city of san luis obispo organizational assessment · the city of san luis obispo mission statement...

CITY OF SAN LUIS OBISPO

ORGANIZATIONAL ASSESSMENT FINANCE AND INFORMATION TECHNOLOGY DEPARTMENT

MUNICIPAL RESOURCE GROUP, LLC 675 HARTZ AVENUE, SUITE 300

DANVILLE, CA 94526 (530) 878-9100

APRIL 2013

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CITY OF SAN LUIS OBISPO

ORGANIZATIONAL ASSESSMENT

FINANCE AND INFORMATION TECHNOLOGY DEPARTMENT APRIL 2013

TABLE OF CONTENTS

PAGE

I. INTRODUCTION AND BACKGROUND 1 II. CURRENT ORGANIZATIONAL STRUCTURE 6 III. FINANCE DIVISION ASSESSMENT AND RECOMMENDATIONS 9 IV. IT DIVISION ASSESSMENT AND RECOMMENDATIONS 30 V. HUMAN RESOURCES DEPARTMENT ASSESSMENT AND RECOMMNEDATIONS 36 VI. ASSESSMENT SUMMARY 43

Appendix A List of Contributing Staff A-1

CITYOFSANLUISOBISPO

ORGANIZATIONALASSESSMENT

FINANCEANDINFORMATIONTECHNOLOGYDEPARTMENT

APRIL2013

I. INTRODUCTIONANDBACKGROUND

___________________________________________________________________________________________________

BackgroundandScopeoftheAnalysisandReport

The City of San Luis Obispo (“City”) Finance & Information Technology Department

(“F&IT Department”) provides fiscal policy guidance, financial and accounting services,

technologyservicesandothersupportservicestoCitydepartments.TheF&ITDepartment

consistsoftwodivisions:FinanceDivisionandInformationTechnologyDivision.TheF&IT

Department also provides services to the general public, such as budget and financial

informationandpublicinformationthoughtheCity’sinternetwebsite.

MunicipalResourceGroupLLC(“MRG”)wasretainedbytheCitytoconductananalysis

andprepareanAssessmentoftheorganizationalstructure,staffinglevels,skillsetsandjob

assignments in the F&ITDepartment. While the focus of the Assessment is on the F&IT

Department,theCityalsorequestedthatservicesoftheHumanResourcesDepartmentbe

considered, to enhance synergies between the Human Resources Department and F&IT

Department.Inaddition,theCityrequestedconsiderationofthebudgetfunction,whichhas

beenassignedtotheCityManager’sofficeonaninterimbasis.

OrganizationoftheReport

This Chapter I provides an overview of the process used to research and

understand City requirements for internal services, evaluate the current F&IT

Department andHuman Resources Department organizational structures, staffing

levels, skill sets and job assignments, and offer recommendations to enhance

servicesprovidedbythesedepartments.

Chapter II describes the current services and organizational structure of the

F&ITDepartmentandtheHumanResourcesDepartment.

Finance & Information Technology Department Assessment City of San Luis Obispo April 2013 Municipal Resource Group

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Chapter IIIpresents theAssessment report findings and recommendations for

theFinanceDivisionoftheF&ITDepartment.

Chapter IV presents the findings and recommendations for the Information

TechnologyDivisionoftheF&ITDepartment.

ChapterVpresentsthefindingsandrecommendationsfortheHumanResources

Department.

ChapterVIisasummary.

Appendix A is a list of San Luis Obispo City staff that participated in the

interviewsandmeetingsthatinformedthisAssessment.

Assessment Process

The Assessment process was based on our understanding of the City’s goals for this

project, as reflected in thecontractual scopeofwork, supplementedbyourexperience in

performingsimilarassessmentsforpublicagencies.Theprocessincludedthefollowing:

MRG met with key City management staff to confirm the project objectives and

discusstheprojecttasks,timelinesanddeliverables.

Jointly with the City Manager, MRG met with the F&IT Department, Human

ResourcesDepartmentandCitybudgetstafftodescribethegoalsoftheprojectand

discusspotentialtopicsthatwouldbeaddressedintheAssessment.

Because of the importanceof the services that theCity organization expects from

the F&IT Department and the Human Resources Department, MRGmet with key

internalcustomers todevelopanunderstandingof theneedsandrequirementsof

Citydepartments.Thepurposeofthisphasewastosolicitinputontheeffectiveness

ofcurrentaccounting,financeandhumanresourcesproceduresandpractices,and

todeterminetheextenttowhichcurrentpracticessatisfyCitydepartments'needs.

MeetingswereconductedwiththirteenrepresentativesoftheAdministration,City

Attorney,Police,Fire,PublicWorks,Utilities,CommunityDevelopmentandParks&

Recreationdepartments.

MRGmetwith nine individual Finance staff members to review job assignments,

workloads, resources, productivity, skill sets, reporting relationships and other


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factors affecting the F&IT Department’s ability to perform expected and required

productsandservices.

MRGmetwiththe InformationTechnologyManager individually,andwithITstaff

collectivelytoreviewdepartmentalstructure,issues,concernsandinsights.

MRG met with the Human Resources Director individually, and with Human

Resourcesstaffcollectivelytoreviewdepartmentalstructure, issues,concernsand

insights.

MRG reviewed pertinent City documents, including the City Financial Plan and

Budget, a previous reorganizational proposal, F&IT process survey results, draft

Auditor recommendations tomanagement, InformationTechnologyStrategicPlan,

Draft Utilities Department Organizational Structure Review Report (BHI

ManagementConsulting),CityFinanceManual,CityRevenueManagementManual,

DraftHumanResourcesRecruitmentGuide,Cityservicelevelagreementsandother

Citydocuments.

MRGmetwith the Interim F&ITDirector and the FinanceOperationsManager to

seekinputandtoreviewtheinformationandinputgainedfromthemeetingswith

Citystaff.

MRGmet with the City Manager to review the status and high level topics to be

addressedintheAssessment.

Intotal,MRGmetwithandreceivedvaluableinputandinsightsfromforty‐sixCitystaff.

ThenamesofcontributingstaffmembersarelistedinAppendixA.

MRGwasrequestedtoaddress,andataminimum,toprovidethefollowing:

Assess the current F&IT organizational structurewith a focus on the services the

CityorganizationexpectstheDepartmenttodeliver.

Identifytheskillsnecessarytodelivertheseservices.

Proposestaffinglevelsnecessarytodelivertheseservices.

Consider potential organizational restructuring, including but not limited to City

budget, utility billing, centralized purchasing, centralized contract management,

humanresources,riskmanagementandotherservices.


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Consider organizational configurations beyond the F&IT Department, such as an

AdministrativeServicesDepartment.

Considerreportingrelationships,spanofcontrol,authorityandstaffinglevels.

Consider the appropriateness of classifications necessary to ensure succession

planningandstaffdevelopment.

Specifically address the reporting relationship of the budget function – should it

remain in the City Manager’s office as temporarily assigned, or be an F&IT

Departmentfunction.

Strengthenthefinance,informationtechnologyandhumanresourcesfunctionsand

capabilities.

MissionStatement,StyleandOrganizationalValues

The City of San Luis ObispoMission Statement emphasizes that the San Luis Obispo

Styleis“QualitywithVision”,definedas:

PeopleServingPeople

QualityinallEndeavors–PrideinResults

IntotheFuturewithaDesign

CityOrganizationalValuesinclude:

SharedVision,MissionandGoals

Service

LeadershipandSupport

Communication

TeamPlayers

Honesty,RespectandTrust

InitiativeandAccountability

InnovationandFlexibility

EmployeeDevelopmentandRecognition

StewardshipandEthics


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Thisassessmenttakesintoaccountandattemptstofurtherfacilitateachievementofthe

City of San Luis Obispo Mission Statement, Style and Organizational Values, Policies,

ObjectivesandMajorGoals.

ItshouldbenotedthatanAssessmentofthisnaturetendstofocusonareasofpotential

improvementanddoesnot identifyallofthefunctionsthatareworkingwellandneedno

improvement. Indeed, in the case of the F&IT Department and the Human Resources

Department, there are many well‐functioning procedures and well‐designed customer

servicesandproducts.However,itisnotthepurposeoftheAssessmenttodocumentsuch

successfulpractices.

ThisOrganizationalAssessmentReporthasbeenpreparedbasedon theresultsof

theprocessdescribedabove,aswellasourexperience inmanagingsimilarorganizations

andperformingassessmentsforotherjurisdictions.


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II. CURRENTORGANIZATIONALSTRUCTURE

_____________________________________________________________________________________________________

ExistingOrganizationalStructure

The Finance & Information Technology Department provides services through the

followingprograms:

Administration–plans,organizes,leadsandmonitorstheoperationsoftheFinanceand

InformationTechnologyDepartment.

