HomeMy WebLinkAbout2012-07-24; City Council; 20974; Parks and Recration Operational Assessment ReportCITY OF CARLSBAD - AGENDA BILL 8
AB# 20.974
PARKS & RECREATION DEPARTMENT
OPERATIONAL ASSESSMENT REPORT
DEPT. DIRECTOR
MTG. 7/24/12 PARKS & RECREATION DEPARTMENT
OPERATIONAL ASSESSMENT REPORT CITY ATTORNEY
DEPT. MGR
PARKS & RECREATION DEPARTMENT
OPERATIONAL ASSESSMENT REPORT CITY MANAGER {
RECOMMENDED ACTION:
Accept the Parks & Recreation Department operational assessnnent report from Baker Tilly
and direct staff on how to proceed.
ITEM EXPLANATION:
As a part of its fiduciary responsibility to the Carlsbad community, the City Council strives to
ensure that top quality services are consistently delivered at the best value to taxpayers. To
ensure best value is achieved, city staff developed the framework for a Best Value Services
Program that compares the cost and quality of city services to industry best practices and
comparable services delivered by the public and private sectors. On Sept. 20, 2011, the City
Council approved the framework and authorized city staff to begin to refine and implement
the program.
On Jan. 24, 2012, the City Council approved a master agreement with Baker Tilly Virchow
Kraus to assist with the Best Value Services Program. Baker Tilly is the 16*^ largest CPA and
consulting firm in the U.S and specializes in accounting and management consulting. In
addition, the firm brings significant experience from work completed in both the public and
private sector.
In February 2012, staff and Baker Tilly began to work with the Parks & Recreation
Department on an operational assessment. The operational assessment is an independent
review of a department's lines of business, in terms of their cost, methods and quality of
service. It is important to note that the focus of the report was to identify opportunities to
provide the same high level of quality programs and services at a lower cost. No reductions
in services are contemplated.
The operational assessment for the city's Parks & Recreation Department has been
completed and reviewed by staff to ensure that the findings and recommendations were
supported by the data and the methodologies were applied appropriately. The executive
summary of the report is included as an exhibit to the agenda bill. A copy of the complete
report is available in the Office ofthe City Clerk.
DEPARTMENT CONTACT: Cynthia Haas 760-434-2829 cynthia.haas@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED • CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF D
WITHDRAWN • OTHER - SEE MINUTES !B[
AMENDED • By minute motion. Council accepted the Report
the staff recommendations.
There are a variety of actions to be considered based on the findings in the operational
assessment from Baker Tilly. Staff is recommending that the following processes be used in
addressing them:
- Recommendations involving operational efficiencies will be reviewed and may be
implemented by the City Manager and Parks & Recreation Director.
- Recommendations on fee and revenue changes will be evaluated and addressed
through the FY 2013-14 budget process.
- Recommendations involving changes to the Memorandum of Understanding with
the Carlsbad City Employees' Association (CCEA) will be addressed through the
regular contract negotiation process.
In addition, Baker Tilly's assessment includes a finding that significant savings can be
achieved through the contracting or outsourcing of portions, or all of park maintenance
services. If the City Council wishes to pursue outsourcing any of these services, staff would
need to be directed to initiate the Meet and Confer process with CCEA by making a
proposal to outsource. Negotiations would focus on the decision to outsource work currently
performed by CCEA represented employees. If the Meet and Confer process results in a
decision to outsource, then the City Council will need to again initiate the Meet and Confer
process to negotiate the effects of outsourcing on CCEA represented employees.
Baker Tilly's assessment outlines two alternatives for the city to consider with respect to
outsourcing park maintenance activities:
1. Outsourcing all parks maintenance services (tree maintenance, landscape
maintenance, hardscape maintenance, trails, open space and preserve maintenance).
2. Outsourcing only tree maintenance and landscape maintenance services.
Staff is seeking direction from the City Council as to whether they wish to select one of
these two alternatives.
Other opportunities identified in the report for outsourcing or managed competition will be
evaluated at a later time. If the Council does not wish to pursue contracting any of the
services identified in the report, then the remainder of the recommendations in the report
will be handled as stated above.
FISCAL IMPACT:
A total of 48 opportunities with a range of $2.3 million to $4.7 million annually in estimated
potential savings, revenue enhancements or resource reallocations are included in the
operational assessment.
Ifthe Council chooses to pursue contracting for all parks maintenance services (tree
maintenance, landscape maintenance, hardscape maintenance, trails, open space and
preserve maintenance) the estimated savings are $1,700,000 - $3,866,000 per year.
If the Council chooses to pursue contracting only for tree maintenance and landscape
maintenance services the estimated savings is $1,625,000 per year.
3-
If the Council does not wish to pursue contracting any of the services identified in the report
the savings will depend on the remainder of the recommendations in the report that are
ultimately implemented.
ENVIRONMENTAL IMPACT:
Pursuant to Public Resources Code section 21065, this action does not constitute a "project"
within the meaning of CEQA in that it has no potential to cause either a direct physical
change in the environment, or a reasonably foreseeable indirect physical change in the
environment, and therefore does not require environmental review.
EXHIBITS:
1. Executive Summary from the Parks & Recreation Operational Assessment conducted by
Baker Tilly.
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
City of Carlsbad, CA
Executive Summary
The City of Carlsbad (hereinafter, "the city") is known for providing an extremely high quality of service.
The city consistently receives a high level of satisfaction from residents in its annual public opinion survey
The most recent survey, from 2011, showed that 98 percent of residents rate the city's quality of life as
good or excellent, and 94 percent are satisfied with the job the city is doing providing services. The
challenge facing the City of Carlsbad is how to maintain these excellent ratings while addressing the very
real concerns of a volatile economy and increasing labor and related variable costs. To address this
challenge, the city recently created a Best Value Services program. This program aligns with the city's
strategic focus area of being a sustainable organization - i.e., being an adaptable, responsive, and
efficient organization that delivers cost effective, high quality services. In other words, a sustainable city
organization is one that provides the best quality at lowest cost.
The program is intended to evaluate service delivery methods and costs for all city operations except
sworn public safety services. In December 2011, the city selected Baker Tilly to assist with the Best Value
Services program. The first step in this program is an operational assessment of all the services provided
by a particular department. This report summarizes the results ofthe operational assessment ofthe Parks
& Recreation Department. The recommendations contained in this report are intended to:
> Evaluate department performance in relation to best practices and accepted industry standards;
> Quantify current resource allocations and expenditures by functional area within lines of business,
(i.e.. Line of Business: Parks Maintenance - Pest Control (functional area);
> Ensure that the city's resources and strategic priorities are aligned;
> Determine the feasibility of alternative service delivery approaches, and enhance collaboration
and coordination with other entities; and
> Position the city to continue the delivery of high quality services within Parks & Recreation at the
lowest cost to taxpayers.
Baker Tilly's strategy in assessing operations was to look at the full continuum of options available to the
city The following provides an overview of some ofthe options considered during this analysis and the
criteria used to make the assessment:
> Productivity Enhancements: The options to consider under this category of improvements
focus on enhancing the productivity of the organization. There are a number of different ways to
look at improved productivity. They include:
- Usage of technology to reduce processing times; enabling the reallocation of resources
- Process re-engineering allows staff to decrease the number of steps to complete a process. It
may also include a reduction in the number of departments participating in a process, the
elimination of approvals in order to streamline tasks, and the development of staff
specializations so that fewer participants in a process are needed.
