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Home My WebLink About28-Workshop Discussion � City of San Bernardino Organizational Review Summary Presentation March 19, 2007 MANAGEMENT PARTNERS I N C O R P O R A T E D ' Project Goals • Identify opportunities for improvement • Identify savings that can be used to reduce costs or improve services Limitation: Overview vs. In-depth 2 MANAGEMENT NE PARTRS Project Approach o Interviewed City Leaders o Reviewed Significant City Plans, Reports, Previous Studies o Conducted Employee Focus Groups o Compared San Bernardino with other cities o Reviewed City Operations o Prepared Project Report 3 > MANAGEMENT PARTNERS Major Findings o Many opportunities to modernize City operations .o Significant fiscal problems create structural deficit o Public safety is crowding out other spending o City response has been to cut and squeeze without fundamental changes q MANASagsnr PeRrne� 2 . Summary of Recommended Actions There are 187 recommendations Realistically it will take a year or longer to implement,but real progress can be made in the coming months.The dollar values cited are estimates which include productivity enhancements and increases in revenues as well as expenditure reductions. As the report notes these recommendations do not result in"new spending money"because the City has so many unfunded liabilities and a need for reinvestment in basic systems. 148 with a dollar value of about 32.5-million can be implemented by management with minor to moderate policy changes 29 with a dollar value of about 32-million would require policy changes by the Mayor and Council to implement 10 with an estimated dollar value of over 34-million would require changes to the City Charter to implement CJ / MANAGEMENT rA!TNCRS This Presentation • Organizational Issues • Financial Issues • Employee Focus Groups • Internal Services Modernization • Line Services Recommendations 6 MANAG�A1[NT rAwTN[RS 3 i • ORGANIZATIONAL ISSUES MANAGEMENT PANTNEY$PMM� low Pa Fir rganizational Issues • Accountability is not always clear • Need to align responsibility & authority • Inadequate internal services • The organizational structure prevents alignment of purpose and action Limited strategic and business planning Limited process integration, coordination Inefficient/redundant operations g > ALAUrft Yr?AKIN" 4 San Bernardino Organizational Structure Unstreamlined, Lacking Accountability 9 MANAGEMENT PARTNERS PC Streamlined Structure MANAGEMENT MAitlL!$ 5 FINANCIAL ISSUES MANAGEMENT.rARTNERS . Salaries Must Be Competitive o 73% of General Fund Expenditures are for Personnel Services o 75% of General Fund Personnel Costs are for Police and Fire City is obligated by Charter formula to pay market wages o City must have competitive salaries 12 MAIyA_e,LIySjV'LlT NERS 6 i • But Revenue Growth Is Not Competitive Total Percentage Increase 1992-2004 Per Capita Revenue Trend e00 i 40% 700 — ., 35% 600 ...... .. -- -- 30% 500 25% 400 20% 300 i 15% ^"-. 200 m 5% .n 0% Mean for Full Sernce CA San Bemard- Dt— �MUn br FWI Sera G Gtiea—San 6emardro 13 MANAGEMENT PARTNEYS P • Unsustainable Business Position Revenues below industry standards makes it difficult for the City to provide "market rate" salaries and competitive service levels Staff Salaries and Service Levels Charges for Service 14 MANAGEMENT!A! MP!j 7 #.t • unsustainable Business Position Must bring both into alignment Charges for Staff Salaries and Service Service Levels 15 > MANA4{.Mx1Y'r.R9.eTilFes P-- *IpExpenditure Comparison Public Safety Costs are Crowding-out Other Expenditures 1996 Expenditures 2006 Expenditures culture 8 Culture& Recreation Streets Recreation General 9`�° Public 5% Government works 17% 15% Streets Public Works 2% w J (t. �ubfa sill Pt6rYC Safety ';". 53 6316- 91 During this period spending in General Government,Culture and Recreation was significantly reduced in absolute and relative terms as Public Safety consumed more of the City's resources. 