Accounting ‐ administers accounting functions including general ledger, accounts

payable and payroll; provides financial planning, issues financial reports, ensures

compliance with reporting requirements, coordinates the annual financial audit and

CAFRandspecialaudits;andprovidesCitywidesupportservicesformail,purchasesof

certain supplies, contract execution and insurance requirements. (Note: financial

planning, including the two‐year financial plan, capital improvement plan and annual

budget is temporarily assigned to an ad hoc group reporting to the City Manager’s

office).

RevenueManagement‐administersutilitymeterreadingsystems,customerserviceand

billingservices;administersthebusiness licenseapplicationsandrenewals;maintains

accounts receivable systems; provides cashiering services; prepares estimates and

monitors revenue trends; provides investment, banking and debt service

administration.

SupportServicesProgram–administersandaccountsforindirectcitywidecosts,suchas

copiermaintenance,postageandotherservices.

InformationTechnologyNetworkServices ‐responsiblefordevelopingandmaintaining

long‐range plans, policies and standards for acquiring and maintaining IT and

telecommunication resources; provides support, maintenance and training to City

departments.


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InformationTechnologyGeographic InformationServices – operates andmaintains the

City’sgeographicinformationsystem.

ThecurrentF&ITorganizationalchartispresentedbelow.

The Principal Administrative Analyst and Executive Assistant positions in the City

Manager’s office that are currently developing the Financial Plan and Budget are not

includedintheF&ITorganizationalchart.

TheHumanResourcesDepartment currently provides services through the following

programs:

Administration–providessupporttoallCitydepartmentsinallaspectsofattractingand

retaining qualified employees, including recruitment, selection, classification,

compensation, performance management, training and development; labor relations;

statutoryandregulatorycompliance.

Director of Finance & IT

Finance Operations Manager

Accounting Supervisor

Accounting Assistant (3)

Revenue Supervisor


Information Technology Manager

Network Services Supervisor

IT Assistant (.75)Network

Administrator (3)

GIS Supervisor

GIS Specialist (1.5)

Database Administrator

Administrative Analyst


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RiskandBenefitsManagement–providesriskmanagement,workerscompensationand

liability administration; administers health and safety programs; oversees employee

benefitandwellnessprograms.

Human Relations – provides staff support to the Human Relations Commission, an

advisorybodytoCouncil,onissuesrelatedtohumanandsocialservices.

ThecurrentHumanResourcesDepartmentorganizational chart, staffing level and

reportingrelationshipispresentedbelow.

DirectorofHuman

Resources

HumanResourcesAnalyst

HumanResourcesSpecialist

HumanResourcesManager

AdministrativeAssistantI


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III. FINANCEANDINFORMATIONTECHNOLOGYDEPARTMENTREVIEW‐

FINANCEDIVISIONASSESSMENTANDRECOMMENDATIONS

____________________________________________________________________________________________________

InconductingthisAssessment,MRGmetwithrepresentativesofCitydepartments.

Thepurposeof themeetingswas to gain insights from “internal users” as towhichF&IT

Departmentprocessesandservicesworkwell,andwhatcanbedonetoenhanceprocesses

andservices.

MRGalsometwithF&ITDepartmentstaffindividuallyandingroupmeetings.The

purposeofthemeetingswithF&ITDepartmentstaffwassimilartothemeetingswithCity

departments, but it was also to gain an understanding of how the F&IT Department

operationsarestructuredandhowservicesareprovidedbydepartmentalstaff.

TheinternalcustomerandF&ITDepartmentstaffobservationsandinputregarding

the Finance Division are discussed in this Chapter, as well as MRG input based on our

experiencewithsimilaragencies.Recommendationsareprovidedtoaddressorganizational

andserviceissuesthathavebeenraised.

It is importanttonotethatinterviewsandmeetingswithCitystaffgeneratedboth

factsandperceptions.Whilesomeperceptionsmaynotbegroundedsolelyinfact,theyare

nonetheless importanttoaddressintheAssessmentandbytheF&ITDepartmentandthe

City.

It may be appropriate and necessary for the City to consider phasing the

implementationoftheserecommendations,astimepermitsandasfundingisavailable.

This Chapter addresses financial and accounting services provided by the F&IT

Department. Subsequent chapters address Information Technology Division and Human

ResourcesDepartmentservices.

ASSESSMENTANDRECOMMENDATIONS

1. Leadership,ManagementandSupervision

CitystaffacknowledgedthattheturnoverintheF&ITDepartmentDirectorpositionhas

caused a leadership void. Absent consistent leadership, there has been a decline in


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communication, morale, disciplined work product and quality of services to internal

customers. The loss of the long‐tenured Finance Manager compounded this problem,

particularly in diminished accounting experience and knowledge. Moreover, the

Supervisorspositionsarecurrently filledonan interimbasispendingtheoutcomeof this

study,causingfurtheruncertaintyandlackofconsistentday‐to‐dayguidanceofstaff.

The key to success in implementing the recommendations in this Assessment, and in

enhancing the services of the Finance Division is to stabilize the F&IT Department with

competent,experienced,permanentmanagementstaff.

AdministrativeServicesDepartment

One of the questions posed as part of this Assessment is whether an Administrative

ServicesDepartment should be created,merging theHumanResources Departmentwith

Finance&InformationTechnologyDepartment(aswellasotherpotentialfunctions).One

factor driving this question was whether an Administrative Services Department would

attractqualifiedDirectorcandidates. AsaresultofthisAssessment,andthenecessityfor

the next F&ITDirector to be highly competent in financialmatters, aswell as additional

reasons described in Chapter V of this Assessment regarding confidentiality of Human

Resources information, MRG does not recommend the creation of an Administrative

ServicesDepartment. RecruitingforanAdministrativeServicesDepartmentDirectormay

attract candidates that are less focused on the important finance matters that must be

addressed.

RecommendedAction:

1.1. Appoint a permanent Finance and Information Department Director and other

permanentprofessional,managementandsupervisorypositionsasrecommended

inthisAssessment.

2. FinanceDivisionMissionandRoleintheCityOrganization

TheF&ITDepartmentisakeysupportdepartmentforCityservices.Theorganizational

structure,operationsandservicesmustbeconsistentwithandsupporttheCity’sMission,

Organizational Values, Policies and Objectives as described in Chapter I. Overall,

sustainablefiscalhealthisamajorpolicygoalfortheF&ITDepartment.


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ExpandFinancialServices

CitystaffsuggestedthattheFinanceDivisionshoulddevelopskillsetsandexpertiseto

providefinancialsupportinotherareas,suchasassistinginanalyzingandsupportingthe

negotiation of financial terms of Development Agreements, economic development

strategies,grantapplications,andinfrastructurefinancingstrategies.ThisAssessmentwill

addresstheseadditionalfinancerolesintheproposedorganizationalstructure.

RegulatoryRole

ThereisaperceptionthatFinancestaffviewtheDivision’sroleasregulatory.Citystaff

commentedthatFinancestaffoccasionallycommunicatewhatCitydepartmentscannotdo,

ratherthantohelpfindmutuallyacceptablewaystoaccomplishagoal.

RecommendedActions:

2.1. RecommittotheCity’sOrganizationalValuesasapathwaytosuccess.

2.2. Conduct outreach sessionswithCitydepartments todetermine specific services

thattheF&ITDepartmentcanprovideand/orenhancetofulfilltheCity’sMission,

OrganizationalValues,PoliciesandObjectives.

2.3. Define F&IT Department’s role and mission and develop a F&IT Department

StrategicActionPlantoimplementtheresultsoftheoutreachtoCitydepartments.

3. FinanceandAccountingProcedures

FinanceandRevenueManuals

The Finance Division has prepared a comprehensive City Finance Manual and City

RevenueManagementManual,whichisacommendablepractice.Financestaffoftenrefers

Citydepartmentstothesedocumentswhenquestionsarise.Citystaffcommentedthatthe

documentsdonotalwaysanswertheirquestions.

For some topics, the City Finance Manual is a policy document as opposed to a

procedures document. For example, payroll and accounts payable procedures are

described as “future areas to be included” in the manual. To be most useful, these

procedures should be drafted and implemented. Itwas also suggested that themanuals

havelinkstootherCityformsanddocuments.


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FinanceandAccountingProceduralChanges

City staff noted that certain Finance procedures and processes impact other

departments’workloads,andtheywouldliketohavetheopportunitytodiscussmethodsby

which both the Finance Division and other departments’ workloads can be reduced.

Examples given include hard copy capital project payment requests and allocating

personnelcostsbyjournalentry.

CitystaffnotedthattherehavebeeninstancesinwhichtheFinanceDivisionhasmade

changes to processes that impact the workload of other departments without first

consulting the other departments. The transfer of inputting vendor accounts payable

batchesandrecentchangesincreditcardproceduresweregivenasexamples.