- Lean government refers to the application of lean production principles and methods to
identify and implement the most efficient and value added way to provide government
services.
Cost Sharing Arrangements: Consolidation of services and functions offers municipalities the
opportunity to realize significant savings while preserving, or even enhancing, service levels.
There are many examples of intergovernmental cooperation, ranging from joint purchasing
through full consolidation of formerly separate organizations. These arrangements offer a number
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
City of Carlsbad, CA
of advantages beyond cost reduction: standardization, reduced processing times and greater
organizational communication. The options considered under these arrangements focus on the
city's ability to work with other units to share services, or whether or not options for consolidation
exist.
> Managed Competition: Although managed competition has existed for decades, it has only
recently seen increased implementation. Managed competition is a process used by local
governments to identify the most cost-effective method for quality service delivery. It calls for
carefully comparing the costs and benefits of contracting with private business or another
government entity against the costs and benefits of providing the service in-house.
We use two criteria for determining whether or not managed competition is an option at the city:
- Where the gap between the current cost of service (internal) and the cost of a potential
vendor (external) is narrow enough that the city might be able to negotiate with bargaining
units to lower overall cost of service or it is feasible that City employees could lower costs
based on changes in service delivery approach. Negotiation strategies may include:
increasing staff availability for work, decreasing crew sizes while maintaining safety and
quality and eliminating some bargaining agreement items (e.g., call back pay duty
availability). Baker Tilly selected items for managed competition based upon our professional
opinion in identifying gaps which may be addressed by a competitive process. The city
however, may elect to use a different process depending upon circumstances.
- When there are less private sector providers available.
> Outsourcing: This option considers whether or not there is a vendor in the market who can
perform the services in a more cost efficient manner. The cost savings under this option lies
primarily in the difference between the public sector and private sector benefit rates. Outsourcing
options are typically considered where the gap between what a vendor may charge for a service
is substantially less than what the city is currently paying for it. Additionally a substantial number
of third party providers exist in the respective area.
The review completed in this report spans the full continuum of options available to the city relative to the
delivery of Parks & Recreation services. A total of 48 opportunities with a range of $2.3 million to $4.7
million annually in estimated potential savings, revenue enhancements or resource reallocations are
included in this report. Please note that not every opportunity has a tangible savings associated with it.
Some are opportunities for increasing the efficiency of staff and do not necessarily translate to dollar
savings.
In summary, our analysis indicates the following options would provide the most significant savings to the
city:
> Consideration of outsourcing of the entire parks maintenance function - the parks
maintenance function encompasses all lines of business associated with parks maintenance
activities (e.g., tree maintenance, landscape maintenance, hardscape maintenance, trails, open
space and preserve maintenance). The city has the opportunity to reduce the cost of providing
parks maintenance through the use of a third party This cost impact is derived from differences in
the current level of salary and benefits, the reduction of non-productive hours paid, and the
economies of scale from a larger parks maintenance operation. Based on comparison of actual
labor costs and initial vendor quotes, the potential savings to taxpayers ranges from $1,700,000 -
$3,866,000. These cost estimates are preliminary; however, the magnitude of stated cost
difference is so significant it warrants a formal process to assess actual cost savings for
outsourcing this function. The city should use a work breakdown structure or other mechanism to
scope the work for equivalent levels of service. We provide a work breakdown structure for the
city in Appendix 1 ofthe report. This provides a detailed listing ofthe type, frequency and quality
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
City of Carlsbad, CA
of work to be performed. Additionally actual realization of any cost savings is also dependent
upon effective performance contract management.
> Consideration of outsourcing of individual lines of business within paries maintenance - if
the city determines that it does not wish to pursue outsourcing ofthe entire park maintenance
function, the analysis indicates that consideration of outsourcing two specific lines of business
may also result in high quality service at a lower cost.
- Landscape maintenance - if the city were to outsource routine parks maintenance (i.e.,
mowing, weeding, pest control, irrigation maintenance) based on a comparison of public to
private sector labor costs the potential exists to save approximately $925,700 per year.
- Tree maintenance - if the city were to outsource tree maintenance, based on information
from comparing city and a vendor quote, potential savings is estimated at nearly $700,000 a
year.
> Consideration of managed competition for hardscape and trails - in these two areas, the
gaps between the current cost of delivering a service and what a vendor could potentially charge
is narrow enough to use managed competition as a strategy for reducing the overall costs of
service.
Consider a wider span of control for Parks & Recreation - while both parks and recreation
are in alignment with the defined span of control, we would recommend that the city adopt a ratio
of 10 employees per manager in order to gain further efficiencies.
Alignment of labor costs with productive hours - productive hours, in this case, is defined as
the number of hours available in comparison to number of hours paid. Currently the city pays for
a higher than average amount of "unproductive hours" (i.e., vacation, leave) in many areas of
Parks & Recreation. In comparison to the Bureau of Labor Statistics' national standard of 92.6%,
the city has an average availability ratio for full time employees of 85.5%. This means that, on
average, the city is paying for 7.1% more unproductive hours than is seen in other sectors for
similar work. The city can address this by either increasing part time staff or using private sector
vendors to provide work.
Alignment of fees charged with market rate and demand-ihe city is known for providing an
exceptional quality of life experiences for its residents through Parks & Recreation programming
and facilities. Currently the city lags behind other regional government entities by 75% in rental
rates. Adjusting fees by even 25% could mean an additional $125,000 in revenue. This
adjustment could be done over a period of years to ease the effect on residents. Similarly fee
levels for aquatics programming are lower than government comparabies for all programs, with
the exception of the masters program. An increase in fees for yearly passes and rentals to non-
public entities could result in $34,500 in additional revenue. Additionally focusing pool scheduling
on higher fee activities could result in an additional $30,500 annually
Enhanced use of technology - ihe city can reduce operational costs and enhance resource
allocation decision-making by using available technology to provide service and manage
operations.
- Promoting On-line Registrations - currently only 35% of registrations are completed online. If
the city were to increase the amount of online registrations to 50%, it could decrease
operational costs by $18,000. An increase to 80% could reduce cost by $100,000. Most
governmental entities are targeting 80% or more online transactions for routine transactions
such as registrations, permit applications, etc.
- Consistent Use of Hansen for Work Management and Performance Tracking - the Hansen
work order system is a powerful system for tracking operational performance. Currently the
parks maintenance function is inconsistent in how it uses the system to capture data. In
conducting this analysis, we found that there was not one line of business that used this
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
City of Carlsbad, CA
system to consistently track work assignments, completion or costs. The city can realize the
full potential of this investment by consistently entering and closing work orders to more
effectively monitor changes in work levels, identify issues with response times or approaches,
and support justification for budget requests. Similarly a consistent method for tracking and
reporting in-house and contractor performance in comparison to metrics is not evident.
Ensuring vendors are meeting performance expectations is critical to ensuring anticipated
cost savings and retention of required levels of service.
The following represents a detailed listing of all opportunities contained in this report. We break them out
into three separate charts: Opportunities related to administration, parks maintenance and recreation
services:
List of Opportunities - Administration (Contract Management, Bargaining Agreement & Staffing)
Area & Type of
Opportunity Opfion
Opportunity Amount
(Annual Unless
Otherwise Noted)
Beginning on
Page Number
Contract Management & Outsourcing
Operational
Efficiency
Eliminate ambiguities in contract
administration by ensuring that the
Department in charge of contract oversight
is the one assessing the quality of work.
