Wednesday Feb 22 2012
The results are in" sustainability committee recommendations
By: Submitted Larry Whitaker
By Larry Whitaker Special to The News Messenger Core Principles Mission Statement: Adopt a Vision, Mission Statement, Objectives, Goals, Strategies and Measures that guide all public service and financial decisions; and, adopt this mode of operation as the new way of conducting the business of the City. Define the core services: Define the core services and levels of service that the City will provide to its citizens. Only provide those “core services” that the City can afford based on their priority. It is recognized that public safety is paramount among those “core services”. Any service to be delivered must be compared and evaluated against a similar service provided by a private enterprise as well as other public agencies. Cost-efficient: Engage in high quality “cost-efficient” business management practices when evaluating general services. General services should be provided using the most cost-effective means possible, whether this is by utilizing City employees, or outside contractors, suppliers, or outside service providers. Full cost: Identify the “full cost” of services, maintenance, potential upgrades and/or buy-out clauses for all long-term obligations whether capital projects, debt obligations or employment contracts, prior to committing the city to the obligation. In the case of capital projects this will include a feasibility study designed to uncover any obstacles to the projects, either physical or otherwise. Federal and California state statutes: Abide by all Federal and California state statutes, regulations and General Accounting Standards Board (GASB) rules and internal controls as they relate to the financial management of assets of the City; and, provide sufficient resources and direction to support said practice. External audits: Ensure the external audits of City records are completed within three to six months of the close of the fiscal year, unless specifically extended by a vote of the City Council. Formal review: Implement a formal review process of City policies, procedures and fees to promote business expansion and support existing businesses to encourage a healthy underlying local economy. Oppose efforts: Oppose efforts of the State and/or County governments to divert revenues from the City or to increase the unfunded service mandate of City taxpayers. Enterprise funds are reviewed: Assure that enterprise funds are reviewed and structured to be self-funding and self-sustaining, utilizing appropriate cost-recovery targets, levying user charges proportionate to demand and in amounts necessary and appropriate to fund on-going operations, including required long-term capital replacement. Activities that do not fit with the core services to be provided or serve the greater community should be reviewed and possibly privatized to allow the City to focus on its core mission. Encourage City employees: Value, respect, support and encourage City employees who provide the highest level of services to the public. Memorandum of Understanding: Observe the provisions of Memorandum of Understanding with employee organizations. Government should not: Recognize and accept that government should not provide above market wages, long-term economic stability, and better-than-average benefits at the expense of services to the community. Develop a multi-year operating budget: Develop a multi-year operating budget, as opposed to a single year budget. The budget will include not only the two-year operating plan but also the subsequent three-year outlook, for a total of five years. Single year plans do not provide sufficient perspective; many Cities have two-year plans. Plan to review the two-year budget before the beginning of the second year, to make any mid-term adjustments that may be necessary. This format also reduces the workload on City staff and the City Council. Value of City assets: Maintain and preserve the value of City assets and this should be a prime factor in determining departmental budgets. Deferring scheduled maintenance should not be used as a means to resolve budget deficits. City must live within its means: The City must live within its means and follow a comprehensive budgeting process that includes all costs being accounted for during the year in which they occur. Current recurring revenues: Adopt a budget where current recurring revenues are sufficient to fund recurring expenditures. One-time fund sources, deferral of current year expenditures and fund transfers should not be used to solve structural budget imbalances. Likewise, one-time revenue sources should not be used, or planned for use, to support on-going operations or maintenance. Revenue owed to the City: Aggressively pursue revenue owed to the City and assure that moneys due to the City are received in a timely manner. Following established accounting practices and accounts receivable aging practices should provide early visibility to any accounts receivable issues, allowing for appropriate actions to be taken. Assure that development processing costs and related administrative expenses are totally offset by development application fees. Development processing costs: Assure that development processing costs and related administrative expenses are totally offset by development application fees. Fund transfers and loans: Regarding fund transfers and loans within any aspect of the City’s financial dealings, special attention and notification must be given to the City Council should the suggested transfer or loan result in creating a negative balance in the issuing