TimelyProcessing

City staff noted that there are occasions upon which budget amendments, accounts

payablechecksorrequestsforinformationarenotprocessedinatimelymanner.Thiscan

be addressed by establishing performance standards as part of an F&IT Department

StrategicActionPlan.

IdentificationofContactPersons

Inyearspast, Citydepartmentsknewwhich staffmembers in theFinanceDivision to

contact for questions and answers. Staff turnover in the past few years has led to less

certaintyonwhomtocontact. AstheFinanceDivisionstaffingstabilizes,thiswillbecome

more clear, butmeasures should be taken to specifically identify contact persons for key

financeandaccountingmatters.

ExpenditureAuthorizations

Itwasnotedthatwhilerecentlyrevised,the$7,500departmentalapprovallevelmaybe

low, as may be the City Manager’s approval level of $25,000, and that these levels of

expenditureauthoritycancausedelaysinpurchasesandcontracts.

RecommendedActions:

3.1. As a follow up to development of a F&IT Department Strategic Action Plan

(Recommendation 2.3), check back frequently with internal customers to


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determinehowtheF&ITservicescanbecontinuouslyimproved,andmakecourse

correctionsasnecessary.

3.2. Discuss planned changes in procedures and processes with City departments

beforeimplementingsuchchanges,andtakeintoaccountthefeedbackfromCity

departmentspriortoimplementingnewproceduresorprocesses.

3.3. Convene a Citywide task force to review the existing City FinanceManual, and

selectsectionsoftheRevenueManual.Implementagreed‐uponchangesandadd

anyrequiredadditionaltopicstotheexistingmanuals.

3.4. Develop performance standards for timely processing of financial tasks, and

measureprogresstowardmeetingtheperformancestandards.

3.5. Designatecontactpersonsforkeyfinanceandaccountingmattersanddistribute

thisinformationtoCitydepartments.

3.6. Periodically survey other cities’ expenditure authorities and modify the

$7,500/$25,000expenditureauthoritywhenappropriate.

4. FinanceDivisionOperations

CitywideServices

TheFinanceDepartmentadministerscertaincitywideservices.Onesuchserviceisthat

Financestaffcurrentlyprocessescontractsforsignatures,obtainsinsurancecertificatesand

bonding certificates and checks insurance certificates for compliance with contractual

requirements. The assignment of these responsibilities to an Accounting Assistant is

neitheratypicalfinancenoraccountingfunction,norwithinanAccountingAssistant’sarea

of expertise. A more common procedure is for the initiating City department to secure

requiredsignaturesandforariskmanagertocheckinsuranceandbondingcertificatesfor

contractual compliance. Once all signatures are secured and other contractual

requirementsaremet,executedversionsaredistributedbytheinitiatingCitydepartmentto

theFinanceDivision,andtotheCityClerktomaintaintheofficialcontractfile.

AsecondcitywideserviceprovidedbyFinancestaffispostingmail.Themailmachine

hasfunctionalityforCitydepartmentstologin. UseofanAccountingAssistanttopostall

City mail takes away from time that could otherwise be dedicated to accounting and

financialfunctions.


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TheCitycurrentlyhasdecentralizedpurchasing,exceptforcopymachinemaintenance

andsupplies.Thecurrentsystemappearstoworksatisfactorily,andwefoundnoreasonto

centralizepurchasingfunctions.

DistributionofAccountingAssistants’Workloads

Finance staff indicates that theworkloadsplacedondifferentdesksarenotbalanced,

and that the Finance Division should review workload assignments among Accounting

Assistantstofairlyallocateassignments.

Theissuanceofbusinesslicenserenewalsatfiscalyear‐endcoincideswiththehighest

levelofutilityaccountchangesduetocollegestudents’rentalchanges,aswellasthetypical

budgetandyear‐endaccountingactivities.

Desk manuals exist for some functions but are not complete for all functions and

processes. Whilecross‐trainingassists inbeingable tocoverabsences,deskmanualsare

essentialforsmoothtransitionsinassignments.

AdministrativeSupport

TheF&ITDepartmentdoesnothaveadministrativestaff.Citystaffcommentedthatthis

requires the accounting staff, supervisors,manager and theDirector to spend timedoing

administrative work instead of performing professional‐level accounting and financial

work. An Administrative Assistant is proposed to be added to the organization. This

positionwouldbesharedbythe InformationTechnologyDivision, torelieve ITstaff from

administrativetasksaswell.

InternalCommunications

Finance staff point out that in the past, they were kept informed of citywide issues

throughregulardepartmentalmeetings.Departmentalgoalsandoperationswerediscussed

atthemeetings.Inrecentyears,meetingsandcommunicationhavedeclined,andthestaff

feelslessawareofimportantcitywidematters.

Interns

TheFinanceDivisionhasnottakenadvantageofinternsfromlocalcolleges.Internscan

be beneficial in relieving seasonal increases in workload, as well as to assist in ongoing


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tasks.Inaddition,internshipprogramscanleadtofuturejobcandidateswhohavehadCity

financeoraccountingexposureandexperience.

RecommendedActions:

4.1. Discuss with City departments and consider implementing procedures for City

departments that initiatecontracts tocirculate thosecontracts for signature, for

riskmanagementtocheckinsuranceandbondingrequirements,andfortheCity

Clerktomaintainanoriginalcontractfile.

4.2. Discuss with City departments and consider implementing procedures for City

departmentstoprocesstheirowndepartment’soutgoingmail.

4.3. Following implementationofotherrecommendations in thisAssessment,review

the assignments to Accounting Assistants, and redistribute assignments as

appropriatetobalanceworkload.

4.4. Consider changing thebusiness license renewal date to adate other than fiscal

yearend,andperhapstoquarterlyrenewals,withone‐fourthoftherenewalsdue

eachquarter.

4.5. Complete desk manuals covering all Accounting Assistant desks, and as

appropriate,forAccountanttasks.

4.6. Add an Administrative Assistant position to the F&IT Department, with .5 FTE

assignedtotheFinanceDivision.

4.7. Re‐establish regular F&IT staffmeetings to convey citywide information and to

facilitate discussion regarding F&IT Department matters. Consider inviting

representativesfromotherCityDepartmentsonarotatingbasistoshareactivities

andeventsoccurringintheirdepartments.

4.8. InitiateaninternprogramintheFinanceDivision.

5. AccountingAssistantsRotation

The Finance Division has used a rotation system among the ‘desks’, wherein the

AccountingAssistantshaverotatedatsixmonthintervals,whichhasrecentlybeenchanged

to less frequent intervals. Thepurposeof the rotation systemhasbeen to cross‐train, to

provide variety among job assignments and to offer an opportunity to Accounting

Assistantstolearnallofthefrontlinedepartmentaloperations. Staffcommentedthatthe


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rotationsystemhassomenegativeresults,includinglackoftimetotrainreplacements,lack

ofownershipovertheresponsibilitiesofadesk, lackof timeinthepositionto implement

long‐termimprovementstoprocesses,potentialfortransferandperpetuationofincorrect

information,andlackof‘fit’forsomeindividualswiththerequirementsofsomedesks(for

example, some individuals are better suited to customer contact,while others are better

suitedtodata).Rotationcanpreventstafffrombecomingexpertsondesks,andthereisless

incentivetoimproveprocessesifitisonlyatemporaryassignment.

RecommendedActions:

5.1. EliminatetheformalrotationsystemforAccountingAssistants.

5.2. Determine the most qualified person for each desk and assign Accounting

Assistantstodesksbasedonthebestfitfortheposition.

5.3. Continuetocross‐trainAccountingAssistantsfortemporaryassignmentstoother

desks.

5.4. Asacomponentofeliminatingtheformalrotationsystem,reviewtheAccounting

Assistants’jobdescriptionandreviseasnecessary.

6. WorkSchedules

TheF&ITDepartmentstaffworkona9/80schedule,withoneworkdayoffevery

twoweeks.Theconsequenceofthisscheduleisthatthereareonlyfourdayseachweek

that all staffmembers are present (assuming no absences for vacation, sick leave or

other leave). Accounting Assistants and/or Supervisors must cover the desks of

employees on the alternate days off. It does not appear that the 9/80 schedule

enhancestheoperationoreffectivenessoftheDepartment.

RecommendedAction:

6.1. Eliminatethe9/80workschedule.

7. FinancialSystemsandApplications

PentamationSystem

The Information Technology Strategic Plan provides an evaluation and

recommendationsforenhancingtheCity’sexistingapplicationsandaroadmaptoimprove


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the effectiveness of IT services. A noteworthy comment in the Information Technology

StrategicPlandescribesthePentamationsystemas“approachingendoflife,asthecurrent

vender(Sungard)nolongeractivelymarketsthisversion”and“(I)tisanticipatedthatinthe

next threeto fiveyears, theCitymaybe forcedtoconsiderprocuringanewsolution that

wouldprovidelongtermsupportandbringbestpracticesintermsof finance,payrolland

humanresources.”

