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RPVCCA_CC_SR_2012_03_06_07_Employee_Performance_Incentive_ProgramCITY OF MEMORANDUM RANCHO PALOS VERDES TO: FROM: DATE: SUBJECT: Project Manager: HONORABLE MAYOR &CITY COUNCIL MEMBERS CAROLYN LEHR,CITY MANAGER ~ MARCH 6,2012 EMPLOYEE PERFORMANCE INCENTIVE PROGRAM (PIP)PERFORMANCE GOALS FOR FY 2011·12 Kit Fox,AICP,Senior Administrative Analys RECOMMENDATION 1)Review and adopt the draft Performance Goals for the employee Performance Incentive Program (PIP)for FY 2011-12;and,2)authorize the Finance Advisory Committee (FAC) workplan to include the review and validation of PIP achievements for City Council consideration prior to bonus distribution. BACKGROUND Mayor Misetich originated the PIP concept during the FY 201 0-11 budget adoption process. Staff was challenged to identify at least $150,000 in cost savings and new revenues as a basis for allocating at least $83,000 to the employee merit/bonus pool.The City Council may recall that Staff's successful efforts during the inaugural FY 201 0-11 round of PIP were presented to the public on May 3,2011. In adopting the FY 2011-12 budget on June 21,2011,the previous City Council again endorsed the PIP concept,tying the FY 2011-12 employee merit/bonus pool allocation to cost savings/revenue enhancements (50%),achievement of City Council goals (25%)and maintenance of excellent customer service (25%),this year raised to a 3:1 ratio.The target for this year's PIP is a minimum of $342,900,compared to $150,000 from last year (see attached Staff report of June 21,2011).Since the adoption of the current budget,Staff has been proceeding under these assumptions for the FY 2011-12 PIP. Recently,Mayor Misetich has suggested that this year's program would benefit from the development of specific,measureable City Council-approved goals to serve as guidance for Staff.The adoption of such goals would also give the current City Council the opportunity to provide direction to Staff in furtherance of its highest priority short-and long-term goals, 7-1 MEMORANDUM:PIP Performance Goals for FY 2011·12 March 6,2012 Page 2 as articulated by the City Council in a recent series of facilitated workshops 1 •At the City Council's request,this matter was continued from the meeting of February 21,2012. DISCUSSION Attached to tonight's report is a list of draft performance goals for the FY 2011-12 PIP for the City Council's consideration and adoption.These goals fall into several broad categories,including: •Energy Use Efficiencies •Staffing and Service-Level Efficiencies •Procurement and Contracting Efficiencies •Emergency Preparedness Enhancements •Grant Funding Return on Investment In addition to the achievement of measurable and quantifiable results related to these broad performance goals,Staff anticipates that additional cost savings and revenue enhancements for the City will be achieved in FY 2011-12 as the result of the initiative of individual Staff members and City departments. For the purposes of reporting to the City Council at year end,Staff will provide the City Council with a full accounting of the organization's achievements under the FY 2011-12 PIP,in accordance with the City Council-adopted performance goals.Prior to this, however,Staff suggests modifying the Finance Advisory Committee (FAC)workplan to include the review and validation of the preliminary results of the FY 2011-12 PIP.Staff anticipates that the final results of this year's program would be ready to present to the City Council in Mayor June of 2012. CONCLUSION In conclusion,Staff recommends that the City Council review and adopt the draft Performance Goals for the FY 2011-12 PIP. Attachments: •Draft Employee Performance Incentive Program (PIP)Performance Goals for FY2011-12 •City Council Staff report of June 21,2011 (without attachments) M:\Policy Issues\FY11-12 Employee Performance Incentive Program\20120306_PI PGoalsFY11-12_StaffRpt.doc 1 The scoring of these goals is being presented to the City Council as a separate item on tonight's agenda. 