Third party assessments should be
eliminated where possible.
Does Not Apply
Operational
Efficiency
Reduce duplication of Hansen work order
data entry through the use of mobile
computing platforms
TBD
Operational
Efficiency
Establish a rigorous performance
contracting process by which all contracts
have work type, frequency and quality
(performance standards) clearly defined.
The city should then use these performance
metrics to establish satisfaction with vendor
services.
Does Not Apply
Operational
Efficiency
Develop contract management training and
a cohesive policy for contract managers to
improve consistency and effectiveness of
contract management.
Does Not Apply Page 23
Operational
Efficiency
Consider establishing positions that are
dedicated to contract oversight. This would
relieve some of the responsibilities of other
staff and create a specialization in contract
management which would allow the city to
more effectively monitor vendor
performance.
Does Not Apply
Operational
Efficiency
Employ "dual contract" management
approach to improve contract oversight and
effectiveness
Does Not Apply
Operational
Efficiency
Establish opportunities for vendor input at
the onset of contracts and foster a
collaborative contractor environment
Does Not Apply
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
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List of Opportunities - Admlnistrafion (Contract Management, Bargaining Agreement & Staffing)
Area & Type of
Opportunity Opfion
Opportunity Amount
(Annual Unless
Otherwise Noted)
Beginning on
Page Number
Memorandum of Understanding
Bargaining Item Consider eliminating standby pay As staff
are compensated for any overtime hours
(with minimum guarantees), we would
argue that staff are adequately
compensated.
$ 22,000 per year
Bargaining Item Complete a full analysis of spending on
uniform and equipment reimbursement.
Some uniforms are currently rented and the
city should consider if this can be expanded
or, if the city might be able to keep some of
these items in stock, as opposed to
reimbursement.
TBD
Page 34
Bargaining Item Consider moving to a lump sum longevity
payment as opposed to a salary step. By
moving to a lump sum longevity payment,
the city would reduce the long term costs.
Lump sum longevity payments do not factor
in to the hourly rates of staff and would
reduce the costs of overtime, call back pay
etc. Many municipalities have moved to this
method of payment to reduce long term
costs.
TBD
Department Staffing
Operational
Efficiency
Establish a benchmark of 10 for span of
control.
TBD
Operational
Efficiency
Consolidate the existing three commissions
into a single commission to free up
approximately .6 FTE
Does Not Apply
Page 40
Bargaining Item Consider a conversion from multiple
categories of leave to a single category of
Paid Time Off (PTO).
TBD
Parks Maintenance List of Opportunifies
Area & Type of
Opportunity Opfion
Opportunity Amount
(Annual Unless
Otherwise Noted)
Beginning on
Page Number
Parks Maintenance General
Direct
Outsourcing
Outsource all parks maintenance activities $ 1,700,000 to
$ 3,866,000
Page 66
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
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Parks Maintenance List of Opportunifies
Area & Type of
Opportunity Opfion
Opportunity Amount
(Annual Unless
Otherwise Noted)
Beginning on
Page Number
Operational
Efficiency
Reduce duplication of Hansen work order
data entry through the use of mobile
computing platforms
$ 20,000
Operational
Efficiency
Eliminate duplication of tree inventory data
between Hansen and contractor's system
$ 7,000
Custodial Services
Operational
Efficiency
Move maintenance of exterior block houses
and restrooms to Property & Environmental
Manaqement Department
No tangible cost
savings to Parks &
Recreation
Page 75
Hardscape/Specialty Maintenance
Operational
Efficiency
Consolidate contracts for one time activities
into citywide master contracts
$ 13,900
Operational
Efficiency
Fully utilize vendors for specialized services No tangible cost
Page 84
Managed
Competition
Perform managed competition for
hardscape activities
$ 216,000
Page 84
Operational
Efficiency
Utilize alternative materials for Carrillo
Ranch parking lot
TBD
Landscape Maintenance
Operational
Efficiency
Expand the use of synthetic turf to enhance
user's experience and achieve potential
cost savings
$ 71,300
Operational
Efficiency
Implement cost containment on fuel Deferred to
Property &
Environmental
Management Page 98
Direct
Outsourcing
Outsource landscaping activities $ 925,700
Direct
Outsourcing
Outsource pest control activities that are
currently conducted in-house
$14,400 to $17,900
Trails/Open Space/ Preserve Maintenance
Operational
Efficiency
Expand use of Volunteer Trail Program to
meet trail development goals, enhance
existing trails or reduce costs
$ 6,700
Page 112
Managed
Competition
Conduct managed competition for trail
maintenance activities
$ 111,300
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
City of Carlsbad, CA
Parks Maintenance List of Opportunities
Area & Type of
Opportunity Option
Opportunity Amount
(Annual Unless
Otherwise Noted)
Beginning on
Page Number
Tree Maintenance
Direct
Outsourcing
Outsource tree maintenance activities $ 690,000 Page 122
Recreafion Services List of Opportunifies
Area & Type of
Opportunity Option
Opportunity Amount
(Annual Unless
Otherwise Noted)
Beginning on
Page Number
Aquatic Services
Operational
Efficiency
Increase fee levels $ 34,500
Operational
Efficiency
Focus pool use on high revenue generation
activities
$ 30,500
Operational
Efficiency
Centralize registration and marketing Not available
Operational
Efficiency
Expand the use of consortium or master
contract based purchasing for pool supplies
Not available
Page 135 Direct
Outsourcing
Outsource routine pool maintenance $ 41,200 Page 135
Direct
Outsourcing
Increase part time and/or contractual staff $ 0-107,000
Direct
Outsourcing
Outsource custodial for pool and aquatics
park bathrooms
Include as part of
Property &
Environmental
Management
review
Historical Parks Services
Operational
Efficiency
Enhance coordination with Friends of
Carrillo Ranch No tangible savings
Operational
Efficiency
Coordinate grant writing among city
departments No tangible savings Page 144
Direct
Outsourcing
Outsource educational programming, visitor
services and tours
$ 21,900-$60,100
Recreation Services
Operational
Efficiency
Promote online registrations $43,800-$112,400
first year to
$46,800-$140,400
annually
Page 153
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
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Recreafion Services List of Opportunifies
Area & Type of
Opportunity Opfion
Opportunity Amount
(Annual Unless
Otherwise Noted)
Beginning on
Page Number
Operational
Efficiency
Reduce percent of fee revenue provided to
instructors from 65% to 60%
$ 25,000
Direct
Outsourcing
Outsource traditional summer and spring
camp programs
$ 10,500-$21,500
Direct
Outsourcing
Outsource coordination of classes and
sports programminq
TBD
Rental Services
Operational
Efficiency
Centralization of staff $ 93,900
Page 163 Operational
Efficiency
Adjust rental rates $ 125,000 Page 163
Direct
Outsourcing
Rental support services TBD
Page 163
Senior Services
Operational
Efficiency
Administrative support reduction $ 25,900
Page 170 Direct
Outsourcing
Outsource transportation services $ 12,500 per year
$ 30,000 one-time
Page 170
Direct
Outsourcing
Outsource congregate meal support $ 21,000
Page 170
In quantifying potential fiscal impact, it is important to note that:
1) These estimates are not accurate projections of actual savings, but rather are intended to be
preliminary estimates used to determine whether or not an area appears to warrant consideration
for a different service delivery approach.