1G MANA4EMN�� T ■^ V ! ' Fees and Charges • Opportunity for additional revenues by rigorous analysis of full costs Some user fees yet to be updated Overhead portion of some fees is low due to lack of information on equipment and facilities costs • As with expenses, city fees and charges should be at market 17 > MANAGEMENT PA ITNE[S ' Transfer Tax Per Capita «, ( Charter cities have "°'°•° unique ability to levy real Se.R ..KA°e property transfer tax with sw qk voter approval. If San Bernardino had a tax at the average level (about $in1Ga, what it is in Riverside), it R°.<aIM would add approximately RhersiM QQ` �GYn`n^ (� AVERAGE $2.5M in annual General 5.,eR Fund revenues. ! L fp l)U f<000 56000 f8000 St Op Op tt ZO.no �MAfiAG_EMLNT�L(JI� 9 EMPLOYEE FOCUS GROUP RESULTS 19 > MANAGEMENT PARTNERS Focus Group Themes: What employees think provides a qq foundation for many recommendations City understaffed everywhere but Safety Hiring process takes too long Divide between management and staff Purchasing system needs reform Phone system gives the City a "black eye" Council agenda process needs streamlining Payroll system is cumbersome Equipment outdated; repair costs and downtime more than cost to replace 20 MAN��EMENT PARTNERS 10 INTERNAL SUPPORT SERVICES MODERNIZATION 21 MANAGEMENT PARTNERS FProcess Streamlining Four City processes result in major productivity losses: o Purchasing o Budget o Hiring o Agenda 22 MANAGEMENT PARTNERS no Process Streamlining • Purchasing Process Simplify approval authority Use Cal Cards/credit cards • Budget Process Adopt a two year budget P 49 Modernize budget control system 23 MANAGEMENT PARTNERS µ ' Process Streamlining o Hiring Process Reduce process steps/time Improve customer service to departments o Council Agenda Process Reduce process time Reduce items going before Council 24 NA JMENT PARTNERS 12 • Consolidate Support Services Consolidate Finance/HR/IT/Fleet within the government: Water, Library, EDA / RDA now have duplicate support functions 25 MANAGEMENT PAETNEIS • Outdated Bureaucratic Rules Limit Efficiency o San Bernardino requires more to go to City Council and upper management, with outdated rules constraining action: Need to empower employees and hold accountable Need to find balance, set reasonable policies, and then hold managers accountable Free Policy-maker time for strategic use 26 MANAGEMENT PARTNERS 13 • Performance Management Can Be Strengthened • Prepare strategic plan & work plans in every department — to create accountability • Establish performance measures for every program • Implement modern IT systems to automate measurement and collection of data • Enhance analytical support staff 2' MANAGEMENT PAlTN6aS • INDIVIDUAL CITY SERVICE RECOMMENDATIONS 28 / MANAGEMENT PARTNERS 14 Fleet o Restructure fleet in phased approach o Implement Fleet Utilization Review results o Address take-home vehicle policy o Savings and cost avoidance of over $500,000 per year 29 MANAG6MFNT PA RTNEYN Police Department Most precious resource (sworn personnel) not being utilized to maximize productivity o Sworn officers now report spending 40-50% of time on non-sworn tasks Taking traffic collision reports Taking cold burglary reports Responding to false alarms o Need additional non-sworn staff to support sworn personnel MANAGCMCNT fARTLVERS 15 • How Civilian Staffing Leverages Officer Time 80% 75% -- 70% 1 Percent of 65% Officer Time 60% Spent on Sworn Activities 55% ai.;; 50% 45% 40% 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Ratio of Civilian Support Personnel to Sworn Personnel 31 MANAGEMENT FARTNEIS ' Police Department o Balance the Police Hiring Plan by increasing non-sworn positions to support high-skill sworn officers o Modify staffing plan to add 33 sworn and 17 non-sworn o Result is higher level of police service on the street more quickly, at less cost �2 MANAGEMENT�AN:rN€l5 16 II Police Department o Add up to 15 vehicles to provide 100% shift utilization for patrol. When fully implemented this will result in over 4,000 more beats run per year, instead of using officer more inefficiently as is done when they cannot each have a vehicle. o The City has already started implementing this recommendation. 