Staff isworkingonanupgrade toPentamation that is scheduled forMay2013. Once

that is completed, staff will beginmaking fundamental changes to the software thatwill

allow for better reporting, a simplified budget updating process and the creation of the

annual financial statements directly from the software. These changes, coupled with

comprehensive training for users inside and outside the Finance & IT Department, will

providetheCitywiththeopportunitytocontinueusingthesystemtogreateradvantageand

havegreaterfunctionalityforamuchlowercost,comparedtoreplacingthesystem.System

replacementcostsnotonlyincludethecostofthehardwareandsoftwarebutalsoinclude

thecostofadditionalstafftimeforthosepositionswhichrequireatemporaryreplacement

sothatdailyfunctionsarenotleftuntendedfortheperiodoftimethattheexistingstaffis

workingonthesoftwareconversion.AfurtherbenefitisthattheCityhasanopportunityto

reconfigure itsbusinessprocessesusing theexistingsoftwareandcan then transition the

revisedpracticestoanewsoftwareenvironment.

MultipleDisconnectedFinancialApplications

The City has multiple software applications that process and record financial

information. ThePentamationsystemprovidesbasicgeneral ledgeraccountingfunctions.

Business licenses are issued and receipts are recorded using an HdL application; asset

managementusesaHansenapplication;timekeepingisprovidedbyIntelliTime;recreation

receipts are recorded in RecWare; utility billings are processed through a Springbrook

application; utility work orders are processed using a Cityworks application. Journal

entriesforcashreceiptsthatareinitiallyrecordedinothersystemsaremanuallyrecorded

inthePentamationgeneralledger.Thesediverseapplicationsrequiremoretraining,more

keystrokesandmoremaintenance,andgeneratemoreopportunitiesforerrorsthanafully

integratedenterpriseresourcesystem.


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HumanResourcesInformationSystem

ItisnotedthattheCitydoesnotfullyutilizetheexistingPentamationHumanResources

InformationSystem(HRIS). AnHRISsystemenhancesfinancialproceduresbyintegrating

compensation and benefit data from a Human Resources Department with a Finance

Department payroll function. While the Finance Division uses the existing Pentamation

HRISmoduleforpayrollpurposes,theHRISsystemisnotutilizedbytheHumanResources

Department.UseoftheHRISsystembyHumanResourcesDepartmentcanbetterintegrate

salaryandbenefitinformationwithpayrollfunctions. Therearealsomanydatabasesthat

can bemaintained in an HRIS system that enhance the efficiency of a Human Resources

Department,asdiscussedlaterinthisAssessment.

OtherPentamationModulesandApplications

TheCitydoesnotmake fulluseofotherexistingPentamationmodules. Forexample,

theCitybudgetisnotpreparedusingthebudgetmodule.AbudgetmoduleenablesaCityto

buildthepreliminarybudgetinthePentamationfinanceandaccountingsystem,revisethe

preliminarybudget to reflect theadoptedbudget, andupload thebudget into thegeneral

ledger.Currently,thebudgetisbuiltinExcelandmanuallyreenteredintothePentamation

systemwhen adopted. TheCity also does not use an integratedutility billingmodule or

business licensemodule,which allow general ledger information to be directly imported

from integrated modules. Instead, manual journal entries are used to transfer revenue

informationfromtheutilitybillingandbusiness licenseapplicationsintothePentamation

generalledger.FixedassetsarealsonotmaintainedinthePentamationsystem.Whenthe

Pentamation system is upgraded, consideration should be given to using asmany of the

existing integratedmodules that are practical and that serve theCity’s purposes, such as

thosedescribedabove.

City staff commented that theywould like to havemore training on the Pentamation

systemtobeabletofullyutilizethedataandcapabilitiesthatthecurrentsystemoffers.

Much data analysis occurs as a result of downloading from Pentamation to

spreadsheets,orbycreatingnewspreadsheets,insteadofusingthesystem’sreportwriting

function (Cognos). Finance staff andCitydepartments’ staff indicatedan interest inmore

trainingonthereport‐writinganddataanalysisfunction.


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RecommendedActions:

7.1. Prior to implementing any new applications that collect and process financial

information,theCityshouldevaluatetheoptionofanenterpriseresourcesystem

that integrates as many applications and modules as possible. When the

Pentamationsystemisupgraded,considerationshouldbegiventousingasmany

of the existing integrated modules that are practical and that serve the City’s

purposes.IftheCitydeterminesthatareplacementforthePentamationsystemis

appropriate,considersystemsthathaveapplicationsandmodulesthatincludeall

existing standalone systems (such as business licensing, utility billing, cash

receipts,fixedassets,etc.).

7.2. Implement greater use of the existing Pentamation HRIS application, with

assurancesthatitintegrateswiththefinancialsystem.

7.3. Provide additional training sessions on accessing information from the

Pentamationsystem,andforthereportwritingfunction.

8. UtilityBilling

ResponsibilityforUtilityBillingandMeterReading

TheutilitybillingfunctionisperformedbyF&ITDepartmentstaffwhocoordinatewith

UtilityDepartmentWaterCustomerServiceTechniciansregardingserviceordersandmeter

readings. The division of customer services between the two departments can lead to

disconnectsincommunication,potentiallyaffectingcustomerservice.

WhiletheF&ITDepartmentandUtilityDepartmenthaveregularlyscheduledquarterly

meetings, theyareoccasionally cancelled,which leaves a void in communication. Finance

staffindicatesafeelingoflackofrepresentationbyFinancemanagementatthesemeetings.

The Utility Department contracted for a Utility Department Organizational Structure

Review,(BHIManagementConsulting)which,amongothertopics,consideredwhetherthe

utility billing function should be managed by the Utility Department or the F&IT

Department.TheReviewrecommendedthattheutilitybillingfunctionremainintheF&IT

Department,butthata“stronginter‐departmentalservicecreditagreement”beadoptedby

the departments, that outlines specific service expectations of both departments. Utility

Departmentstaffsupportsthisrecommendation.


20

Cities often combine meter reading and utility billing under one department. The

existing disconnects between the Utility Department and F&IT Department demonstrate

whythesetwofunctionsareoftenundersinglesupervision.However,inSanLuisObispo,

theWaterCustomerServiceTechnicians,whoreadmeters,alsoperformotherdutieswithin

thewaterdistributionsystemoperations.Aswell,WaterDistributionOperatorsarecross‐

trainedtocoverforWaterCustomerServiceTechnicians.

If the City used meter readers for meter reading only, this Assessment would

recommend consideration of combining the services in the F&IT Department. However,

these cross‐trained duties argue against transferring meter reading to the F&IT

Department.

TheBHIReportalsoconsideredcontractingoutthemeterreader function. If theCity

doesconsidercontractingoutmeterreading,orseparatingthemeterreadingduties from

other Water Customer Service Technician responsibilities, the City should consider

consolidatingthemeterreadingandutilitybillingundertheF&ITDepartment.

AnotheroptionconsideredbytheBHIReportwastomoveutilitybilling to theUtility

Department.TheReportraisedthequestionsastowhethertheUtilityDepartmenthasthe

administrative and physical capacity to assume this responsibility. If this approach is

considered, attention would need to be given to implementing an effective program of

internalcontrols. While thereareotherCityservices thatcollect funds in locationsother

thantheF&ITDepartment,theamountscollectedforutilityservicesaresignificantlymore

thanotherCityrevenues.

At this point in time, it seems logical to pursue the inter‐departmental service credit

agreement. If the departments are not satisfied with the results after a period of time

workingunderan inter‐departmental servicecreditagreement, first considerationshould

begiventocontractingoutthemeterreadingfunctionandcombiningitwithutilitybilling

intheF&ITDepartment.

CitystaffsuggestedmovingresponsibilityofdownloadingmeterreadstoUtilicodersto

UtilityDepartmentWaterCustomerService.ThisconceptwasnotdiscussedwiththeUtility

departmentandifconsidered,shouldbediscussedwiththatdepartment.


21

OutsourcingUtilityBillPrinting

TheF&ITDepartmentphysicallyprintsutilitybillinginvoicesandthenastaffmember

drives them to a commercial printer who completes the process of stuffing envelopes,

posting and mailing invoices. Some cities have outsourced the physical utility billing

processentirely. Electronic filescanbesentweekly tovendorswhowillprint,stuff,post

andmailtheutilitybills.Considerationshouldbegiventothisoption.