2) In those instances where direct outsourcing is recommended and a cost savings is estimated, this
estimate is derived from vendor cost projections developed based on a detailed work breakdown
structure for that specific line of business or activity which details service levels as currently
performed by the city Vendors who responded indicated that visual inspections of facilities and
assets would be necessary to provide a final estimated cost.
It is important to note that some of these recommendations can be implemented in short order without
significant disruption to service or effort, and others may take time to transition service delivery and/or
negotiate key third party contracts.
While many of these options offer significant opportunity to reduce the operating budget relative
to Parks & Recreation services, of equal importance is the need to ensure that any change in
service delivery approach or provider does not reduce the level of service provided to the public.
In order to address the issue of maintaining service levels, we have assumed the following in completing
the analysis:
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BEST VALUE SERVICES PROJECT: PARKS & RECREATION OPERATIONAL ASSESSMENT
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> Any estimate of cost from a vendor uses the work breakdown structure verified by the city as the
current approach and performance metrics for providing that service.
> The city will hold the contractor to the same level of performance using its experience in
performance management with the modifications indicated below.
> The use of contractors for providing selected services takes advantage of their expertise in
providing specialty services (e.g., operational efficiencies, economies of scale in materials
purchased, etc.).
Again, it is important to note that, until the city makes decisions about the specific course of
action to follow and official request for proposal or bid processes are completed, the estimates
included herein are not guarantees of actual savings, but rather estimates of potential savings.
The most critical element related to the maintenance of existing service levels will be the presence of a
solid and robust performance management framework for both internally and externally delivered
services. This will require:
> Enhancement of the existing performance management framework for vendors and third
party contracts - while the city has a solid vendor performance management framework, we
anticipate that this framework will need to be strengthened through more explicit performance
metrics, enhanced formality of the contract performance management hierarchy (i.e., who is the
daily sign off, who is monitoring performance), and regular comparison between service and cost
levels to ensure cost effectiveness without impact on service levels.
> Increased formality of internal performance management frameworks - the level of work
performance tracking and specificity of how and by whom operational statistics are kept will need
to be formalized to focus on the most critical measures and quantifying the level of effort required
relative to various service levels (e.g., if there is a different expectation in terms of service level
that warrants a higher level of work effort, that will need to be clearly defined).
> Focus of internal efforts on those services best performed internally may allow an actual
enhancement to service levels given the narrower spectrum of services provided.
There are no guarantees that service levels will not be impacted in any manner; however, through the use
of sound performance contract negotiation and management, the introduction of clear operational
statistics tracking, and the ability of the city to partner with vendors to provide services in select areas by
taking advantage of vendor specialization and expertise, the city should be well positioned to carry out its
Best Value Services program.
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July 19, 2012 C#^^ Y
Kim Goodman
1749 Verdin Court
Carlsbad, CA 92011
To the City of Carlsbad:
I am a resident of Poinsettia Heights, a wonderful community that is adjacent to Aviara Community
Park. In fact, our community Is gated, and our back gate leads directly into the park. I walk through
that beautiful park every day, often more than once a day.
I have recently heard that the City of Carlsbad in evaluating whether to change the way the park is
maintained, and to possibly shift from using city employees to outsourcing to a company that may
be less expensive. I am writing to request, as a Carlsbad resident and taxpayer, that this NOT be
done! The city employees that work at that park do a great Job. Aviara Community Park is
beautifully groomed, very clean, and safely maintained at all times. The park attendants are friendly
and respectful, and many families In the neighborhood know them and are comfortable with them
being around their young children. The attendants are remarkably positive extensions ofthe City of
Carlsbad, and to replace them with an outsourced company would be a huge loss for the residents
of this area who frequent the park.
Of course I am not privy to the financial concerns behind your consideration, and I can appreciate
that you have an obligation to review those. But there are a multitude of non-financial aspects to
consider as well:
1. Quality of work. The attendants currently employed by the city clearly take great pride in the
condition of the park and work very hard to maintain it at the highest level. I see them doing it daily.
I have often taken guests with me to the park, and they always comment that it is one of the
prettiest, cleanest, nicest parks they have seen. Bringing in a new, unknown company that has no
vested interest in the park very well may not perform at the same level, or care as much.
2. Personnel. The current attendants are familiar to park guests, always going out of their way to
be friendly and helpful. I feel safe walking through the park alone in early hours ofthe morning, as I
always see the same friendly faces and hear the same warm "hello's''. The families that are there
throughout the day with young children are comfortable with the current attendants, knowing they
are tenured employees ofthe city who have been "checked out" for criminal records, etc. There's no
guarantee that a new organization will do that as strenuously and thoroughly as the City....and the
City will have no control to make them do that. There's a potential for new under-trained, under-
researched staff to be intermingling with families with kids every parent's fear of a potential
molester, pedophile, rapist or worse coming in as an employee. The City will have no control over an
outsourced contractor's turnover rate, or who they hire.
3. Outsourcing. Nothing says Hie City doesn't care about its residents or constituents" like
outsourcing. It is the dirty word of the employment world right now. Can the City of Carlsbad justify
eliminating the jobs of long-term, hard-working employees, some close to collecting pensions, and
OUTSOURCING them to an unknown, uncontrollable company just because they are cheaper??
Look at the outrage over Mitt Romney having done the same thing - intentionally shifting American
jobs to other countries. And look at the negative impact if s had on our country. What the City is
proposing is WRONG for Carisbad. It's WRONG to do this to people in general.
Thank you for letting me voice my opinion. I hope you at least consider that I, as a taxpayer - and
many of my neighbors - do NOT want the park attendants at Aviara Community Park replaced with
unknown service, unknown safety, and outsourcing in general.
Thankyou. , ,
(/I
Donna Heraty
From:
Sent:
To:
Subject:
Karen Kundtz
Tuesday July 24, 2012 1:30 PM
Donna Heraty
FW: Agenda item # 8
Another.
From: Lisa Hildabrand
Sent: Tuesday, July 24, 2012 1:16 PM
To: Council Archive
Cc: Lorraine Wood; Karen Kundtz
Subject: Agenda item # 8
FYI - Below are commonly requested stats provided by the Parks and Recreation department.