33 MANA'AMENT PAMTNEYS ' Fire Department • Implement light duty program to reduce overtime and disability costs • Update EMS fees and contract provisions 34 MANAGEF4jg_ j! IT_ g 17 • Outsourcing — Managed Competition • City services can be provided at less cost with private service providers — implement by attrition • Examples are custodial, street-lighting, traffic signals, parks maintenance • Refuse provides a good opportunity for a managed competition approach once management has stabilized operations 35 > MAI AGXMEN!!A!t N l! rLibrary o Poor performer in comparison to peers and 97% general funded o Lowest in: 1. Circulation per Registered Borrower 2. FTEs Per Branch 3. Operating Expenditures per Capita 4. Collection Expenditures per Capita 5. Circulation per Capita o More branches and more hours open than peers, yet low use/performance 36 > MAn M_� "ccHi�xL�s 18 P91 , Charging Time to Projects o Introduce use of project-based activity costing Capital Projects — save paid leave time from General Fund 37 MANAGEMENT_rAYTNERS P� How Activity Costing Can Reduce General Fund CIP Costs Estimated Currently only 'aid leave now absorbed direct project costs LaUOr by GF Gas Tax 5121.111 $19,378 are allocated to 12 Sales Tax $218.167 $34.907 restricted funds. AB 2928 556.743 $10,679 Actual savings CIEDB 596.515 $15,442 Sewer $98.834 $15,813 likely to be much Indian $19.452 $3.112 greater as GF 7■7■ Stcim Drain 561,208 $9,793 becomes less of a Traffro Sqg is $86,724 513,876 $123.001 shock absorber. 38 MM�NRGEMEN7 rAETNEES 19 • Seek Voter Approval for Charter Changes • Authorize use of design/build contracting Faster and cheaper project delivery for larger projects. • Raise property transfer tax Potential of$2.6M in new revenues • Realign and integrate governance of Library, Water and Civil Service functions 39 MAN499MCNT PARTNERS IN CONCLUSION 40 MANAGHMLNT rRJ.'[Jy(,RA 20 y$ ' Overall Thoughts • City is faced with fiscal challenges that require attention • Much optimism with new City Leadership and recent Public Safety tax approval • Many opportunities exist to save money Aggressive, focused management to implement • Major policy choices for Mayor and Council 41 MANAGEMENT PApTNLYS Implementation o Governance framework and internal processes designed for old, smaller town o Modernization opportunities are interrelated o Implementation involves Additional work Policy choices o With leadership, it all can be done. Each recommendation is in use in some other city in California today 42 MANAGEMENT rAiNE\S 21 r • city of San Bernardino >R` Organizational Review N Summary Presentation � 0 March 19, 2007 , y C.) o v � MANAGEMENT PARTNERS z+ F I v INC O R R O R A T ED 2 O C r_ E �cv "F- 9 -c c C r. Project Goals • Identify opportunities for improvement • Identify savings that can be used to reduce costs or improve services Limitation: Overview vs. In-depth 2 >MendweA cnili �3 1 ' Project Approach • Interviewed City Leaders • Reviewed Significant City Plans, Reports, Previous Studies • Conducted Employee Focus Groups • Compared San Bernardino with other cities • Reviewed City Operations • Prepared Project Report 3 MANAGEMENT.rATNERS ' Major Findings qq o Many opportunities to modernize City operations -o Significant fiscal problems create structural deficit • Public safety is crowding out other spending • City response has been to cut and squeeze without fundamental changes Q MANAGEMENT PARTNERS 2 P 0 Summary of Recommended Actions There are 187 recommendations Realistically it will take a year or longer to implement,but real progress can be made in the coming months.The dollar values cited are estimates which include productivity enhancements and increases in revenues as well as expenditure reductions. As the report notes these recommendations do not result in"new spending money"because the City has so many unfunded liabilities and a need for reinvestment in basic systems. 148 with a dollar value of about 52.5-million can be implemented by management with minor to moderate policy changes 29 with a dollar value of about 52-million would require policy changes by the Mayor and Council to implement 10 with an estimated dollar value of over 54-million would require changes to the City Charter to implement rj > MANAGEMENT!A T!E ! PI- FOIT Presentation • Organizational Issues • Financial Issues • Employee Focus Groups • Internal Services Modernization • Line Services Recommendations 6 > MANAGEMLNT PARTNERS 3 • ORGANIZATIONAL ISSUES % MANAGEMENT PARTNERS 4 ' Organizational Issues • Accountability is not always clear • Need