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Home My WebLink About2012-07-17; City Council; Minutes (2)MINUTES SPECIAL MEETING: CITY COUNCIL WORKSHOP DATE: July 17,2012 TIME: 11:00 AM PLACE: CITY ADMINISTRATION BUILDING, ROOM 173A, 1635 FARADAY The Mayor called the meeting to order on July 17,2012 at 11:07 a.m. Present: Council Members Hall, Kulchin, Packard, Blackburn and Douglas. REGIONAL REPORTS Council had no regional reports. Item: Presentation of the Parks and Recreation Department Operational Assessment Report. The following documents were distributed for this item and are on file in the Office of the City Clerk. • Parks and Recreation Report and Executive Summary from Baker and Tilly, 7-10-12. • Power Point Presentation by Baker and Tilly, "Parks & Recreation Operational Assessment", 7- 17-12. The item was introduced by Deputy City Manager Cynthia Haas. Baker and Tilly's Christine Smith and Kelly Fuller gave the presentation on Parks & Recreation to the Council. Public Comment: Diane Nygaard spoke about the need for contract management oversite to prevent problems. She questioned the quality of work from contractors vs. the quality work of staff. She also questioned how the City's equipment will be used, or, not used. She also questioned how trail volunteers might feel about changes in personnel. Ms. Nygaard noted that there may be unintended consequences to forthcoming decisions. Patrice Smerdu noted that contracting could be used in some instances but is not a plus for day to day operations. She stated that with outsourcing it may be difficult to maintain customer satisfaction, and, in the long run, the City might lose talented workers Ray Pearson spoke in favor of retaining unique commissions that serve Parks & Recreation. Mary Sherer spoke of the quality of the parks and the positive public relations offered by staff. She was not in favor of fee hikes. Ms. Sherer noted that this is an opportunity to save jobs. Special Meeting Workshop, July 17, 2012 Pam Drew asked several questions regarding the comparable cities listed in the report. She also questioned the timeline for decisions regarding the report. Ms. Kelly and Ms. Smith addressed the following questions: • Possible quality of service changes with contracted employees. • Data point conflicts (regarding City to City comparisons). City Manager Lisa Hildabrand described the processes that the City might use if it moved to outsourcing of work. Recess: The Mayor and Council took a brief recess from 12:18 PM to 12:31 PM. Council Member Douglas asked for clarification regarding possible length of contracts, training for contract management, equipment options and the commonalities ofthe cities used in the study. She also asked about salaries that were lower or comparable with the study's norm. Council Member Blackburn asked about the use of "comp time" as down time and the premiums other cities put on various work values. Council Member Packard asked about the norm for length of contracts. He also asked about the percentage ratio of public and private cost and that ration driving a decision "tipping point". Mayor Pro Tem Kulchin asked about the timing ofthe decision. Mayor Hall asked Parks and Recreation Director Chris Hazeltine questions about the use ofthe Hansen (work order) System and the Parks and Recreation Management control structure/size. Mayor Hall adjourned the meeting to a Closed Session at 1:08 p.m. ifrraine )yi. Wood, CMC City Clerk Page 2 7/17/2012 City of Carlsbad Parks & Recreation Operational Assessment Christine Smith, Principal Shelley Fulla, Senior Manager July 17, 2012 BAKER TILLY Candor. Insight. Results. Project Background and Objectives BAKER TILLY Candor, insght. Re»j!t5 > Operational assessment: • Key component of the City of Carlsbad's Best Value Services Program • Aligns with strategic focus of being a sustainable organization " • Focused on providing the best quality at the lowest cost " •' > Analyzed Parks & Recreation Department operations to: • Evaluate department performance • Quantify current resource allocations and expenditures • Ensure that the city's resources and strategic priorities are aligned • Determine the feasibility of alternative service delivery approaches 7/17/2012 Project Approach and Methodology Opportunities Continuum Productivity Enhancements • Functional Analysis • Lean Government • Process Re- engineering • Performance Management Outsource, Consolidated & Shared Services • Cost Sharing Arrangements • Vendor Evaluation & Management • Outsourcing and/or Managed Competition BAKER TILLY CMdor. is«H. RHutti. Strategic Res Alignment • Productivity Analysis • Governance Enhanceme • Costs of Bargaining Agreement Contract Analysis •isk Assess Project Approach and Methodology BAKER TILLY > Conducted staff interviews > Reviewed documentation including service statistics, financial information, polices and procedures, etc. > Developed work breakdown structure to define levels of service > Comparison against industry benchmarks > Comparison to similar regional municipalities > Comparison to private sector