UseofaLockboxforUtilityPayments

TheCityhasseveralmethodsofreceivingpaymentsforutilitybills,includingbymail,in

personoron‐line.MailedchecksareprocessedbyCitystaff,who thendeposit thechecks

intotheCity’sbankaccount.TheCitydoesnotuseabanklockboxservice(alsoknownasa

remittanceservice),inwhichchecksaresenttoapostofficebox,collectedandprocessedby

thebankanddepositedintotheCity’saccount.TheCityshouldexploreuseofthistypeof

service.

RecommendedActions:

8.1. Commit to regular Utility Department/F&IT Department meetings with senior

managementandlinestafftodiscussandresolvepotentialconflicts.

8.2. Adopt a Utility Department/F&IT Department service credit agreement that

outlinesspecificserviceexpectations.

8.3. If the service credit agreement proves ineffective, consider contracting out

meetingreadingunderthemanagementoftheF&ITDepartment.

8.4. Explorecontractingwithamailhouseforprintingofutilitybills.

8.5. Exploreoutsourcingutilitybillingtoaprivatevendor,allowingelectronictransfer

ofbillingfilesandremoteinvoiceandmailingservices.

8.6. Exploreuseofabanklockboxservicetoreceiveandprocesscheckspaidonutility

bills.

9. ContractingforServices:

In addition to the recommendations for contracting for some of the utility billing

processes, thereareotheropportunities tocontract forcertainservices.Forexample, the

annual Streets and Roads Report and the State Controller’s Report are both currently


22

preparedin‐houseandarerequiredtobesubmittedduringthesametimeframeaswhen

theaudit isbeingprepared,TheCityshouldconsidercontractingwiththeCaliforniaState

Controller’s Office for preparation of the Streets and Roads Report, and with the City’s

auditor for the preparation of the State Controller’s Report. Doing so would free

approximately sixty hours of staff time during a high demand period, to focus on

implementingotherfinancialservicesreferencedinthisAssessment.

Thecityshouldevaluate thecosteffectivenessofcontracting for theseservices;many

citieshavefoundcontractingfortheseservicestobebeneficial.

RecommendedActions:

9.1. EvaluatecontractingforpreparationoftheStreetsandRoadsReportandtheState

Controller’sReport.

10. BudgetPreparationandFinancialManagement

ResponsibilityforBudgetPreparation

In past years, the two‐year Financial Plan and Budget was prepared by F&IT staff.

Because of transitions in the F&IT Department, preparation of the document was

transferredonaninterimbasistotheCityManager’soffice,administeredbyanadhocstaff

groupwithfinancialexperience,guidedbyseniorCitystaffandmanagement.Whilethereis

adequate communication with and cooperation from Finance staff in the current

arrangement, there is less direct access to important historical revenue and expenditure

dataandtrends, fundbalanceandworkingcapital information,encumbrancesandcapital

project funding status. Staff who work directly on a day‐to‐day basis in a Finance

Departmenthavemorefrequentexposuretorevenueandexpenseinformationandtrends,

as well as audit, working capital and fund balance information. They are better able to

integrateaccountingandbudgetinformationthanstaffthatoperatesonadailybasisaway

fromtheF&ITDepartment.

This Assessment recommends that the budget function be reassigned to the F&IT

Department followingadoptionof thenext two‐yearbudget,whichwillprovidesufficient

timefortheF&ITDepartmenttoreestablishskillsetsrequiredtopreparethebudget.The

preparationofthebudgetwouldbecoordinatedbytheF&ITDepartment;theCity’sexisting

collaborative process using ‘all‐hands” in the F&ITDepartment, including the Accounting


23

AssistantsandtheproposedAccountants,andfiscalstaffinallCitydepartmentsshouldbe

continued.

BudgetandFinancialAnalyses

This Assessment proposes that the budget function be assigned to a Budget and

FinancialAnalysisUnitwithin theF&ITDepartment. ThisUnitwouldmeetand fulfill the

City’s need for more financial analysis, and would be guided by a Budget and Financial

AnalysisManager. TheexistingAdministrativeAnalystpositionhasnotbeenfullyutilized

forfinancialanalysis,anditisproposedthatthispositionreporttotheBudgetandFinancial

AnalysisManager. TheUnit,alongwithotherpertinentF&ITstaff,andunder thegeneral

directionoftheDirector,wouldberesponsibleforallofthenon‐accountingfunctionsinthe

FinanceDivision,includingcommunicationwithCitydepartments’FiscalOfficers,monthly

andmid‐yearbudgetreports,secondyearbudgets,AB1600reports,costallocationstudies,

reviewofCityManagerandCityCouncilReports,analyzingandnegotiatingfinancialterms

of Development Agreements, economic development strategies, grant applications,

infrastructurefinancingstrategies,debtfinancingandfinancialanalysisofCitywideprojects

andinitiatives.

RecommendedActions:

10.1. Reassign the budget function to the F&ITDepartment following adoption of the

nexttwo‐yearFinancialPlanandBudget.

10.2. CreateaBudgetandFinancialAnalysisUnitintheF&ITDepartment,responsible

forallnon‐accountingfunctionsintheDepartment.

10.3. TrainstafftousethePentamationbudgetmoduleandusethismoduletoprepare

thenextCitybudget.

11. AccountingSkillsandPositions

AccountingLevelAnalyses

City staff reported that some departments are keeping track of their own financial

records,inessencecarryinga‘secondsetofbooks’.Concernswereraisedaboutthequality

andaccuracyofPentamationgeneralledgerrecords,particularlywithregardtoaccuracyof


24

recording grant reimbursements and the timeliness of recording expenditures,

encumbrancesandbudgetamendments.

City staff commented that the Finance Division does not always perform analysis of

accounts to assure that they are accurate, and attribute this to the lack of experienced

accountantsintheF&ITDepartment.

Citystaffreportedageneralneedformorefundanalysisandinformation,andreferred

specificallytotheneedformoreanalysisofthecurrentandlongtermavailabilityofspecial

revenuefunds,grants,impactfees,gastaxandproject‐levelcapitalimprovementfunding.

There is an absence of accounting‐level staff normally found in cities with the

complexityofSanLuisObispo.Thereisno“Accountant”classification,althoughthereisan

AccountingSupervisorpositionthatsupervisesseveralAccountingAssistants.

Accountantswouldprovideexpertise ingeneral ledgermanagement,accountanalysis,

fund financial conditionanalysis,balancesheetaccountanalysis, grantsaccounting,audit,

reports, account maintenance and budget support (such as working capital analysis,

encumbrancestatus,fundsavailableforCIP,etc.).Someoftheseskillsetsandfunctionsare

notevidentintheF&ITDepartmentnow.Forexample,thedraftauditmanagementletter

notedthatthefixedassetschedulehadnotbeenreconciledwiththegeneralledger,apre‐

audit process that would normally be performed by an experienced accountant. It also

notedthatauditadjustmentswerepostedto financialstatementsatthegovernment‐wide

level, and year‐end closing entries had been posted at the fund level or were recorded

incorrectly.Theneedforexperiencedaccountantsisevidencedbythesefindings.

ThisAssessmentrecommendsthatanAccountantclassificationseriesbeadopted.Two

accountingpositionsareproposedtoreplacetwoAccountingAssistantpositions.

The Accountant series would form the core of an Accounting Unit in the Finance

Division,whichwouldalsoincludealloftheAccountingAssistants.

There is aperception that toomuch informationandknowledgehasbeenvested ina

few higher level Finance positions, and that this knowledge has not been transferred

adequatelytootherFinancestaff. Asthesepositionshavebeenvacated,aknowledgegap

hasoccurred.EstablishinganAccountant serieswould spread theknowledgebase, and it

cancontributetosuccessionplanning.


25

RecommendedAction:

11.1. EstablishanAccountantseriesclassification,andretainexperiencedaccountants

inaccordancewiththeorganizationproposalinthisAssessment.

12. CityDepartments’StaffTraining

Citystaffindicatedseveralareasoftrainingthatwouldbedesirable:

Pentamationsystem–whatisavailableandhowisitaccessed?

Pentamationreport‐writingfunction(Cognos).

PeriodictrainingongeneralFinanceandaccountingtopics.

CityFinanceManualandCityRevenueManagementManual.

Newtimecardsystemandpayrollprocedures,tailoredtospecificemployees(i.e.

PublicSafety,generalemployees,etc.).

Job‐specifictrainingfornewlyappointedsupervisors.

RecommendedAction:

12.1. SurveyCitystafftodeterminetrainingprioritiesanddeveloparegularprogramto

trainCitystaffonfinanceandaccountingprocedures

13. KnowledgeTransferandSuccessionPlanning

It has been noted that too much knowledge was vested in too few positions in the

FinanceDivision.TheDirector,FinanceManagerandAccountingSupervisorpositionshave

historicallymanagedtheaccounting,financialandbudgetfunctions.Trainingsubordinates

toassume theresponsibilitiesof their supervisorsona short termbasis,orpermanently,

hasnotbeenimplemented.