to align responsibility & authority • Inadequate internal services • The organizational structure prevents alignment of purpose and action Limited strategic and business planning Limited process integration, coordination Inefficient/redundant operations g �MA.LiAG1M�NS_«$ 4 San Bernardino Organizational Structure Unstreamlined, Lacking Accountability 9 MANAGF.MFNT PA RTNFRS • Contrasting, Streamlined Structure 5 POP, FINANCIAL ISSUES 11 WNAGFMRN7'_PARTNERS • Salaries Must Be Competitive 0 73% of General Fund Expenditures are for Personnel Services 0 75% of General Fund Personnel Costs are for Police and Fire City is obligated by Charter formula to pay market wages o City must have competitive salaries 12 MANA4;6r4LNSA, S 6 • But Revenue Growth Is Not Competitive [145%Total Percentage Increase 1992.2004 Per Capita Revenue Trend 500 40% 700 — �'i 35% --- 600 —-----' 30% 500 25% "- 400 7 20% -- 300 15% 2M 10% 1130 5% 0% Mean far FuII Ser—CA San Bernardino Cn- —Meen br FuH 5enice CA Lnier—Sen Brry 13 MANAGEMENT„PARTNERS • Unsustainable Business Position Revenues below industry standards makes it difficult for the City to provide "market rate" salaries and competitive service levels Staff Salaries and Service Levels Charges for Service 14 MANAGEMENT rAaTNER§ 7 P • Unsustainable Business Position Must bring both into alignment Charges for Staff Salaries and Service Service Levels 5 > MANAGP.-I PA R1NlRS • Expenditure Comparison Public Safety Costs are Crowding-out Other Expenditures 1866 Expenditures 2006 Expenditures CLAure 8 culture& Rath Streets Recreation Govemmenl Public 5% Works 7% 15% Streets Public Works 12% 1; Pubia SaNy During this period spending in General Government,Culture and Recreation was significantly reduced in absolute and relative terms as Public Safety consumed more of the City's resources. 1C MANAGHMRN7 rAe7NEPS V Fees and Charges o Opportunity for additional revenues by rigorous analysis of full costs Some user fees yet to be updated _. Overhead portion of some fees is low due to lack of information on equipment and facilities costs o As with expenses, city fees and charges should be at market 17 MANAGEMENT rA[TNE[S P.. WelTransfer Tax Per Capita Charter cities have unique ability to levy real GI.Ma4 property transfer tax with Bumyw4 voter approval. If San Bernardino had a tax at T.— � the average level (about 5..,.G.,. I what it is in Riverside), it would add approximately Rnenge I AVERAGE $2.5M in annual General S.—R... ,.. ' Fund revenues. Va.p R.Yw.N L SMW 3.000 W. S8om 5100.00 SIMM �MANASeEMKNT FA[TNEl3 9 EMPLOYEE FOCUS GROUP RESULTS 19 MAMAC WNT_.RARTR[RS Focus Group Themes: What employees think provides a foundation for many recommendations City understaffed everywhere but Safety Hiring process takes too long Divide between management and staff Purchasing system needs reform Phone system gives the City a "black eye" Council agenda process needs streamlining Payroll system is cumbersome Equipment outdated; repair costs and downtime more than cost to replace 20 > LNANAG9NjKf4T_rAjLTALR$ 10 ppelp INTERNAL SUPPORT SERVICES MODERNIZATION 21 > MANAGEMENT PARTNERS Process Streamlining Four City processes result in major productivity losses: o Purchasing o Budget o Hiring o Agenda 22 MAN& EM PARTNERS Process Streamlining o Purchasing Process Simplify approval authority Use Cal Cards/credit cards o Budget Process Adopt a two year budget Modernize budget control system 23 MANAGEMENT!A TNE!S Process Streamlining • Hiring Process Reduce process steps/time Improve customer service to departments • Council Agenda Process Reduce process time Reduce items going before Council 24 > MANAGEM g.I![f l��[� 12 • Consolidate Support Services Consolidate Finance/HR/IT/Fleet within the government: Water, Library, EDA / RDA now have duplicate support functions 25 MANAGEMENT PARTNERS PC Bureaucratic Rules Limit Efficiency o San Bernardino requires more to go to City Council and upper management, with outdated rules constraining action: Need to empower employees and hold accountable Need to find balance, set reasonable policies, and then hold managers accountable Free Policy-maker time for strategic use 26 dA_N�GRMi PAR7NERs 13 • Performance Management Can Be Strengthened o Prepare strategic