7-2 Employee Performance Incentive Program Performance Goals FY 2011·12 Energy Use Efficiencies •Implement programs and initiatives to reduce energy and natural resource use at City facilities,with a target goal of ~18,700 in annualized cost savings. o Consolidation and reduction in the number of computer servers:$6,000 annual electricity savings o New evapo-transpiration (ET)controllers for irrigation systems for game fields at Hesse and Ryan parks:$11,800 annual water savings o Replacement of exterior lighting at City Hall and Ryan Park with Iight- emitting diode (LED)fixtures:$900 annual electricity savings Staffing and Service-Level Efficiencies •Pursue greater efficiency of the use and deployment of City Staff,based upon fluctuations in demand or activity levels,while maintaining high levels of customer service together with one of the lowest per-capita staffing levels in the South Bay.The goal is to demonstrate savings by strategic re-allocation of Staff in at least two (2)instances,with a target goal of .'300,000 in annualized cost savings. o Reduction of force of three (3)positions in the Community Development Department through reassignment,layoffs and attrition:$296,652 annual savings ($180,031 saved during program period) •Reduce reliance upon consultants by taking greater advantage of in-house Staff resources and expertise to perform tasks,with the goal of at least (2)significant assignments normally performed by consultants and .'4,500 in annualized cost savings. o Community Development Staff prepared all or portions of environmental review documents for the City's catch basin screen installation project, Sam Ramon Canyon storm drain project,and trail and habitat restoration projects in the City's Nature Preserve (assumes 25 hours of City Staff time at $150/hour average consultant hourly rate):$3,750 savings during program period o Public Works and Community Development Staff coordinated a land survey for Grandview Park:$600 savings during program period Procurement and Contracting Efficiencies •Where appropriate,utilize the pre-qualification bid process,value engineering and continued best management practices for capital improvements and services to achieve project savings,as recorded at the time the City Council approves the project Notice of Completion.The goal entails listing specific examples of cost savings achieved by applying creativity and ingenuity to the management of project costs. Page 1 of 2 7-3 •Public Works will seek to re-bid (with new specifications)contracts for landscape maintenance in City parks and rights-of-way (beginning in FY11-12),with a combined annual savings goal of $50,000 as compared to the previous contracts •Where appropriate,pursue grant funding for capital improvement projects.List the grants applied for and awarded during the program period,and describe the Staff effort required to prepare,submit and monitor grant applications and funding awarded. •Leverage and maximize the value of COBG funds for projects that improve public accessibility to City facilities.List the projects funded (in whole or in part)by COBG funds during the program period. o Public Works Staff will leverage COBG funds to upgrade public restrooms at City Hall for AOA compliance.Savings goal is $15,000. Emergency Preparedness Enhancements •Pursue a leadership role in the coordination of improved community emergency preparedness on the Peninsula and in the South Bay region.This goal addresses top City Council priorities of public safety and joint emergency responsiveness within our region. o City Manager to oversee the Area G disaster management coordinator for the next 2-year period o Improve the reliability of electrical service to critical City emergency facilities with uninterruptable power supply o Enhance the safety and survivability of critical City emergency facilities with seismic and life-safety upgrades Grant Funding Return on Investment •ExclUding the Proposition 1E grant awarded for the San Ramon Canyon Project, exceed a 400%return on investment from the services of grant and advocacy consultants in seeking local,State and Federal funding of City projects,programs and initiatives,with a target goal of exceeding $392,000 in new grant revenues during the program year,for a net revenue gain exceeding J294,OOO. M:\Policy Issues\FY11-12 Employee Performance Incentive Program\Revised Draft PIP Performance Goals FY11-12.doc Page 2 of2 7-4 CITY OF MEMORANDUM RANCHO PALOS VERDES TO: FROM: DATE: SUBJECT: REVIEWED: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCI~ DENNIS McLEAN,DIRECTOR OF FINANCE &INFORMATIONCi!l:::> TECHNOLOGY • JUNE 21,2011 ADOPTION OF CITY BUDGET AND EMPLOYEE SALARY RANGES FOR FISCAL YEAR 2011·2012 CAROLYN LEHR,CITY MANAGER 05L- Staff Coordinator:Kathryn Downs,Deputy Director