Managers and supervisors tend to takeon the responsibilities of subordinatesduring

absences. Successiontraininghelpswhensomeoneisabsent;insteadofamanagertaking

onsubordinateresponsibilities,staffistrainedtomoveupwardtotakeonthenextlevelof

responsibility. Succession training should include supervisory andmanagement skills, as

wellastechnicalskills.

Overall,mentoringand in‐housesuccessionhasnotbeensuccessfully implemented in

theF&ITDepartment.


26

RecommendedActions:

13.1. Develop a concerted program to train all levels of staff to assume an “acting”

position for the next level in the organization, and develop a formal succession

planningeffortintheFinanceDivision.

13.2. Trainstaffforcareeradvancement.

14. InternalDepartmentalTraining

Finance staff indicated an interest in learning more of the ‘why’ processes and

proceduresandaccountingtasksareperformed,andhowtheyfitintothe‘biggerpicture’.

Financestaffindicatedaneedformoretrainingbysupervisorswhenassignedtoanew

desk.

Finance staff also indicted an interest in additional training on Pentamation report‐

writing,totakeadvantageofthefullcapacityoftheapplicationtoutilizedata.

RecommendedActions:

14.1. Survey Finance Division staff to determine the most desirable training and

implementaregulartrainingprogram.

14.2. Trainnewsupervisorsonsupervisoryskillsandexpectations.

15. HumanResource/FinanceDivisionCoordination

City staff noted that there is not always clarity on topics that arewithin the Human

Resources Department’s area of responsibility and those that are within the Finance

Division’sareaofresponsibility.

F&IT staff and Human Resources Department staff also expressed interest in more

coordinationofeffortinlabornegotiationssalaryandbenefitcostingandpersonnelbudget

estimates.Inmanycities,theHumanResourcesDepartmentpreparestheseestimates,but

a prudent practice is to have a separate FinanceDepartment review and confirmation of

personnelcostestimatesforlabornegotiationandbudgetpurposes.

Staff also expressed interest in more coordinated effort on benefit administration,

payroll,andimplementationofStateandFederalregulations.Generally,HumanResources

Department responsibilities should include policy, program, compensation and benefit


27

administration, while payroll and payment of payroll‐related withholding and benefits

shouldbeaFinanceDivisionresponsibility.

RecommendedActions:

15.1. Clarify,andthenprepareanddistributeawrittendescriptionofmattersthatare

the responsibility of the Human Resources Department and the F&IT

Department,withnamedindividualstocontactwithquestions.

15.2. Developregularlyscheduled,agendizedmeetings,attendedbymanagementand

line staff, to address coordination of Human Resources Department and F&IT

Departmentservices.

16. ProposedOrganizationalStructure

Thissectionproposesanorganizationalstructurethatfacilitatestheimplementationof

thepreviousrecommendationsintheAssessment.Itassumesthattherecommendationsto

modify workloads are implemented, such as processing of City contracts, outgoing mail

processingandutilitybillingprocessing.

Theproposedorganizational structure includes two ‘units’ in theFinanceDivision, as

discussedinthisAssessment.

AccountingUnit

The Accounting Unit would include a Finance OperationsManager, two Accountants,

andsixAccountingAssistants.ThisUnitwouldbe responsible for all revenue, accounting

andauditfunctions.

BudgetandFinancialAnalysisUnit

TheBudgetandFinancialAnalysisUnitwouldincludeaBudgetandFinancialAnalysis

Manager,anAdministrativeAnalystandaBudgetAnalyst.ThisUnitwouldberesponsible

for more than just the budget process. Beyond the annual budget coordination and

preparation,andunder theguidanceof theDirector, thisUnitwouldcoordinatewithCity

departments on grant applications, assist in analyzing and supporting negotiations of

financial terms of Development Agreements, develop economic development strategies,

analyze infrastructure financing strategies, provide ongoing budgetary analyses for City


28

departments and provide Citywide support on financial matters. It would provide staff

supportforallbuttheaccountingfunctionsintheFinanceDivision.Asiscurrentlythecase,

allFinanceDivisionstaffwouldcontinuetosupportthebudgetprocessaswell.

AdministrativeAssistance

A.5FTEAdministrativeAssistantisproposed,toallowmanagersandprofessionalstaff

tofocusonaccountingandfinancialmanagementmatters. Thispositionwouldhandleall

clerical and administrative support work for the Finance Division, prepare routine

departmental correspondence, draft routine staff reports, monitor employee evaluation

deadlines,processhumanresourcespersonnelactionformsandotherdocuments,schedule

meetings and handle the Division’s administrative and clerical functions. The position

wouldbesharedwiththeInformationTechnologyDivision.

RecommendationsandTriggers

The following chart summarizes the key proposed functional changes in the Finance

Divisionthathavestaffing implications, the“triggers”orrecommendationsthatshouldbe

implementedtofacilitatethechanges,andtheproposedstaffing.

Function RecommendationsandTriggers StaffProposedConfirmFinanceDivisionmissionandservices

Reassumeresponsibilityforbudgetmanagementandpreparation

Enhancecitywidefinancialanalysesandservices Relievemanagementofadministrativetasks

Authorize.5FTEAdministrativeAssistant

ImproveaccountingskillsandproceduresintheFinanceDivision

TrainedAccountantsshouldassumeaccountingresponsibilitiesfromAccountingAssistants

Accountantswillenhanceauditpreparationandreportingcapabilities

AccountantswillprovideenhancedanalysisservicestoCitydepartments

CreateAccountantclassificationseries

AuthorizetwoAccountantpositions

ReviseandreassignAccountingAssistantsresponsibilities

Issuequarterlybusinesslicenserenewals Departmentspostoutgoingmail Transfercontract/insuranceadministrationtoriskmanagement

Outsourceprintingofutilitybillspayments Implementlockboxsystemforutilitypayments ContractforStreetsandRoadsReport ContractforStateController’sReport AssignaccountingfunctionstoAccountants

EliminateoneAccountingSupervisorposition

EliminatethreeAccountingAssistantpositions

EstablishaBudgetandFinancialAnalysisUnit

ResponsibleforcoordinatingFinanceDivisionsupportandcitywidedevelopmentofbudget.

EnhancefinancialanalysisservicestoCitydepartments. Administerallnon‐accountingfunctionsinFinanceDivision.

CreateandauthorizeBudgetandFinancialAnalysisManagerposition

CreateandauthorizeBudgetAnalystposition

AssignAdministrativeAnalysttothisUnit


29

The proposed Finance Division organizational structure, staffing levels and reporting

relationshipsareindicatedbelow:

The net addition to the Finance Division would be one‐half position, the .5 FTE

AdministrativeAssistant.TwoAccountants,oneBudgetandFinancialAnalystManagerand

oneBudgetAnalystwouldreplacethreeAccountingAssistantpositionsandoneAccounting

Supervisorposition.

RecommendedAction:

16.1. Seek approval and implement the organizational structure as proposed in this

Assessment.

F&IT Director

Finance Operations Manager

Accountant III

Accountant IAccounting Assistant (2)

Supervising Accounting Assistant


Budget and Financial Analysis

Manager

Administrative Analyst

Budget Analyst

Administrative Assistant (.5)


30

IV. FINANCEANDINFORMATIONTECHNOLOGYDEPARTMENTREVIEW‐

INFORMATIONTECHNOLOGYDIVISIONASSESSMENTAND

RECOMMENDATIONS

_________________________________________________________________________________________________

AsdiscussedinChapterIII,MRGmetwithrepresentativesofCitydepartmentstogain

insights from “internal users” as towhichF&ITDepartment processes and serviceswork

well, andwhat can be done to enhance processes and services. MRG alsometwith the

InformationTechnologyDepartmentstaff inagroupmeeting, togainanunderstandingof

howtheIToperationsarestructuredandhowservicesareprovidedbydepartmentalstaff.

TheinternalcustomerandITstaffobservationsandinputarediscussedinthisChapter,

aswellasMRGinputbasedonourexperiencewithsimilaragencies.Recommendationsare

providedtoaddressorganizationalandserviceissuesthathavebeenraised.

As alsodiscussed in thepreviousChapter, it is important tonote that interviewsand

meetingswithCitystaffgeneratedbothfactsandperceptions.Whilesomeperceptionsmay

notbegroundedsolelyinfact,theyarenonethelessimportanttoaddressintheAssessment

andbytheF&ITDepartmentandtheCity.

The F&IT Department recently completed an Information Technology Strategic Plan

(“ITSP”),whichisacomprehensiveanalysisofthecurrentCitytechnologyenvironmentand

a roadmap to ensure that technology effectively supports the City’s current and future

needs. The City also has an Information Technology Steering Committee comprised of

representativesofCitydepartments. ThisAssessment is intendedtosupplement,andnot

supplant, the Information Technology Strategic Plan and the work of the Steering

Committee.Similarly,with fewexceptions, theITSPrecommendationsarenotrepeated in

thisAssessment.