plan & work plans in every department — to create accountability o Establish performance measures for every program o Implement modern IT systems to automate measurement and collection of data o Enhance analytical support staff 27 MANAGLMENT PARTNERS • INDIVIDUAL CITY SERVICE RECOMMENDATIONS 28 MALI&"MFNT^ALTN l RS 14 Fleet o Restructure fleet in phased approach o Implement Fleet Utilization Review results o Address take-home vehicle policy o Savings and cost avoidance of over $500,000 per year 29 MANAGEMENT PALTNEaS Police Department Most precious resource (sworn personnel) not being utilized to maximize productivity • Sworn officers now report spending 40-50% of time on non-sworn tasks Taking traffic collision reports Taking cold burglary reports Responding to false alarms • Need additional non-sworn staff to support sworn personnel 30 > MANMAMLNT PANTNl R9 15 y • How Civilian Staffing Leverages Officer Time 75% 70% Percent of 65% Officer Time Spent on Sworn 60% ----- Activities 55% 50% 45% — 40% 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Ratio of Civilian Support Personnel to Sworn Personnel 31 > MANAC6M6NT►.ARTNRRS Police Department o Balance the Police Hiring Plan by increasing non-sworn positions to support high-skill sworn officers o Modify staffing plan to add 33 sworn and 17 non-sworn o Result is higher level of police service on the street more quickly, at less cost 32 ANA eMU_7 EA RTMR 16 Police Department • Add up to 15 vehicles to provide 100% shift utilization for patrol. When fully implemented this will result in over 4,000 more beats run per year, instead of using officer more inefficiently as is done when they cannot each have a vehicle. • The City has already started implementing this recommendation. 33 MANAGLMgNT PARTNERS ' Fire Department • Implement light duty program to reduce overtime and disability costs • Update EMS fees and contract provisions 34 MANAGLMLNT PART�LA� 17 • Outsourcing — Managed Competition o City services can be provided at less cost with private service providers — implement by attrition o Examples are custodial, street-lighting, traffic signals, parks maintenance o Refuse provides a good opportunity for a managed competition approach once management has stabilized operations 35 MANAC[M6NT rAl{TN6RS ' PI o Poor performer in comparison to peers and 97% general funded o Lowest in: 1. Circulation per Registered Borrower 2. FTEs Per Branch 3. Operating Expenditures per Capita 4. Collection Expenditures per Capita 5. Circulation per Capita o More branches and more hours open than peers, yet low use/performance 36 > MANAGEMENT.PARTNERS O 18 Charging Time to Projects o Introduce use of project-based activity costing Capital Projects — save paid leave time from General Fund 37 > MANAGEMENT PAMTNEYS i How Activity Costing 4 Can Reduce General Fund CIP Costs EslnalN Currently only n Paid Lenve row aDsorbcd direct project costs Labor by GF Gas Tax 5121.111 519,378 are allocated to 112 Sales Tax $216.167 $34,907 restricted funds. AB 2928 566.743 $10,679 Actual savings CIEDB 596 515 S15.442 Sewer 586,634 $15,613 likely to be much loth $19.452 $3.112 greater as GF Storm Dram 561,208 59.793 becomes less of a TraHm Signals S86]24 513.875 $123001 shock absorber. 38 5 19 a • Seek Voter Approval for Charter Changes o Authorize use of design/build contracting Faster and cheaper project delivery for larger projects. o Raise property transfer tax Potential of $2.6M in new revenues o Realign and integrate governance of Library, Water and Civil Service functions 35 > MANAGF.MFNT PAITNFtS 1p • IN CONCLUSION 40 > MANA1,1141"AN_MR5 20 Overall Thoughts o City is faced with fiscal challenges that require attention o Much optimism with new City Leadership and recent Public Safety tax approval o Many opportunities exist to save money Aggressive, focused management to implement o Major policy choices for Mayor and Council 41 MANAGEMENT PARTNERS Implementation • Governance framework and internal processes designed for old, smaller town • Modernization opportunities are interrelated • Implementation involves Additional work Policy choices • With leadership, it all can be done. Each recommendation is in use in some other city in California today 42 MANAGEMENT PARTNE RS 21 I