Number of parks - 31 (15 parks and 16 special use areas which are defined as parks less than five acres)
Developed park acreage - 360 (approximately 50% is maintained in house and 50% is contracted out; actual nunibers
54% contract, 46% in house)
Number of trees - 20,000 (approximately 60% contracted out, 40% in house)
Miles of trail -47 (38 are natural, 9 are paved; all but coastal rail trail is maintained in house)
Natural open space acreage - 600 on 13 city owned properties (100% contracted out)
Date:_
DistrTbutit
City Clerk
Asst. City Clerk
Deputy Clerk
Book
PARKS AND TREES MAINTENANCE DIVISION
Size Maintenance Via Site Type
Ownership Address Acre^ Contract Citv School Park Other
Parks/Schools/Preserves
Aviara Park City 6425 Ambrosia Lane 24 X 24
Beach Trianale/Accesses City Ocean Street 0.7 X 0.7
Beach Bluff/Sea Wall City Carlsbad Blvd 3 X 3
Calavera Hills Park City 2997 Glasgow Drive 17 X 17
Carrillo Ranch City 6200 Flying LC Lane 26 X 26
Chase Field City 3450 Harding Street 2.3 X 2.3
Community Garden City Laguna Drive + Elmwood 1.3 X 1.3
Dowtown City Downtown Planters 5 X 5
Holiday Park City Pio Pico + Chestnut 7.5 X 7.5
HS Tennis Courts CUSD Bassword Ave + Vallev St 3 X 3
La Costa Canvonv Park City Pueblo Street & Rana Court 12,3 X 12.3
Laguna Riviera Park City Kelly Drive @ Park Drive 4 X 4
Magee Park City 258 Beech Avenue 3.1 X 3.1
Pine Park Citv 3333 Harding Street 8 X 8
Poinsettia Park City 6600 Hidden Valley Road 42 X 42
Stagecoach Park City 3420 Camino de los Coches 28.5 X 28.5
Aviara School CUSD 6900 Ambrosia 5 X 5
Alga Norte Park City Poinsettia Lane + Alicante Road 32 X 32
Batiquitos Dr. Slopes City E. Side Batiquitos Dr, S. of Daisy 6 X 6
Batiquitos Dr. Open Space City W. Side Batiquitos Dr., S. of Daisy 2.7 X 2.7
Buena Vista Eco Reserve State Jefferson 1.2 X 1.2
Buena Vista School CUSD Buena Vista Avenue 3.2 X 3.2
Calavera Hills Trailhead City Cartsbad Village Drive & College 0.3 X 0.3
Cadencia Park City 3310 Cadencia 5.4 X 5.4
Cannon Park City Cartsbad Blvd &. Cannon 1.7 X 1.7
Cannon Lake Park City Cannon Road + El Arbol Drive 6.7 X 6.7
Car Country Park Citv Paseo Del Norte 1.5 X 1.5
Carlsbad Golf Course O S. City Adjacent to 5800 Crossings Dr. 198.2 X 198.2
Carlsbad Village Open Space City Adjacent to 2700 Carlsbad Village 12.7 X 12.7
Carrillo Ranch Open Space City Adjacent to 6200 Flying LC Lane 16.6 X 16.6
Coastal Rail Trail Planters NCTD E. of RR, Oak to Tamarack Aves 3.5 X 3.5
Doa Park City Cartsbad Village Drive @ Pontiac 1.7 X 1.7
El Fuerte Park City 6889 El Fuerte st 4.6 X 4.6
Hidden Canyon Park City Vancouver St 22.3 X 22.3
Hosp Grove Forest City Marron + Jefferson - Monroe 67.2 X 67.2
Hosp Grove Park City Jefferson + Marron 5.5 X 5.5
Hosp Grove Trailheads Citv Wickam Way / Monroe Street 2 X 2
Jefferson School CUSD Jefferson Street 3.6 X 3.6
La Costa/Romero Open Sp. City W. of Romeria, La Costa + Levante 13 X 13
La Costa Canyon Open Sp. City W. of Pueblo Street + Rana Court 8.9 X 8.9
Lake Calavera Open Space City W. side Tamarack Ave. + Strata Dr 256.1 X 256,1
Levante/La Costa Heights EUSD Levante Street 6 X 6
Lagoon Lane Open Space City Lagoon Ln. + Batiquitos Dr. 2.7 X 2.7
Los Manos Reserve City Adjacent to Los Manos Reservoir 20.5 X 20 5
Macario Cvn. Open Space City Faraday Ave, S, of Whitman Wy. 33.2 X 33.2
Magnolia School CUSD 1905 Magnolia 4.5 X 4.5
Maxton Brown Park City 500 Laguna Drive 1.4 X 1,4
Median Planters City City Wide 65 X 65
Melrose Triangle City Melrose Dr + Rancho Santa Fe Rd 3.5 X 3.5
Oak Park City Pio Pico &. CVD 2 X 2
Parkways/Roadsides City City Wide 8 X 8
Palomar Triangle City Palomar & Cartsbad Blvd. 3.5 X 35
Pio Pico City Pio Pico + Laguna Dr. 0.8 X 0.8
Poinsettia Open Space City Adiacent to 6600 Hidden Valley Rd. 12.4 X 12.4
Research Ctr. Open Space 2.6 Adjacent to 1635 Faradav Ave. 2.6 X 2.6
Robertson Ranch City Wind Trail Way + Cannon Rd 13 X 13
Skatepark City 2560 Orion Way 3 X 3
Segovia Accesses City Segovia Way 02 X 0.2
Vallev Jr. High CUSD 1645 Magnolia 8.5 X 8.5
Veteran's Memorial Park City Faraday Ave, S of Whitman Way 57 X 57
Veteran's Open Space City Faraday Ave., N. of Macano Cyn. 21.1 X 21.1
Woodbine Banks City E. Side of ECR, Chestnut-Tamarack 11 X 11
Zone 5 City 1600 Faraday Ave 15 X 15
Total: Parks/Schools/Preserves 1164.2 976.5 187.7 34 356 774.2
Facilities
College Blvd Comm Lots City College Blvd + Palomar Pointe Wy 8 X 8
Parks Yard City 1166 Cartsbad Village Dnve 2.2 X 2.2
Citv Hall/Cole Library City 1200 Cartsbad Village Drive 4 X 4
Dove Librarv City 1775 Dove Lane 2 X 2
Faradav Center City 1635 Farady Ave 4 X 4
Farmers Property City 5815 El Camino Real 9 X 9
Harding Community Center City 3096 Harding Street 1 X 1
Hawthorne Property City Adjacent to Las Palmas Building 3.3 X 3.3
Las Palmas Building City 2075 Las Palmas Drive 2 X 2
Librarv Learning Center City 3368 Eureka Place 0.5 X 0.5
Maintenance and Operations City 5950 El Camino Real 0.7 X 0.7
Safety Center/Flleet Maint City 2560 Orion Way 15 X 15
Scanlon House/Arts Office City 2955 Elmwood 0.5 X 0.5
Senior Center Complex City 799 Pine 1.6 X 1.6
Streets & Facilities Maint City 405 Oak Avenue 0.4 X 0.4
Swim Complex City 3401 Monroe Street 1 X 1
Total: Facilities 55.2 53 2.2 55.2
GRAND TOTALS j 1219.4 M 1 3.56 1 829.4
\
1 « • c
Parks and Recreation Operational Assessment
Responses to Questions
Question: On page 67 there's a table showing one vendor that responded to Baker Tilly's request,
claiming it could bundle parks maintenance services for $2.8 million. BT added about $1.2 million in
contract management/overhead costs.
Question: In a table on page 123 we find a vendor's estimate that they could do tree maintenance for
$650k. BT adds $330k for contract management.
Response: It is unclear what the question is for these two items. The figures identified in these questions
are correct. Additional clarification is needed. The $1.2 million reflects $848,000 for 9 PTEs for contract
management (average salary and benefits of staff currently performing this work was used) and $364,643
of prorated indirect costs. The $329,812 figure reflects. 2.5 PTEs for contract management (using the
same average salary and benefits figure used, in the parks maintenance discussion.
Question: On page 100 the claim is made that $926k can be saved in salaries, but there's no breakdown
that I could find showing a vendor's estimate and contract management costs. Maybe I missed it, but I
searched pretty carefully.
Response: The estimated $925,732 was not calculated using a vendor estimate and associated contract
management costs. The figure presented here relied on the estimated difference between total
compensation between Carlsbad staff and estimated total compensation for private sector employees
based on ERI and Bureau of Labor statistics data.