This Chapter addresses information technology services provided by the F&IT

Department.


31



The InformationTechnologyDivision is part of the existing F&ITDepartment. While

therehasbeentransitionintheDirectorleveloftheF&ITDepartment,themanagementand

supervisionoftheInformationTechnologyhasbeenstable.

InformationTechnologystaff indicatedastrongpreferencetoremainpartoftheF&IT

Department.CitydepartmentsdidnotexpressanyreasonorpurposeinseparatingtheIT

Division from the F&IT Department. This Assessment found no reason to separate the

InformationTechnologyDivisionfromtheF&ITDepartment.

2. InformationTechnologyRoleandStaffing

Interviewswith City staff and IT staff revealed that the City hasmade an aggressive

effort to implementnewapplicationsandsystemsandreplaceolderapplications. Recent

projects include implementation of the new time card system, efforts to implement an

Energov permitting system, implementation of a new utility billing system and other

applications,whilemaintainingtheexistingGISandnetworks.Citydepartmentsdescribed

theCityasintechnology“fatigue”and“overload”.

CitystaffobservedthatITstaffisresponsiveandcustomerserviceoriented.Thereisa

highservicelevelexpectation. However,thehighdemandfornetworkservices,helpdesk

assistance, and implementing andmaintaining applicationshas caused the IT staff to feel

reactive, not proactive. There is a strong impression thatmore time should be spent on

security, implementing best practices, updating GIS mapping and other forward‐looking

activities.

CitystaffindicatedthattheITDivision’sroleandmissionneedstobeclearlydefined,

projects need to be prioritized, and resources (staff and contracts) need to be funded to

meetCityexpectations.

In the past, City departments have selected and/or implemented applications,

sometimeswithoutITstaff inputorguidance,yetITstaffnecessarilybecomesinvolvedin

maintainingtheapplications.ThisraisesthequestionastotheITDivision’sroleinadvising

andworkingwithCitydepartmentsinselectingandimplementingapplications.Itisoneof

thereasonsthattheITSPrecommendsanApplicationsSupportUnit. TheITDivisionisin


32

theprocessofupdatingtheCity’sapplicationinventory,inordertohaveacompleterecord

ofapplications.

Citystaffalso identifiedtheneedfor ‘businessprocess’skillsandservices fromthe IT

Division,tohelpinmatchingoramendingexistingprocesseswiththosethatareembedded

inoff‐the‐shelfsoftwareapplications,andviceversa.

StaffingLevels

Current IT staffing includes 9.25 FTE positions: an ITManager, two Supervisors, one

DatabaseAdministrator,a .75FTEITAssistant,threeNetworkAdministratorsand1.5FTE

GISspecialists.InternsarealsooccasionallyusedbytheITDivision.

As discussed above, there is a need to match resources with expectations. The ITSP

proposes a full‐time help desk representative and reorganization of the IT Division to

includeaCustomerServiceUnit andanApplicationsSupportUnit. Asbudgetallows, the

ITSP recommends additional staff resources for applications support and project

management, aswell as evaluating additional staff to implement andmaintain additional

systemsandapplications. Anadditional full‐timehelpdesktechnician is the ITDivision’s

highestpriority.

ReviewFundingSources

The IT Divisionwill be reviewing current budgeted appropriations that are normally

usedforcitywideequipmentpurchasesonapay‐as‐you‐gobasis,andasanalternative,use

leasepurchases inorder to stretch thedollars andprovide for ameansof freeingup the

dollarstosupporttheproposedstaffpositions.

StaffingPriorities

TheCitybudgetprocessallowsdepartmentstoproposenewpositions,andtheprocess

evaluates thepriorityofalldepartmentalproposals.TheF&ITDepartmenthassubmitted

proposals foradditional IT staff. Thesewere submitted for thenext2‐year funding cycle

butnotfundedwiththeexceptionofincreasingthe75%helpdesktechniciantofull‐time.

As discussed and recommended in Chapter III, an F&IT Department Administrative

Assistantwouldprovide .5 FTE ITDivision support thatwould allow IT staff to focus on

maintenanceofsystemsandimplementationoftheITSP.Thefunctionsthatwouldbetaken


33

over by the Administrative Assistant include the preparation of numerous Request for

Proposal documents, assisting in evaluation of bids, drafting routine staff reports,

monitoringemployeeevaluationdeadlines,routineprocessingofpersonalactionformsand

other human resources documents, processing vendor payment requests, bid openings,

preparation of semi‐annual budget documents including goal status updates and other

administrativetasks.Thiswouldhelptorelievesomeoftheadministrativeworkloadnow

performedbyNetworkAdministrators.

ThefollowingchartsummarizesthekeyproposedfunctionalchangesintheITDivision

that have staffing implications, the “triggers” or recommendations that should be

implementedtofacilitatethechanges,andtheproposedstaffing.

Function RecommendationsandTriggers StaffProposedCustomerServiceandApplicationsSupport

ImplementITSPrecommendationtoestablishaCustomerServiceUnitandApplicationsSupportUnit

Evaluatecostsavingsfromleasingratherthanpurchasingequipment

Asfundingisidentifiedandavailable

AuthorizeITSPandITDivisionstaffingrecommendations

Administrativesupport Evaluatecostsavingsfromleasingratherthanpurchasingequipment

Asfundingisidentifiedandavailable

Authorizea.5FTEAdministrativeAssistant

RecommendedActions:

2.1. Evaluatepotentialcostsavingstobeachievedfromleasingratherthanpurchasing

equipment,tobeabletoprovidefundstosupportproposedstaffinglevels.

2.2. Implement the ITSP recommendation to establish anApplications SupportUnit,

with additional business processes skills and services. The Database

Administratorwillsoonbeassumingtheapplicationsupportrole.

2.3. Implement the ITSP recommendation to fund the Tier I and Tier II help desk

systemandthefulltimehelpdeskrepresentative.

2.4. Implement this Assessment’s recommendation to create a .5 FTE F&IT

AdministrativeAssistantposition,tobesharedbytheITDivisionandtheFinance

Division.

2.5. Empower and involve the IT staff in early and continuous discussions and

consideration of new applications. This can be accomplished through the IT

SteeringCommittee.


34

2.6. Continue to use the IT Steering Committee to prioritize IT projects, and to

recommend staffing levels required to implement IT objectives and tomaintain

existingsystems.

2.7. The IT Department should continue to utilize adjusted shifts as workload

conditionspermit,totakeadvantageofoff‐peaktimeformaintenanceofsystems.

3. EstablishandEnforceStandardsandPolicies

There are a number of factors that drive the demand for IT Division services. City

departmentstaffhaveusedthumbdrivestoimportdocuments,openedpotentiallyinfected

emailattachments,installed“rogue”applications,madechangestoGISdatabasesandother

actions thatmay impact theneed for ITservices. Datastoragehasbecomean increasing

problem because unnecessary documents continue to be retained on Citywide shared

drives.

Many policies already exist, but need to be updated and reviewed by the IT Steering

Committee. Overall, there is a need to establish, and more importantly, enforce policies

governingcomputerandapplicationsuse.

SecurityanddatastoragearetheITDivision’stwohighestpriorities.

SystemsecurityisacriticalcomponentoftheITresponsibilities.TheITDivisionneeds

to have sufficient resources to ensure security, and must make system security a high

priority.

RecommendedActions:

3.1. Establishclearpoliciesandstandardsforcomputerandnetworkuse,andactively

enforcesuchpolicies.

3.2. Establishadataanddocumentretentionpolicy,andinitiateaprogramtoeliminate

unnecessarydataanddocumentsfromCitywideshareddrives.

3.3. Provide resources to ensure system security and make system security a high

priority.

4. ITHardwareandApplicationsInventoryandReplacementFunding

It was noted during the Assessment that the IT Division does not have a complete

inventoryofallinstalledapplications.Aninventoryofhardwareandsoftwareapplications


35

is important, tobeable to identify replacement cyclesand funding sources. TheCityhas

recently implemented an internal service TechnologyReplacement Fund, but has not yet

establishedapolicyforuseoftheaccumulatedfundsforfutureequipmentreplacement.

RecommendedActions:

4.1. Developacompleteinventoryofallhardwareandapplications.

4.2. Implement policy governing use of internal service Technology Replacement

Fundsforthereplacementofhardwareandapplications.

5. Training

Training City staff is a long‐term investment that can reduce help desk calls and can

positivelyaffectdemands for IT services. Orientationand training fornewemployees is

particularlyimportant.

Asoneemployeedescribed,“weneedtotakethetimetoteachpeopletofish.”Citystaff

expressedinterestandsupportinadditionaltraining.TheCityhasawell‐regardedoutside

consultantwhoprovidestrainingtoCitystaff.