fund. Also, special attention and notification must be given to the City council if the issuing fund or account is already in a negative balance. Costs and fee structures: Set fees as low as possible while at the same time ensuring that they are sufficient to pay for the full cost of providing for an acceptable level of service to the public. Consideration should be given to “quality of life” services like Parks and Recreation as full cost recovery may result in over-pricing something that is more subjective in its measure. Both costs and fee structures should be reviewed regularly to keep pace with changes in the marketplace. General and special tax increases should be considered as a last resort. Capital fees: Assure that capital fees are set to recover all development and related infrastructure, and take into account reasonable and realistic growth projections, following the requirements of the Mitigation Fee Act. Rainy day funds: Do not “raid” reserve accounts or “rainy day” funds unless there is a declared financial or public safety emergency. Diversified and stable revenue base: Maintain a diversified and stable revenue base to minimize the effects of economic fluctuations on revenue generation. Additional intergovernmental funding and grants: Aggressively seek additional intergovernmental funding and grants, with a priority on funding one-time capital projects. Grant-funded projects that require multi-year support will be reviewed by the City Council. New revenue sources: Aggressively pursue new revenue sources, particularly those that will not add to the tax burden of the residents or local businesses. Budget document summaries: Prepare budget document summaries in language (including charts and tables where reasonable) to make it possible for any citizen to understand. Providing relevant financial documentation on the functional activities of the City should be a priority for City staff in support of the need for on-going monitoring, review and measurement against goals and objectives. Maximize citizen participation: Being competent, professional, responsive, trustworthy, accountable, and transparent, will maximize citizen participation in community decisions; it will minimize bureaucracy, emphasize efficiency and be accessible to all citizens. Fiscally responsible and financially stable: Be fiscally responsible and financially stable, will promote long-term goals of the City while addressing immediate needs and public service requirements. Advanced manner: Operate in an ethical, customer-friendly, cost conscious, innovative and technologically advanced manner. Teamwork: Create a challenging, collaborative and supportive environment which treats employees fairly, with respect and promotes teamwork. Conduct the business of the City: Conduct the business of the City in an open manner with clear communications and public engagement; and, with respect for the individual and the roles of the City Council, City Manager and staff. Contribution of our people: Recognize the value and contribution of our people, both city staff and volunteers who through their efforts are delivered the services provided the by the City. Regular updates: City staff shall provide regular updates (quarterly) to the City Council related to current year’s budget, comparing revenues and expenditures to budgeted amounts and with particular emphasis on assumptions made related to revenues and expenditures. Reserves policy: The Reserves policy should clearly define each reserve’s purpose and that each reserve should be adequately funded to deliver its objective. The City will adhere to Chapter 3.38 of the Lincoln Municipal Code regarding Reserves. Investment Policy: Update and maintain the Investment Policy (City of Lincoln 2011 as adopted 01/11/2011) as a guide to securing the investment assets of the City, with such policy to be consistent with the requirements of State law. Debt Management Policies: Create, adopt and maintain a formal set of Debt Management Policies in order to consolidate information related to debt obligations and to maintain good credit standing. The policy should address inter-fund loans, short-term and long-term debt and external debt issuance. Once created, the debt management policies should be reviewed annually for compliance, adjustments and modifications. Long-term debt will not be used to support current obligations; and, debt maturity should be no longer than the useful life of the underlying asset. Ensure that no debt owed to the City: Ensure that no debt owed to the City shall be written off without the explicit authorization by the City Council. All debts – external or internal – shall be documented according to GAAP. Inter-fund lending will always explicitly follow all current GASB and State legislative statues. Participate in the selection: No employee, officer or agent of the City shall participate in the selection or purchase of goods or award of contracts supported by City funds if a conflict of interest, real or apparent, would be involved. Consistent with the Fair Political Practices Act, City officers, employees or agents will neither solicit, nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, suppliers or parties to any agreement. Protecting the rights: The City shall draft and adopt a formal policy protecting the rights of and retaliation against, any City employee who reports a violation of law, municipal code or conduct related to the operations of the City. Compensation: Wages COLA, Merit, and SDI reimbursement: The City meet and confer with employee bargaining units to continue to suspend salary and benefit increases, and to continue to negotiate