Conversations with city staff indicated that a Maintenance Worker II best represented the cost of a worker
conducting landscaping activities. The average salary and total compensation were calculated using
Maintenance II workers in the Parks & Recreation Department. The public and private salaries were
obtained from ERI data. In consideration of the work performed by city landscaping staff, it was
determined that the positions of gardener and grounds keeper were best in alignment with the city.
To calculate the cost savings, we applied the 55% difference in total compensation between a Carlsbad
Maintenance II worker and a private sector worker to the total Landscaping personnel costs in FY11.
Question: I continue to find caveats in the report about cost saving estimates, advising the reader not to
think of them as "expectations." The salary comparisons are especially shaky, with no clarification of how
they were derived. Averages can be misleading, especially if they're based on small numbers. And
combining national job titles "gardener" and "groundskeeper" without knowing where these jobs are is
pretty shaky.
Response: To estimate public and private sector salaries in Carlsbad for several parks maintenance
functions, we used a dataset compiled by the Economic Research Institute (ERI). The entire dataset is
comprised of over 5,800 jobs, many of which have been studied since 1967. Analyses are assembled
using millions of data points that are collected from public records including the Security and Exchange
Commission and IRS returns. In addition, data is collected from online surveys of employers and
individuals in 78 U.S. industries. Collectively, this information is updated on a quarterly basis to ensure
the most up to date data.
Date:_
Distribution:
City Clerk
Asst. City Clerk
rV%rM 1*%/ r^l^Mrlr
To isolate the most relevant data, ERI is able to provide specific salary estimates based on job title, level
of experience (in years), and geographic region. For the purposes of this analysis, we were able to isolate
salary estimates specifically to the Carlsbad region.
Total compensation was calculated using data from the Bureau of Labor Statistics March 2012 Employer
Costs for Employee Compensation report, "service" occupation set. This data indicates that for public
sector employees, total compensation is 59.4% of salary, and for private sector employees, 75.2% of
salary.
Baker Tilly's task was to determine where opportunities for cost savings were for the Parks & Recreation
Department and not to find exact figures based upon a rigorous RFP process. As such, the caveats
regarding cost savings estimates were included. Actual cost savings can only be determined with a fornnal
RFP process. Until vendors commit to a contractual price for service levels consistent with current in-
house staff, it is impossible to establish a definitive cost savings amount. Our track record of estimating
cost savings for outsourcing, consolidated departments and operational efficiencies is solid (e.g. typically
a variation of no more or less than 10%) based on over 15 years for doing such work.
Our cost savings estimates are based on either initial vendor estimates or estimated differences in salary
levels between in-house staff and similar jobs in the Carlsbad community (based on ERI and Bureau of
Labor Statistics data). The cost savings are intended as estimates that should be used to guide decision
making. Where possible, we used additional data points in order to validate initial findings such as the
Segal Salary Study conducted independently of this work. The figures presented indicate that there are
substantial opportunities for the city to reduce costs.
Question: On page 66 in parks maintenance full outsourcing model BT is recommending not to outsource
Preserve Management. How much does that cost?
The Open Space/Trails/Preserve line of business contains multiple activities including trails and preserve
management. Costs were initially combined with the data provided to us. We worked with the Carlsbad
staff to isolate costs between the two major activity types: trails and preserve management.
Below is the breakdown of preserve management costs and trails costs. These costs are primarily from
preserve management contracts that execute the vast majority of preserve maintenance activities and the
associated contract management. Total preserve management costs for FY11 total $733,871. Based on
our analysis, preserve management is being conducted very efficiently using trusted, cost effective, and
high value vendors and the current model of service provision should not be modified.
r Direct and Indirect Costs FY09 Actuals FY10 Actuals FY11 Actuals
Trail Costs Only $ 507,548 $ 432,149 $ 434,326
Preserve/Open Space Costs Only $ 197,380 $ 326,007 $ 733,871
Question: I read the comment in NCTimes regrading lawsuit against BT. What do we know and how does
that impact their work for us?
Baker Tilly Statement regarding Aqua Finance lawsuit:
"In reference to the legal matter between Baker Tilly and Aqua Finance, we are very disappointed by the
jury's verdict and believe the damages awarded in this case are excessive. We continue to believe that
our work and conduct did not contribute to Aqua Finance's difficulties, and we plan to appeal. We believe
the eventual result of this matter will not materially impact the financial viability and capability of Baker
Tilly.
Baker Tilly has flourished since 1931 by focusing on providing exceptional client service. Our success in
this regard is indicated by our strong growth and outstanding client satisfaction survey results. We are
committed to the belief that the American justice system will deliver a fair result at the conclusion of our
appeal process. In the meantime our focus will remain on making a difference for our people and clients."
Donna Heraty
From:
Sent:
To:
Subject:
Attachments:
Karen Kundtz
Monday July 23, 2012 11:41 AM
Sherry Freisinger; Donna Heraty
FW: Agenda item # 8 - Baker Tilly report
BT Responses to Questions from Council -Final.docx
Info for council meeting.
Karen
From: Lisa Hildabrand
Sent: Monday, July 23, 2012 11:37 AM
To: Council Archive
Cc: Ronald Kemp; Lorraine Wood; Karen Kundtz
Subject: Agenda item # 8 - Baker Tilly report:
Attached are responses from Baker Tilly to some questions posed about the report.
In addition, the following question was asked:
Will outsourcing create the need for more administrators? I know Carrollton, Texas hired a Director of Competition at the
asst. city manager level, who added an office for "Organizational Development" to install its Managed Competition plan.
Will you ask for another position at the same time worker bees are being laid off?
Response: / do not have any plans to create a separate department to manage the Best Value process as it progresses
through the other departments. This is the first operational assessment we have done, ond thus has taken a lot of work
by all involved. I anticipate the level of effort will even out as we become more adept and experienced in doing the
evaluations.
We do anticipate needing more contract administrators in the parks and recreation department if we contract out
additional work. Baker Tilly estimated that we would need 9 of these positions if we contracted for the parks
maintenance and tree trimming work. We currently have one in the department (as we do contract out for a variety of
parks maintenance work now). It is a CCEA represented position. Baker Tilly anticipated that the additional positions
would be in a similar range. The cost of these is added into the comparison of costs in the report.
