphalt in road paving projects.

Releasing more prisoners early
The Department of Corrections has made plans to push more prisoners into rehabilitation and workforce training programs, as a result of which they will be able to earn an early release. By encouraging 2,700 more offenders to participate in these programs, the Department expects to save at least $6.5 million this year.

* Although the State of Louisiana already saved a considerable amount of money and more is expected, some legislators remain sceptical on the decision to hire Alvarez & Marsal, In their view, some of the suggestions were already on the table or even if the process of being implemented before the global management consultancy came in.


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