fair and affordable compensation. Inclusions in job classification: A core principle that payment for required education, certification and licenses be included in base compensation and that additional pay should occur only when education, certification, or licenses exceed this minimum qualifications of a job classification and is used in the performance of a position. Maximum pay rate: The City meet and confer with employee bargaining units to discuss capping the pay rate for a Job Classification at the Maximum Pay Step + 5% in the Job Classification Range. Currently there is a base pay rate (actual step pay rate) and a full pay rate (actual step pay rate + all the extra benefits that increase the pay rate). Hiring practices: The City proactively reduce the average pay Step for most departments. Contracting for services: The City consider the identification of services and implementation of a plan to determine if contracting out for a significant number of services will assist Lincoln in an effort to balance its budget. Compensation: Pension Decision making: The City not offer or accept future Golden Handshake agreements without a cost benefit analysis. CalPERS pension proposals: The City delay immediate action on approval of changes proposed by the State/CalPERS regarding pension proposals, and thoroughly analyze the future impact on city budgets and employees. Responses to the City of Lincoln’s Resolution 2011-038, dated March 8, 2011, should like-wise be thoroughly analyzed for consequences of a long term impact on costs to the city. CalPERS alternatives: The City proceed with their plan of moving new Safety Employees to a Tier II pension plan, after analyzing the impact of the various plans. There are three plans from which to select. Employee share of cost: The City consider negotiating an increase in the share of total cost the employees pay for pension benefits. Compensation: Health Unfunded liabilities: The City contribute the annual required contribution under GASB rules. Health insurance contribution: The City meet and confer with employee bargaining groups in considering the following linked options:(1)Reduce the employer contribution to active and retiree health coverage to the contracting agency’s minimum employer required amount under PEMHCA.(2)•Provide a city payment into the health account in the employees IRC Section 125 Cafeteria plan for active employees.(3)The City’s payment into the IRC Section 125 Cafeteria plan should be based on a “PEMHCA contribution Principle”, with the city payment representing a specific amount. Health insurance relationship: Termination of the health insurance relationship with CalPERS. Retiree health insurance: Ending the lifetime payment of health insurance for future retirees. Active employee health insurance: Setting up a defined contribution cost sharing relationship with the employees where the City’s portion is modifiable by City Resolution. Cost management of section 125 plan: The City review its cost management of its Section 125 plan and explore new procedures to both enhance usage by active management and streamline the cost per employee transactions. Central Service Staffing: The City fill the vacant accounting positions in the Administrative Services Department to ensure that sufficient staff is available to maintain effective internal controls over financial reporting. Internal control: The City staff evaluate current segregation of duties, responsibilities and functions and take necessary corrective actions. As noted in another report section, additional accounting staff is needed to perform these duties. Also, in situations where insufficient staff is available, there may be a need to utilize other non-accounting staff. Cost allocation plans: The City consider implementing the consultant developed Draft Cost Allocation Plan for the 2012-13 budget period and assign sufficient staff resources to ensure that it is administered correctly. This should include timely adjustments to actual costs since the Plan is initially developed based on budgeted costs. Debt service cost: The City staff re-evaluate the procedure used to distribute debt servicing costs for City Hall and establish a plan that distributes costs equitably to appropriate funds in accordance with requirements established in Attachment A of OMB Circular A-87. In addition, the procedure should be documented showing the basis and rationale for allocations. Costing fleet: The City staff develop and implement a procedure for direct costing fleet maintenance costs to benefitting units for use starting with the 2012-13 fiscal year. Fleet maintenance: The City staff evaluate whether contracting out part or all of fleet maintenance is more cost effective than in house services. Information systems: The City staff investigate contracting with a vendor with full knowledge of the system’s reporting capabilities to improve the quantity and quality of management reports available to manage the City’s finances. Training dollars: That the next Budget contain training dollars for the Finance staff in the use of the newly upgraded system. Cost efficiencies could be realized when staff are fully prepared to use all the system’s capabilities. Improved financial information programs: In the event that the current system is deemed inadequate, the FSC recommends the city staff investigate all options for future improved Financial Information programs and/or systems. Backup: The City contracting for automated off-site (at least weekly) backup of all city servers to eliminate a potential disaster which we were very fortunate to avoid with the tanker fire. General Fund Planning no new taxes: That all financial planning should be based on an assumption that there will be no new taxes in the short term (next few years). Reduced service levels: The City continue to reduce its service levels to balance its budget. Revenue based budgeting: The City adopt a budgeting system using a realistic forecasting system. Each department will be allocated a percentage of the revenue (and not allocated on projected expenses). Balance the budget: The City balance the General Fund Budget without the use of reserves. Consideration should be given to the following steps or an equivalent set of steps. 