Date:_
Distribution:
City Clerk
Asst. City Clerk
Deputy Clerk
Book
City of CarlsbadParks & Recreation Operational AssessmentChristine Smith, PrincipalShelley Fulla, Senior ManagerJuly 24, 2012
Project Background and Objectives>Operational assessment:Key component of the City of Carlsbad’s Best Value Services ProgramAligns with strategic focus of being a sustainable organizationFocused on providing the best quality at the lowest cost>Analyzed Parks & Recreation Department operations to:Evaluate department performanceQuantify current resource allocations and expendituresEnsure that the city’s resources and strategic priorities are alignedDetermine the feasibility of alternative service delivery approaches1
Project Approach and Methodology:Opportunities Continuum2Productivity Enhancements• Functional Analysis• Lean Government• Process Re-engineering• Performance ManagementOutsource, Consolidated & Shared Services• Cost Sharing Arrangements• Vendor Evaluation & Management• Outsourcing and/or Managed CompetitionStrategic Resource Alignment• Productivity Analysis• Governance Enhancement• Costs of Bargaining Agreement• Contract Analysis• Risk Assessment
Project Approach and MethodologyConducted staff interviewsReviewed documentation including service statistics, financial information, polices and procedures, etc.Developed work breakdown structure to define levels of serviceComparison against industry benchmarksComparison to similar regional municipalities Comparison to private sector salary data and informal cost estimates by private vendors3
Project Approach and MethodologyParks & Recreation Department Lines of BusinessParks MaintenanceCustodial ServicesHardscape Specialty MaintenanceLandscape MaintenanceTrails/Open Space/Preserve MaintenanceTree MaintenanceRecreation ServicesAquatic ServicesHistoric Park ServicesRecreation ServicesRental ServicesSenior Services4
Summary of Opportunities48 Opportunities$2.3 – 4.7 million in cost savings, revenue enhancements, and resource reallocations5Opportunity Area OpportunitiesContract Management and Outsourcing7Memorandum of Understanding3Department Staffing 3Parks Maintenance General 3Custodial Services 1Hardscape/ Specialty4Landscape 4Opportunity Area OpportunitiesTrails/ Open Space/ Preserve2Tree 1Aquatic Services 7Historic Park Services3Recreation Services 4Rental Services 3Senior Services 3
Key Opportunities6>Consideration of outsourcing of the entire parks maintenance function>Consideration of outsourcing of individual lines of business within parks maintenance>Consideration of managed competition for hardscape and trails>Consider a wider span of control for Parks & Recreation>Alignment of labor costs with productive hours>Alignment of fees charged with market rate and demand>Enhanced use of technology
OpportunityOpportunity DescriptionConsideration of outsourcing the entire parks maintenance functionOpportunity Amount$1,700,000 - $3,866,000Report ReferencePg. 66Cost ComparisonCurrent Internal Cost $7,879,000 Fully Outsourced Option $4,012,643 Potential Savings $3,866,357 Cost Comparison Based on Vendor EstimatePotential Savings Due to Differences in Labor CostsHardscape$ 215,985Landscape$ 925,732 Trails$ 111,337Trees$ 466,797PotentialSavings $ 1,719,851Range of Estimated Savings7
Opportunity DescriptionConsideration of outsourcing of individual lines of business within parks maintenanceOpportunity AmountLandscaping: $925,700Trees: $700,000Report ReferencePg. 100 and pg. 122LandscapeOutsourcing rate (% of acreage)Carlsbad Comparable Average54% 85%Total Compensation Difference Estimate 55%Carlsbad Private Sector$75,796 $43,307TreesCost of Service DifferenceCarlsbad Cost Outsourced Option$1,670,00 $980,000Total Compensation Difference Estimate 55%Carlsbad Private Sector$87,909 $49,8168Opportunity
Opportunity DescriptionConsideration of managed competition for hardscape and trailsOpportunity AmountHardscape: $216,000Trails: $111,300Report ReferencePg. 86 and pg. 112Recommended for managed competition because:>Smaller difference in cost>Opportunities for efficienciesHardscapeTotal Compensation Difference Estimate 45%Carlsbad Private Sector$93,843 $59,152TrailsTotal Compensation Difference Estimate 55%Carlsbad Private Sector$75,796 $43,3079Opportunity
Opportunity DescriptionConsider a wider span of control for Parks & RecreationEstimated SavingsTBDReport ReferencePg. 41Percent Mgmt. Span of ControlCity of Carlsbad- Actuals (2009-11)Carlsbad Parks 11.9% 7.4Carlsbad Recreation 11.0% 8.1Average of Comparables (11 data points) 14.6% 6.9Span of Control Comparison10>The city is within a comparable range of 7-10 direct reports per manager, but may gain efficiencies through a higher ratio.>To achieve this, the city may consider:Eliminate the vacant Recreation Area Manager positionRestructure Recreation Area ManagersOpportunity
Opportunity DescriptionAlignment of labor costs with productive hoursOpportunity AmountTBDReport ReferencePg. 50Average Annual Leave Usage by Full Time Staff11OpportunityLeave Type Days UsedVacation 12.50Sick 8.16Holiday 13.06Bereavement 1.36Workers Compensation 3.40Other Leave (Includes Compensatory and Executive Leave) 4.64Total 43.12
Opportunity DescriptionAlignment of fees charged with market rate and demandOpportunity AmountAquatics: $34,500Recreation Fee Revenue: $25,000Rental Rates: $125,000Report ReferenceAquatics: Pg.135Recreation Fee Revenue: Pg. 154Rental Rates: Pg. 162Current Rate Proposed Rate Revenue IncreaseYearly Pass - NR $ 270 $ 400 $22,188Aquatics Example Fee Increase12OpportunityRental Rate Difference and Possible IncreasesOptionsCurrent RevenueAnnual Revenue Five Year TotalFuture YearsYear 1 Year 2 Year 3 Year 4 Year 5A: 25% Increase in First Year$500,000 $625,000 $625,000 $625,000 $625,000 $625,000 $3,125,000 $625,000B: 5% Increase over 5 Years$500,000 $525,000 $551,250 $578,813 $607,753 $638,141 $2,900,956 $638,141
Opportunity DescriptionEnhanced used of technologyOpportunity AmountOnline Registrations: $46,800-140,400 annuallyConsistent use of Hansen: TBDReport ReferencePg. 153 and Pg. 68Item Amount NoteAddition of 3 kiosks at $1,000 each$ (3,000) one time costSavings from reduced staffing$ 46,808 annual savingsNet Savings $ 43,80813OpportunityItem Amount NoteAddition of 3 kiosks at $1,000 each$ (3,000) one time costOne-time marketing campaign$ (25,000) one time costSavings from reduced staffing$ 140,425 annual savingsNet Savings $ 112,425Scenario 1: 80% Online Enrollment Scenario 2: 50% Online Enrollment
Additional Opportunities•20 additional opportunities with less impact. These include a continuum of efficiency, policy, organizational and outsourcing options:• Consideration of adopting a PTO policy• Establishment of positions dedicated to contract oversight• Utilize alternative materials for Carrillo Ranch• Outsource pest control activities• Centralization of staff14
Questions?15
Welcome to theJuly 17, 2012 City Council Workshop
City of CarlsbadParks & Recreation Operational AssessmentChristine Smith, PrincipalShelley Fulla, Senior ManagerJuly 17, 2012
Project Background and Objectives>Operational assessment:Key component of the City of Carlsbad’s Best Value Services ProgramAligns with strategic focus of being a sustainable organizationFocused on providing the best quality at the lowest cost>Analyzed Parks & Recreation Department operations to:Evaluate department performanceQuantify current resource allocations and expendituresEnsure that the city’s resources and strategic priorities are alignedDetermine the feasibility of alternative service delivery approaches1
Project Approach and Methodology:Opportunities Continuum2Productivity Enhancements• Functional Analysis• Lean Government• Process Re-engineering• Performance ManagementOutsource, Consolidated & Shared Services• Cost Sharing Arrangements• Vendor Evaluation & Management• Outsourcing and/or Managed CompetitionStrategic Resource Alignment• Productivity Analysis• Governance Enhancement• Costs of Bargaining Agreement• Contract Analysis• Risk Assessment