salary data and informal cost estimates by private vendors 7/17/2012 Project Approach and Methodology BAKER TILLY CMdor. fti^t AKuttt. Parks & Recreation Department Lines of Business Parks Maintenance > Custodial Services > Hardscape Specialty Maintenance > Landscape Maintenance > Trails/Open Space/Preserve Maintenance > Tree Maintenance Recreation Services > Aquatic Services > Historic Park Services > Recreation Services > Rental Services > Senior Services BAKER TILLY CswJor. lfTS«W. Rcsiufts 48 Opportunities .3 - 4.7 million in cost savings, revenue enhancements, and resource reallocations Opportunity Area Opportunities Contract Management and Outsourcing 7 Memorandum of Understanding 3 Department Staffing 3 Parks Maintenance General 3 Custodial Services 1 Hardscape/ Specialty 4 Landscape 4 Opportunity Area Opportunities Trails/ Open Space/ Preserve 2 Tree 1 Aquatic Services 7 Historic Park Services 3 Recreation Sen/ices 4 Rental Services 3 Senior Services 3 7/17/2012 Key Opportunities BAKER TILLY CiodCf. rnstgM. Resuiti. >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 BAKER TILLY Cdtfdot. L'Ts^M. Rew/its Opportunity Description Consideration of outsourcing the entire parks maintenance function Opportunity Amount $1,700,000-$3,866,000 Report Reference Pg. 66 Potential Savings Due to Differences in Labor Costs Range of Estimated Savings Cost Comparison Based on Vendor Estimate Hardscape $ 215,985 Cost Comparison Landscape $ 925,732 Current Internal Cost $7,879,000 Trails $ 111,337 Fully Outsourced Trees $ 466,797 Option $4,012,643 Potential Potential Savings $3,866,357 Savings $1,719,851 7/17/2012 BAKER TILLY CandOf kiatM. Results. Opportunity Description Consideration of outsourcing of individual lines of business within parks maintenance Opportunity Amount Landscaping: $925,700 Trees: $700,000 Report Reference Pg. 100 and pg. 122 Landscape Outsourcing rate (% of acreage) Carlsbad Comparable Average 54% 85% Total Compensation Difference Estimate 55% Carlsbad Private Sector $75,796 $43,307 Trees Cost of Sen/ice Difference Carlsbad Cost Outsourced Option $1,670,00 $980,000 Total Compensation Difference Estimate 55% Carisbad Private Sector $87,909 $49,816 Opportunity BAKER TILLY Cmtdof. tnsiK^- Results Opportunity Description Consideration of managed competition for hardscape and trails Opportunity Amount Hardscape: $216,000 Trails: $111,300 Report Reference Pg. 86 and pg. 112 Hardscape Total Compensation Difference Estimate 45% Carlsbad Private Sector $93,843 $59,152 Trails Total Compensation Difference Estimate 55% Carlsbad Private Sector $75,796 $43,307 Recommended for managed competition because: > Smaller difference in cost > Opportunities for efficiencies 7/17/2012 Opportunity BAKER TILLY Opportunity Description Consider a wider span of control for Parks & Recreation Estimated Savings TBD Report Reference Pg.41 Span of Control Comparison Percent Mgmt. Span of Control City of Carlsbad- Actuals (2009-11) Carlsbad Parks 11.9% 7.4 Carlsbad Recreation 11.0% 8.1 Average of Comparabies (11 data points) 14.6% 6.9 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 position Restructure Recreation Area Managers . BAKER TILLY Opportunity Description Alignment of labor costs with productive hours Opportunity Amount TBD Report Reference Pg.50 Average Annual Leave Usage by Full Time Staff Leave Type Days Used Vacation 12.50 Sick 8.16 Holiday 13.06 Bereavement 1.36 Workers Compensation 3.40 Other Leave (Includes Compensatory and Executive Leave) 4.64 Total 43.12 7/17/2012 Opportunity BAKER TILLY dndor. iftiii^. (^Wt&. Opportunity Description Alignment of fees charged witti market rate and demand Opportunity Amount Aquatics: $34,500 Recreation Fee Revenue: $25,000 , Rental Rates: $125,000 Report Reference Aquatics: Pg.135 Recreation Fee Revenue: Pg. 154 Rental Rates: Pg. 162 Rental Rate Difference and Possible Increases Current Annual Revenue Five Year Future Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Total Years A: 25% Increase in First Year $500,000 $625,000 $625,000 $625,000 $625,000 $625,000 $3,125,000 $625,000 B: 5% Increase over 5 Years $500,000 $525,000 $551,250 $578,813 $607,753 $638,141 $2,900,956 $638,141 Aquatics Example Fee Increase Current Rate Proposed Rate Revenue Increase $22,188 S 400 Opportunity BAKER TILLY Cantiot. ifw^M- Flestjtts. Opportunity Description Enhanced used of technology Opportunity Amount Online Registrations: $46,800-140,400 annually Consistent use of Hansen: TBD Report Reference Pg. 153 and Pg. 68 Scenario 1: 80% Online Enrollment Item Amount Note Addition of 3 l<iosl<s at $1,000 each $ (3,000) one time cost One-time marketing campaign $ (25,000) one time cost Savings from reduced staffing $ 140,425 annual savings Net Savings $ 112,425 Scenario 2: 50% Online Enrollment Item Amount Note Addition of 3 kiosl<s at $1,000 each $ (3,000) one time cost Savings from reduced staffing $ 46,808 annual savings Net Savings $ 43,808 7/17/2012 Additional Opportunities BAKER TILLY •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 staff BAKER TILLY C»«»dW. toSfiht. Reiufts Questions? 8