1. Hold Public Safety budget at Police ($5M) and Fire ($3.5M) for the next two years. 2. Freeze all city budgets for the next 2 years. 3. Reduce the expenditures for Development Services Fund. 4. Identify a revenue increase of $1M per year by the fiscal year of 2014-2015. Treasurer: The Treasurer position be put on the ballot to eliminate it as an elected and paid position. The Finance Director can be appointed as Treasurer without additional cost. Financial advisory commission: The City should form a Financial Advisory Commission to advise the Council on long range financial planning much like the Planning Commission does for long range development. Vehicle replacement reserve: That the City establish a vehicle replacement reserve for General Fund vehicles. General Fund: Police Law enforcement services: The City establish a minimum acceptable level of law enforcement services consistent with existing revenues, and when additional revenue becomes available, make it a citywide priority to re-establish desirable service levels and Law enforcement programs. Public safety employee compensation: That a total compensation survey be completed. Institute a program to provide a competitive salary and benefits schedule for the various department Public safety communications: The City consider outsourcing Police and Fire communications to insure that two dispatchers are available at all times. Contracting for police services : The City Council and City staff consider requesting a proposal from the Sheriff to provide a level of serviced as referenced in VI-2-G-1 This base a base level for services as provided by the Police Department, which would include a number of personnel in various capacities who are required to perform those services, including the Public Safety Communications function. General Fund: Fire Fire department long-range plan: Recommend that the City Council and City staff members review the original long-range plan for fire services and determine its relevance for the next five years. Budget: That Fire Department staff develop a five year budget. Training: That a plan be developed to insure that each Lincoln Firefighter completes any training that is deemed to be mandatory. The entire Fire Department training program should be reviewed to determine training areas that require attention and the funding required to rectify the deficiencies in training. Resident volunteers: That the City evaluate the potential for use of “Resident Volunteers” (they are fire-certified, paid, scheduled, on-duty volunteers and they are seeking to complete the field hours necessary for full certification as a fully-trained firefighter. The Resident Volunteers can be used to supplement the sworn staff in order to provide a more cost-effective approach to deployment.) Contracting for fire services: That the City Council and City staff determine a base level for services to be provided by the Fire Department and the number of personnel in various capacities required to perform those services, including the Public Safety Communications function. Consideration should be given to requesting a proposal from neighboring agencies (including Cal Fire) to provide the level of services determined in the study. Administrative clerk: That the department consider hiring a regularly scheduled part-time administrative clerk. General Fund: Library Staffing: If hours donated by volunteers are reduced, levels of funding need to be reviewed. The current level of staffing of 2.9 FTE is sufficient to provide service for 23 hours a week, but is dependent upon volunteer activity. Support volunteers:?Maintaining good communications with all the current volunteers and continue to recruit them. Training should be provided for the volunteers if needed. Communication with Western Placer Unified School District, and Sierra College: Establish scheduled meetings with both agencies to ensure more accurate and timely budgetary planning. Continue funding of Twelve Bridges Library:?Continue to fund the Library. It adds to the economic potential of the residents, encourages youth development, is a source of low cost entertainment items, is a place for study enhancement, encourages computer skills, and is a destination place where a learning environment is made available to parent and child. Fund the library at 4 percent net of General Fund revenue: Maintain the current level of support to the Library System. Carnegie to remain closed: Carnegie is to remain closed until there is a significant and consistent upturn in the General Fund Revenues. Do not consider outsourcing Library operations or management at this time: Be aware of alternative service models once revenues increase and if services provided are not satisfactory. Assembly Bill 438 which was passed September 8, 2011, does not restrict Lincoln from outsourcing the management and the operation of Twelve Bridges Library. Increase library revenue: The City increase revenues. Pursue collecting unpaid invoices from the Joint Use Agencies. Attempt collection