Project Approach and MethodologyConducted staff interviewsReviewed documentation including service statistics, financial information, polices and procedures, etc.Developed work breakdown structure to define levels of serviceComparison against industry benchmarksComparison to similar regional municipalities Comparison to private sector salary data and informal cost estimates by private vendors3
Project Approach and MethodologyParks & Recreation Department Lines of BusinessParks MaintenanceCustodial ServicesHardscape Specialty MaintenanceLandscape MaintenanceTrails/Open Space/Preserve MaintenanceTree MaintenanceRecreation ServicesAquatic ServicesHistoric Park ServicesRecreation ServicesRental ServicesSenior Services4
Summary of Opportunities48 Opportunities$2.3 – 4.7 million in cost savings, revenue enhancements, and resource reallocations5Opportunity Area OpportunitiesContract Management and Outsourcing7Memorandum of Understanding3Department Staffing 3Parks Maintenance General 3Custodial Services 1Hardscape/ Specialty4Landscape 4Opportunity Area OpportunitiesTrails/ Open Space/ Preserve2Tree 1Aquatic Services 7Historic Park Services3Recreation Services 4Rental Services 3Senior Services 3
Key Opportunities6>Consideration of outsourcing of the entire parks maintenance function>Consideration of outsourcing of individual lines of business within parks maintenance>Consideration of managed competition for hardscape and trails>Consider a wider span of control for Parks & Recreation>Alignment of labor costs with productive hours>Alignment of fees charged with market rate and demand>Enhanced use of technology
OpportunityOpportunity DescriptionConsideration of outsourcing the entire parks maintenance functionOpportunity Amount$1,700,000 - $3,866,000Report ReferencePg. 66Cost ComparisonCurrent Internal Cost $7,879,000 Fully Outsourced Option $4,012,643 Potential Savings $3,866,357 Cost Comparison Based on Vendor EstimatePotential Savings Due to Differences in Labor CostsHardscape$ 215,985Landscape$ 925,732 Trails$ 111,337Trees$ 466,797PotentialSavings $ 1,719,851Range of Estimated Savings7
Opportunity DescriptionConsideration of outsourcing of individual lines of business within parks maintenanceOpportunity AmountLandscaping: $925,700Trees: $700,000Report ReferencePg. 100 and pg. 122LandscapeOutsourcing rate (% of acreage)Carlsbad Comparable Average54% 85%Total Compensation Difference Estimate 55%Carlsbad Private Sector$75,796 $43,307TreesCost of Service DifferenceCarlsbad Cost Outsourced Option$1,670,00 $980,000Total Compensation Difference Estimate 55%Carlsbad Private Sector$87,909 $49,8168Opportunity
Opportunity DescriptionConsideration of managed competition for hardscape and trailsOpportunity AmountHardscape: $216,000Trails: $111,300Report ReferencePg. 86 and pg. 112Recommended for managed competition because:>Smaller difference in cost>Opportunities for efficienciesHardscapeTotal Compensation Difference Estimate 45%Carlsbad Private Sector$93,843 $59,152TrailsTotal Compensation Difference Estimate 55%Carlsbad Private Sector$75,796 $43,3079Opportunity
Opportunity DescriptionConsider a wider span of control for Parks & RecreationEstimated SavingsTBDReport ReferencePg. 41Percent Mgmt. Span of ControlCity of Carlsbad- Actuals (2009-11)Carlsbad Parks 11.9% 7.4Carlsbad Recreation 11.0% 8.1Average of Comparables (11 data points) 14.6% 6.9Span of Control Comparison10>The city is within a comparable range of 7-10 direct reports per manager, but may gain efficiencies through a higher ratio.>To achieve this, the city may consider:Eliminate the vacant Recreation Area Manager positionRestructure Recreation Area ManagersOpportunity
Opportunity DescriptionAlignment of labor costs with productive hoursOpportunity AmountTBDReport ReferencePg. 50Average Annual Leave Usage by Full Time Staff11OpportunityLeave Type Days UsedVacation 12.50Sick 8.16Holiday 13.06Bereavement 1.36Workers Compensation 3.40Other Leave (Includes Compensatory and Executive Leave) 4.64Total 43.12
Opportunity DescriptionAlignment of fees charged with market rate and demandOpportunity AmountAquatics: $34,500Recreation Fee Revenue: $25,000Rental Rates: $125,000Report ReferenceAquatics: Pg.135Recreation Fee Revenue: Pg. 154Rental Rates: Pg. 162Current Rate Proposed Rate Revenue IncreaseYearly Pass - NR $ 270 $ 400 $22,188Aquatics Example Fee Increase12OpportunityRental Rate Difference and Possible IncreasesOptionsCurrent RevenueAnnual Revenue Five Year TotalFuture YearsYear 1 Year 2 Year 3 Year 4 Year 5A: 25% Increase in First Year$500,000 $625,000 $625,000 $625,000 $625,000 $625,000 $3,125,000 $625,000B: 5% Increase over 5 Years$500,000 $525,000 $551,250 $578,813 $607,753 $638,141 $2,900,956 $638,141
Opportunity DescriptionEnhanced used of technologyOpportunity AmountOnline Registrations: $46,800-140,400 annuallyConsistent use of Hansen: TBDReport ReferencePg. 153 and Pg. 68Item Amount NoteAddition of 3 kiosks at $1,000 each$ (3,000) one time costSavings from reduced staffing$ 46,808 annual savingsNet Savings $ 43,80813OpportunityItem Amount NoteAddition of 3 kiosks at $1,000 each$ (3,000) one time costOne-time marketing campaign$ (25,000) one time costSavings from reduced staffing$ 140,425 annual savingsNet Savings $ 112,425Scenario 1: 80% Online Enrollment Scenario 2: 50% Online Enrollment
Additional Opportunities•20 additional opportunities with less impact. These include a continuum of efficiency, policy, organizational and outsourcing options:• Consideration of adopting a PTO policy• Establishment of positions dedicated to contract oversight• Utilize alternative materials for Carrillo Ranch• Outsource pest control activities• Centralization of staff14
Questions?15
Parks & RecreationOperational AssessmentStaff RecommendationsJuly 24, 2012
Parks & Recreation Operational Assessment•Staff Recommendations:–Operational efficiencies to be considered for implementation:•Increase Recreation span of control.•Enhance use of technology–Promote on‐line registration.–Consistent use of Hansen Work Management System.–Increase mobile computing opportunities.•Decrease Recreation instructor contract split.•Senior Transportation Services •Other recommendations will be evaluated/implemented as soon as practicable.
Parks & Recreation Operational Assessment•Staff Recommendations:–Fee and revenue changes will be evaluated as part of the FY2013‐2014 Budget process.–Items involving changes to the MOU with CCEA will be addressed through regular negotiations.–Smaller opportunities to contract for services, or managed competition will be evaluated separately.
Contracting for ServicesOptions to ConsiderOption 1Contract with a vendor to provide all park maintenance services.Option 2Contract with a vendor to provide landscape and tree maintenance services only.Option 3Do not pursue contracting for any additional park maintenance services.Note: •More than 50% of maintenance activities for parks, 60% of tree maintenance, and 100% of open space acreage is currently performed by outside contractors.•Options 1&2 will trigger the Meet and Confer process with CCEA (Decision/Effect)
Staffing OpportunitiesOption 1 (All Park Maintenance)•BT Recommended Contract Administrators (9)•Current City Vacancies (3)•Future City Vacancies •Other Agency Vacancies•VendorsCurrent Park Maintenance Staffing 35.75 Full‐time/11 Budgeted Part‐time
City Council Decision/Staff DirectionOption 1•Decide to pursue contracting for all park maintenance services.•Initiate the Meet and Confer Process with CCEA on the decision to contract for services.Option 2•Decide to pursue contracting for landscape and tree maintenance services only.•Initiate the Meet and Confer Process with CCEA on the decision to contract for services.Option 3•Do not pursue contracting for any additional park maintenance services.
Questions