of Finance &Information Technology RECOMMENDATION 1.Adopt Resolution No.2011-,approving a budget appropriation and adopting the operating and capital improvement budget for FY11-12;and 2.Adopt Resolution No.2011-,establishing salary and hourly ranges for all competitive,management and part-time employee job classifications. DISCUSSION Budget Summary The draft FY11-12 General Fund budget is balanced,as follows: i;;~ Revenues 23,198,200 Transfers In 452,000 i~••J.fl~»J._ Expenditures 18,810,065 Transfers 0ut 4,839,253 ~_~tlf~rflijJ'f&Wi{~Bi.I._ Recent information from the State Controller's office indicates that the City has general 7-5 ADOPTION OF CITY BUDGET AND EMPLOYEE SALARY RANGES FOR FISCAL YEAR 2011·2012 June 21,2011 Page 2 of 5 revenue per capita of $408,which can be compared to the South Bay average of $794 and statewide average of $663.Even with limited resources,the City is able to provide a high level of seNice to its residents and maintain a balanced operating budget. The draft FY11-12 citywide budget of $35.2 million maintains core seNice levels and includes a total Capital Improvement Projects (CIP)and Water Quality Flood Protection (WQFP)budget of $7.8 million to maintain and improve the City's infrastructure.The City's 2011 Five-Year Capital Improvement Plan has been integrated into the proposed FY11-12 budget. The attached resolution memorializes the draft budget presented on June ih,as modified by the CitY'Council during its budget workshop.If the City Council adopts the resolution at this public hearing,the City's balanced budget will be effective July 1,2011.Staff expects to present Redevelopment Agency and Improvement Authority budgets for adoption on July 5,2011. General Fund ReseNe On June 7th ,the City Council approved a General Fund transfer of $211,000 to the CIP Fund for a sewer relocation project associated with the larger San Ramon Canyon project. This FY1 0-11 General Fund transfer impacts the estimated June 30,2012 General Fund ReseNe level,which is now expected to be about $253,000 below policy threshold,as illustrated below. f;I'lt'::::::'<:">:"::::::::::::::::::::::":;"':':"''''F·'····w.· Revised Estimate at June 30,2011 9,150,835 Proposed FY11-12 Net Activity 882 Proposed FY11-12 Expenditures 18,810,065 However,consistent with prior years,Staff expects that FY1 0-11 favorable variances will restore the General Fund ReseNe to the policy threshold.The FY10-11 results are expected to be available prior to the end of the 2011 calendar year. Changes After June 7th BUdget Workshop The City Council's direction for the General Fund on June 7th included a net surplus of $3.6,782 for FY11-12.City Council also directed Staff to return with more information regarding the proposed Hesse Park kitchen improvement project.Staff recommends including an appropriation of $35,000 in the FY11-12 budget,as the justification for the project is compelling. The condition of the Hesse Park kitchen is an important variable that impacts rental7-6 ADOPTION OF CITY BUDGET AND EMPLOYEE SALARY RANGES FOR FISCAL YEAR 2011-2012 June 21,2011 Page 3 of5 revenue at the park site.The kitchen is frequently used by caterers and hosts for various private party events,as well as both privately managed and City managed recreation programs.Even though numerous repairs have been made,the appliances are aging and are not completely reliable to function during events;which lead to complaints and a decline in rental events~The project would also include replacement of the aged cabinets to increase the appeal to prospective renters,and installation of a code-compliant venting hood. Staff is currently proposing one other significant chan~e to the FY11-12 bUdget,which does not affect the General Fund.Prior to the June 7 bUdget workshop,the City was informed that County Supervisor Knabe intended to grant the City an additional $150,000 of Measure A money during FY11-12.While preparing for the June 7th workshop,Staff planned to use the Measure A grant to fund two small park and trail projects: ~Eastview Park playground equipment replacement to address issues raised by a playground safety audit ($89,000);and ~The City's matching contribution to the California Coastal Trail project primarily funded with a $500,000 grant from the California Coastal Conservancy ($60,000 match). After further discussion with Supervisor Knabe's office,it was determined that the Measure A grant