of outstanding Library assets. Increase income from rental of Library rooms. General Fund: Recreation Quarterly review: The Recreation department should do a quarterly review of staffing, revenues and expenses. This review and their input should be made to the City Council to keep the City Staff, and residents apprised of our progress in trying to maintain Fiscal Sustainability. General Fund: Development Services Reduce staffing: That the budget be reduced to reflect current level of development. Consideration should be given to two alternatives: (1) reduce development services staff to absolutely minimal levels designed to “keep the ship afloat while making minimum headway”, or (2) outsource the entire department to a qualified private enterprise. A target of $700,000 reduction in expenses should be adopted. Managed competition: The City undertake a “managed competition” for development services with both the City and private vendors competing for the service. Enterprise Fund: Solid Waste Franchise the solid waste collection: The City begin the process to franchise the solid waste collection function in the city with the intention that the franchise contract be signed prior to the start of the FY 2013-14 budgeting activity. We further recommend that a solid waste consultant be contracted with to manage this process. Enterprise Fund: Waste Water Accurate inventory: That the Waste Water Enterprise procure a study contract for a complete, accurate inventory of all underground assets that identifies the assets using GIS technology, established age, expect life time, and replacement costs. Combining a procurement: Consideration be given to combining a procurement for the study contract with a like one from the Water Enterprise to gain possible cost/schedule efficiencies. IO Replacement/repair plan: Using information from the inventory study, produce a comprehensive replacement/ repair plan, so that a financial reserve schedule can be built and utilized in a proactive way. Enterprise Fund: Water Accurate inventory: The Water Enterprise procure a study contract for a complete, accurate inventory of all underground assets that identifies the assets using GIS technology, established age, expect life time, and replacement costs. Combining a procurement: Consideration be given to combining a procurement for the study contract with a like one from the Waste Water Enterprise to gain possible cost/schedule efficiencies. Replacement/repair plan: Using information from the inventory study, produce a comprehensive replacement/ repair plan, so that a financial reserve schedule can be built and utilized in a proactive way. Enterprise Fund: Airport Fuel sales be adjusted: The fuel sales be adjusted to reflect a minimum of a five to seven percent margin based on a LIFO method of costing. Hangar rentals: Hangar rentals must be reviewed and increased as possible, including some sort of CPI plus minimum versus the current fixed percentage increases. Positive impact: The City should place priority on the airport as a key means of economic development. Contract management: The City contract with a firm for management of the airport. Enterprise Fund: Transit Continues discussions with Placer County Transit: The City continues discussions with Placer County Transit and other agencies regarding the potential of outsourcing the operations of Lincoln Transit to them as a cost reduction and thus improving fare box recovery and cost to revenue equality. Special Funds L&L districts: The City Council consider tracking income from L&L Districts to ensure the City does not overextend its future income. Volunteers: The City Council consider seeking additional volunteers from the community, the California Conservation Corp (CCC) or the Federal Job Corps to assist in maintaining Parks and Streets. Contract/bond: The City Council acquire the assistance of outside sources with Contract/Bond law background and RDA knowledge to determine the best course of action to meet the successor agency’s debt obligations. Accounting and Legal expertise : The City Council enlist outside sources with combined Accounting and Legal expertise with Public contract law experience to review all existing RDA Loan agreements to determine the future potential recovery of funds loaned. Restricted funds: The City Council adopt a policy stipulating there will be no borrowing from restricted funds going forward. Borrowing from unrestricted funds must be shown to have specific identified revenue sources to repay the money borrowed. Communications Annual report: The City prepare an ‘annual report’ identifying City services, goals, accomplishments, challenges, fiscal condition, etc. for distribution to community. Budget-in-brief: The City prepare a ‘budget-in-brief’. The Lincoln city budget is a complicated document that includes lots of details for the reader who wants to take the time to read it. Monthly or Quarterly column: The City prepare a monthly or quarterly column in the Lincoln News Messenger –”Ask the City Manager or Ask the City Council”. Quarterly single page financial status: The City prepare a quarterly single page financial status report to the community. Make it available at City Hall, at City Council meetings and on-line as well as via the E-bulletin process. Encourage citizens to register for E-Bulletins Platform: The City provide a platform for our citizens to address the City Council and City Manager where they are able to exchange dialogue regarding specific issues. Semiannual workshops: Semiannual workshops to obtain feedback from the community. Larry Whitaker is a member of the fiscal sustainability committee.