Kevin

The day after the City Council’s annual Goals Workshop Oct. 11, our Department Heads gathered at their annual strategic planning retreat to discuss policy direction, operational focus areas, and staff development.

Developing budget policies and prioritizing expenses:
Starting the retreat with a budget discussion, Chief Financial Officer Jay Panzica noted, “Cities can’t run the way they used to, with property taxes held to below-market levels and decreases in sales tax growth resulting from online shopping.” One example was music CDs and movie DVDs, which used to generate sales tax revenues when they were purchased at stores, are now consumed through online streaming services that are not taxed.

“We’re in a different place now than we’ve been before,” said City Manager Rob Jensen.

Staff did a good job managing expenses, coming in $1.5 million under budget for materials and supplies in FY2015-16. “We also spent $1.5 million from contingency funds, so we’re dead on with our budget,” Jensen said.

“We want the budget to be as accurate as we can, so this is good news,” said Panzica.

If money remains after council budget policies are implemented, department heads discussed recommending that Council fund the ERP project, which is about to begin, and the replacement of 800mHz radios for public safety.

Direction given at the Goals Workshop will shape budget policies that the Council will consider in early 2017. Specifically, the Council discussed increasing the amount of money the City directs to the OPEB trust in order to reduce the liability associated with retiree health benefits.

Council will also consider a policy to replenish funds that were underfunded during the recession, such as the Capital Improvement Projects Rehabilitation (CIP Rehab) Fund, which pays for maintenance and repairs to city facilities among other things.

When the Utility Users Tax was eliminated in 2000, the resulting loss of approximately $14 million (in today’s dollars) in annual revenues was quickly masked by growth in development that occurred over the next seven years. The resulting surge in property and sales tax revenues covered services that would’ve otherwise been cut at that time. Those ongoing costs are still with us, though the revenue was eliminated nearly 17 years ago.

The system is out of balance and puts our service levels at risk. This is something the Council discussed at its Goals Workshop as well. “We’re in a unique position to fix it,” Jensen said.


Culture:
Department Heads discussed the importance of empowering staff to seize opportunities to think creatively and problem solve.

It was also noted that the level of initiative people take, along with the attitude or perspective people adopt, dictate whether their influence in the organization builds or erodes the culture. We have to be the change we want to see.

Discussion included how to help staff members recognize and appreciate the culture and benefits city employees enjoy, compared to opportunities in the private sector. While similar jobs exist in the private sector, many who work in government find fulfillment in making our community better. There was a desire to expand this sense of contribution more widely throughout the city’s culture.

Discussion also included a recognition that heavy workloads may be impacting service levels. While adding people to manage current service levels is often the first option people consider, there is a more practical one, given our budget constraints and priorities: To manage the workload or modify service levels instead.

It’s important to have these discussions in order to minimize burnout among our employees, who have been the architects of the success of our city. Keeping motivation and engagement high will make for a great work environment and personal fulfillment, which will benefit our community.


Staffing: Re-classifications
Department Heads reconfirmed the need to continue holding recruitments, instead of appointing people to positions that have been reclassified. While it may feel awkward or appear disingenuous to hold a recruitment when there seems to be someone in line for the position already, the alternative of appointing people without a competitive recruitment has created perceptions of favoritism in the past.

Though it’s permitted under City personnel rules, Department Heads expressed concern that eliminating the recruitment process for reclassifications would deprive other staff members of the opportunity both to interview and to demonstrate a willingness and readiness for other positions in the city, along with creating a sense of favoritism and a closed culture.

“The system will never be perfect, but department heads agreed that having open recruitments is essential to providing opportunities to staff members who seek other opportunities,” said Assistant City Manager Dom Casey, who heads the City’s Organizational Culture and Leadership initiative.

Salary structure
Personnel rules don’t require that the percentage difference in pay between supervisors and those they supervise is set at a certain number. Instead, it varies throughout the city, which allows for needed flexibility. “While we’re concerned about compaction issues, we recognize the need for salaries to be market-driven and that they vary by industry,” said Jensen.

Department Heads discussed on a broader scale that it is natural for career paths to span multiple departments, depending on people’s interests and professional certifications. It was also noted that the breadth and scope of decision-making authority and job descriptions may evolve over time to reflect industry changes and city needs.

Total Compensation surveys
Department Heads discussed the jurisdictions to which the total compensation of various classifications are compared to during a compensation study. Some jurisdictions we compare ourselves to may not make sense across all classification, such as comparing with a city that contracts out most of their services or delivers different types of services than the City. Going forward, staff will be reviewing jurisdictions that we compare with and making recommendations for changes where needed.

Succession Planning
Given the stark fact that approximately 40 percent of the City’s workforce is eligible to retire within the next five years, department heads again focused on succession planning. Topics included:

Performance reviews: Making sure that ratings and feedback are genuine and candid, and including feedback from staff in other departments in order to provide valuable feedback that will help employees be better equipped for success.
Department head meetings: When department heads are unable to attend the monthly department head meeting, they have the option to send alternate staff members in their place. This will expose staff to a higher level of decision-making in the organization and provide broader citywide perspectives.

Mentorship: OC&L is evaluating options to implement a mentoring program that will help develop talent and strengthen succession-planning in our organization.

Awareness of issues and expectations: OC&L is working on a program that will help new and current employees become familiar with expectations, culture, customer service, core competencies, what departments do, and how we work together. Originally an outgrowth of an onboarding initiative, it’s been expanded to include current employees, whether it’s their first orientation (due to a suspension of the program during the recession), or because they may not be aware of all the changes in culture, philosophy, and growth the city has gone through over the years of their employment.
Internal Service Funds

Being able to accurately account for the costs associated with providing each service the city delivers is the goal of developing Internal Service Funds (ISFs). A greater degree of precision is essential to informing decisions that the community and the Council make.

A presentation was given on ISFs being establish for next fiscal year for both Information Technology and Facility Services, along with detailed information customized to each department. Department heads discussed expectations and some questions about the new approach. To address the concern of controlling costs that get assigned to departments, department heads agreed that a process would be established to account for needs and review costs.

In addition, the utilities highlighted the need for a way to ensure that they don’t pay twice for the service—through indirect charges already in place and then through ISFs. The ISF funds will take the place of the indirect charges for these services.

Overall, there will be five new ISFs: Information Technology Operations Fund, Information Technology Replacement Fund, Facility Services Fund, Facility Rehabilitation Fund, and a General Equipment Replacement Fund. Facility and Information Technology services will be removed from the Indirect Cost Allocation Plan and allocated directly into operational budgets very much like Automotive Services and Automotive Replacement charges are today.

Staff from Central Services, Information Technology, and Finance have been working through the details for the past several months and have had two communications sessions with key budget staff from each department. Additional, the team has regularly check-in meetings with Chief Financial Officer Jay Panzica and Assistant City Manager Dominick Casey.