This increase in responsibility has given her a broader view of the city's total risk picture. “Before, when I was responsible for risk and not these other pieces, I didn't have as complete a picture as I would have liked,” Mallett explains.

Despite this perhaps unexpected upside, the economic situation continues to present plenty of challenges. “We were talking recently about preventive maintenance on our vehicles and equipment—and how deferring maintenance [to help the budget] can have risk-management implications,” Mallett says.

Drivers could be injured—“if you have vehicles with faulty brake systems, as an example”—which could lead to liability claims.

She adds that there has to be a balance between aggressively looking to cut costs “while, at the same time, realizing the impact some of those [reductions] could have on our organizations.”

One area that has taken a big hit, she says, is staff training. “In times like this, we do a lot more reading, a lot more self-development” as opposed to attending paid educational events.

She adds, however, “For us and most [of my peers I've spoken with], risk management is not being impacted more than any other department—all shoulder the directive, whether to reduce your budget by a certain percentage or to hold the line steady.”

DEMONSTRATING VALUE

As in the private sector, it's important that public-entity risk managers take steps to ensure that the “profession and the practice of risk management are recognized and valued in our organization and that our decision makers recognize the value in allowing the risk manager to have input,” Mallett says. “Otherwise, when our decision makers are looking at places to cut, they may be looking at us.”

In her entity, she says, risk management is fortunate to have a seat at the decision-making table. “Often risk managers don't.”

The fact that risk management has been often cited in the outpouring of news about the failures leading to the financial crisis “has helped the discipline,” Mallett believes, increasing the “appreciation of risk management and [encouraging] a buy-in on the function of risk management.”

In days past, people had never heard of risk management, she says. “Risk management is an area where, when things go right, nobody notices. Now people understand more the wide variety of responsibility areas that risk management covers.”

She adds, however, “We have more educating to do, which we try to do through PRIMA. There is more of our story that needs to be told. Employees are having to do more with less in some organizations and it's had an impact.”

CASE STUDY #2

Despite Painful Cuts, Montgomery County, Md., Stays Prepared

Terry Fleming, director since 1988 of the division of risk management of Montgomery County, Md., and a former president of the Risk and Insurance Management Society, reports that the impact of the economic crisis is “ongoing,” noting that “it will be a while before we recover.”

In Montgomery County, which is self-insured, the ramifications have meant layoffs. “We have to pay claims, so there is little room to cut there. Personnel is the only place left,” Fleming says, noting that he had 12 employees and is now down to 10—which means added work for everyone.

“The cut we're taking this year is in our loss-control, occupational-safety section,” he says. As a result, employees will see heavier workloads, which means “we'll be less responsive and less customer-service oriented because we'll have fewer people to do the work.”

Benefits also have been reduced.

In the county overall, about 400 public-sector positions were eliminated, diminishing library services and expanding classroom sizes. “A $300 million gap had to be closed,” Fleming says.

Some programs, such as capital improvements and building projects, have been curtailed. Upkeep on structures has also taken a hit. “The windows aren't washed as often; the buildings aren't cleaned as often,” Fleming says.

KEEPING PRIORITIES STRAIGHT

Nevertheless, despite these cuts, the county has not suffered when it comes to preparedness, Fleming observes. Montgomery County has an emergency-operations center, primarily run by police and fire, the first responders in any catastrophe. “Just last week we did a hurricane exercise. We do terrorist attacks, nuclear attacks; we've done train wrecks and plane wrecks,” he says.

An emergency-operations center in the northern part of the county is the base for scenario testing. “We all have a station there, and we have a public information office. Everything is set up the way it would be in an actual disaster,” he says.

 The 911 call center is located there, and all traffic lights can be controlled from the location. “We even have three mobile headquarters—two for the police department and one for fire and rescue—that we can take onsite,” he says.

Montgomery County bolsters its own emergency resources by participating in a mutual-aid program with other counties in the region, including Fairfax County and Washington, D.C. “Our firefighters, for example, responded to the Pentagon on Sept. 11, 2001,” he says.

The county also has a search-and-rescue team “that goes all over the country and the world if needed.” The team responded to Oklahoma City after the bombing of the federal building and to the Olympics in Atlanta when there was a bomb scare, as well as a number of tornado incidents.

In light of the catastrophes worldwide, he says, the county is planning more exercises. And these practice runs are critically important, Fleming says, because without them, things can get overlooked, like the amount of fuel needed to keep a generator running for a certain period of time.

Keeping contingency plans updated is “our job; it's part of what we do,” Fleming says. “I buy the commercial insurance to protect our buildings, so I think we're pretty well protected and well organized. Of course, something always throws a monkey wrench into the mix.”