is best used for one single project that can be completed within the next 12 months.To achieve Supervisor's Knabe's goals,Staff recommends a larger project at Eastview Park to replace the playground equipment,and improve access to a restroom complaint with the Americans with Disabilities Act.The larger project estimate is $240,000, and would be partially funded with the $150,000 Measure A grant.To maintain a balanced bUdget,Staff recommends funding both the remaining $90,000 of the Eastview project and the $60,000 California Coastal Trail match from the CIP Reserve. Finally,per City Council's direction,Staff has included a $6,000 allocation in the Building Maintenance program of the General Fund to explore cooling options at City Hall.Staff expects to return to City Council at a later date outlining the City's options. Employee Compensation The proposed employee compensation budget includes a 3.0%cost of living increase based onthe change in the Los Angeles Consumer Price Index for the 12 months ended March 2011,which is consistent with prior practice;a 1.6%merit increase,which is consistent with FY10-11;and a Performance Incentive Program (PIP)with a maximum payout of $114,300.The proposed PIP is based on a 3:1 ratio.For every $3 dollars of cost savings/new revenue,$1 of incentive pay may be disbursed after City Council review and approval. Staff has updated the FY11-12 Salary Ranges (exhibit A of the salary range resolution)by 3.0%for the cost of living increase.As a housekeeping item,3 classifications have been added to the salary schedule to give management greater flexibility when filling the employee positions authorized by City Council.The 3 classifications are:Assistant to the7-7 ADOPTION OF CITY BUDGET AND EMPLOYEE SALARY RANGES FOR FISCAL YEAR 2011·2012 June 21,2011 Page 4 of 5 City Manager,Senior Accounting Technician,and Television Producer (a part-time position).As recent as FY09-1 0,the salary schedule included a classification for Assistant to the City Manager,which was inadvertently deleted from the FY10-11 salary schedule. Job descriptions for the other 2 classifications have been attached to this staff report. Adding the classifications to the salary schedule does not increase the City's employee head count or budgeted payroll. Potential Future Impacts to FY11-12 Budget The City has applied for a federal grant to subsidize the Community Resource (CORE) Sheriff program,and expects notification after July 1st•If the grant is not awarded,the Sheriff may not continue to provide the CORE deputy services at the discounted "grant" rate.Staff will keep the City Council informed as more information becomes available. The Pension Subcommittee of the City Council is expected to complete its work within the next several months.Any decisions made by the City Council to alter the City's pension benefit are expected to impact the FY11-12 budget. Reserve Policies -Status Report In accordance with City Council policy No.41:ReseNe Policies,the chart below summarizes each fund's reserve level,the estimated reserve at June 30,2012 and identifies any expected excess or shortage.The estimates are based on the proposed FY11-12 budget. Street Maintenance Habitat Restoration Habitat Restoration S ubreg ion One Capital Improvement Projects Capital Improvement Projects Equipment Replacement Attaohments 50%of budgeted expen itures One year of Portuguese Bend road maintenance Emergency projec1s Future maintenance Developer endowment Emergency or Future Projec1s FE MA reserve for FY04·05 win ter storms Estimated replacement cost of asse1s held 516,400 50,000 74,786 750,000 3,000,000 215,209 1,698,166 517,365 50,000 171,992 752,520 7,483,111 215,209 1.735,548 965 97,206 2,520 4,483,111 37,382 Draft Budget Dooument for FY11 12 &-FY12 13 Rosolution No.2011 ,approving a budget appropriation and adopting the operating and oapital impro\<ement budget for FY11 12 Resolution No.2011 ,establishing salary and hourly rangos for all competitive, 7-8 ADOPTION OF CITY BUDGET AND EMPLOYEE SALARY RANGES FOR FISCAL YEAR 2011·2012 June 21,2011 .Page 5 of 5 management and part time employee job olassifioations by applying a Consumer Prioe Index (CPt)adjustment of 3.0%to all ranges Exhibit A Salary and Hourly Sohedule for Competitive,Management and Part Time Positions Exhibit B Sohedule for Auto l\lIo'Nanoo& dob Dosoriptions for Sonior Aooounting Toohnioian and Telo\(ision Produoor 7-9