In addition, “training the trainer” builds in‐house capacity, particularly for new

applicationsthatcomeonline.

AmongCitystaff,therearemanyexperienced“power‐users”whocanalsobedraftedto

providetraining,supplementingITstaffandconsultanttrainingresources.ITstaffisaware

of the “power users” in the organization and has planned a series of lunch and learn

sessionstohelpbringthoseidentifiedusersuptospeed.

RecommendedActions:

5.1. Survey city departments for training needs, and develop a prioritized training

program.

5.2. SeekoutCitydepartmentpower‐usersandengagethemastrainers.

5.3. Continue to use outside consulting services to supplement IT staff in‐house

training.

5.4. Provide sufficient resources to train IT staff on new applications that may be

broughtonline.


36

V. HUMANRESOURCESDEPARTMENT

____________________________________________________________________________________________________

AsdiscussedinChapterIII,MRGmetwithrepresentativesofCitydepartmentstogain

insights from “internal users” as to which Human Resources Department processes and

servicesworkwell,andwhatcanbedonetoenhanceprocessesandservices.MRGalsomet

withtheHumanResourcesDepartmentstaffinagroupmeeting,togainanunderstanding

ofhowtheHumanResourcesoperationsarestructuredandhowservicesareprovidedby

departmentalstaff.

TheinternalcustomerandHumanResourcesstaffobservationsandinputarediscussed

in this Chapter, as well as MRG input based on our experience with similar agencies.

Recommendationsareprovidedtoaddressorganizationalandserviceissuesthathavebeen

raised.

As alsodiscussed in thepreviousChapter, it is important tonote that interviewsand

meetingswithCitystaffgeneratedbothfactsandperceptions.Whilesomeperceptionsmay

notbegroundedsolelyinfact,theyarenonethelessimportanttoaddressintheAssessment

andbytheHumanResourcesDepartmentandtheCity.



ThisChapteraddressesservicesprovidedbytheHumanResourcesDepartment.



TheHumanResourcesDepartmentconsistsofoneDirectorandfourstaffmembers.All

positions report to the Director. Departmental functions are clearly assigned among the

staff. There has been consistency and stability in the leadership andmanagement of the

Department. No recommendations regarding leadership and management of the

DepartmentareofferedbythisAssessment.


37

2. OrganizationalReportingOptions

TheHumanResourcesDepartment currently reports directly to the CityManager. As

discussed in Chapter III, one of the key questions posed as part of this Assessment is

whether the Human Resources Department should remain as a single department, or be

merged with Finance & Information Technology Department (as well as other potential

functions) into an Administrative Services Department. One factor driving this question

was whether an Administrative Services Department would attract qualified Director

candidates.AsaresultofthisAssessment,MRGrecommendsthattheCityrecruitforF&IT

Directorcandidateswithstrongfinanceexperience.Basedonthesefactorsalone,MRGdoes

not recommend the creation of an Administrative Services Department, because it may

attract candidates who are less focused on the important finance matters that must be

addressed.

Moreover, theHumanResourcesDepartmentadministersawidevarietyofprograms,

some of which are highly confidential, including labor relations, personnel records,

disciplinarymatters and other personnelmatters. For these areas of responsibility, it is

important for the Human Resources Department to report directly to the City Manager.

Based on these factors, as well as the factors discussed in Chapter III, this Assessment

recommendsthattheHumanResourcesDepartmentremainasadepartmentreportingto

theCityManager.

RecommendedAction:

2.1. RetainaseparateHumanResourcesDepartment.

3. HumanResourcesDepartment/FinanceDivisionCoordination

Chapter III addressed the “touch points” between the Human Resources Department

andtheFinanceDivision.Foreaseofreview,theyarerepeatedhere.

City staff noted that there is not always clarity on topics that arewithin the Human

Resources Department’s area of responsibility and those that are within the Finance

Division’sareaofresponsibility.

F&IT staff and Human Resources Department staff also expressed interest in more

coordination of effort, including salary and benefit costing, budget preparation, benefit

administration,payrollcoordinationandimplementationofStateandFederalregulations.


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RecommendedActions:

3.1. Prepareanddistributeawrittendescriptionofmattersthataretheresponsibility

of the Human Resources Department and the F&IT Department, with named

individualstocontactwithquestions..AsdiscussedpreviouslyinthisAssessment,

compensationandbenefit administration shouldbeHumanResources functions

whilepayrollandpaymentofpayroll‐relatedwithholdingandbenefitsshouldbe

FinanceDivisionresponsibilities.

3.2. Develop regularly scheduled, agendizedmeetings, attendedbymanagement and

line staff, to address coordination of Human Resources Department and F&IT

Departmentservices.

4. SafetyPrograms

City staff noted that additional administration and coordination of safety programs

would be desirable. It is recommended that the Human Resources Department take

responsibility for centralizing safety administration, training offerings, requirements,

records and certifications. Currently, eachdepartmentdetermines training requirements

andpriorities,andtrackstrainingandcertifications.

RecommendedAction:

4.1. Conveneacitywidediscussiononoptionstocentralizesafetyadministrationand

trainingfunctions,recordkeepingandcertifications.

5. Training

City staff noted an interest in additional training, including first‐time supervisor

training, writing performance reviews, succession planning and organizational

development.

RecommendedAction:

5.1. Survey City departments to determine desirable training topics; prioritize and

providetrainingonhighestprioritytopics.


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6. RecruitmentProcess

City staff commented that the current recruitment process does not permit City

department Directors or their representatives to screen resumes and applications. At

present,resumesandapplicationsarescreenedbytheHumanResourcesDepartmentanda

representativefromanotherdepartment,andanoralboardpanelranksthetopcandidates,

whoarethenreferredtothedepartmentforinterviewsandselection.

The Human Resources Department has prepared a Draft Recruitment Guide that

outlines the existing process. Human Resources staff plan to work with internal

departments to gather proposed modifications to the recruitment process that should

address City staff suggestions and maintain a highly defensible and legally compliant

process.

RecommendedActions:

6.1. Review with City departments the Draft Recruitment Guide that includes the

opportunity for a separate departmental representative to screen resumes and

applications,andforanin‐houserepresentativetoparticipateasamemberofthe

oralboardpanel.

6.2. Implementagreeduponproceduralchangesinrecruitmentprocesses.

7. RiskManagement

TheHumanResourcesDepartmentiscurrentlyresponsibleforriskmanagement,which

includesadministrationoftheCity’sliabilityandworker’scompensationprograms.While

MRGdidnotconductacomprehensiveassessmentof thesefunctions forSanLuisObispo,

we did recently prepare a benchmark survey on legal services for another client, a

componentofwhichwas theassignmentof riskmanagement functions in thebenchmark

cities.Thedataindicatedthatincitieswithin‐houseCityAttorneyoffices,riskmanagement

isoftenassignedtotheCityAttorney’soffice.IncontractCityAttorneyarrangements,risk

management was typically assigned to the Human Resources Department or the City

Manager’soffice. AssigningtheliabilityportionofriskmanagementtotheCityAttorney’s

office has the advantage of closely connecting claims administration with legal staff. In

addition, and as recommended in this Assessment, review of insurance and performance

bond certificates and indemnification requirements is best administered by a risk


40

management function that is closely connected with legal counsel, and by staff who are

trained to understand insurance and indemnification objectives and the adequacy of

insurancecertificationsthataresubmittedtotheCity.

Administration of workers compensation programs in our benchmark survey was

almostuniversallyperformedbyHumanResourcesDepartment.

RecommendedAction:

7.1. Consider transferring risk management functions to the City Attorney’s office,

including review and approval of insurance requirements in contracts, while

retaining worker’s compensation program responsibilities in the Human

ResourcesDepartment.

8. HumanRelationsCommissionStaffing:

During the course of the Assessment, it was noted that the Human Resources

DepartmentstaffstheCityHumanRelation’sCommission.TheHumanRelationsCommittee

advisestheCityCouncilonmattersconcerningsocialproblemsaffectingtheresidentsofthe

City, assists in tenant/landlord problems, and reviews and recommends grants‐in‐aid to

assistgroupsthatprovidehumanservicesprograms.

It is not immediately clear thatHumanResourcesDepartment staff is necessarily the

best trained or the most qualified in the subject matter under the purview of this

Commission.

TheAssessmentdidnot identify thehistorical reason forassigning thestaffingof this

Commission to the Human Resources Department. In other cities, staffing similar

commissionsisoftenbasedonthetypesofhumanrelationsissuesthatareintendedtobe

addressed. For example, if law enforcement issues are among are commission’s purview,

PoliceandCityAttorneyofficesmaysupportacommission.Alternatively,ifhomelessand

transitionalhousingmattersareacommission’sfocus,aHousingAuthorityoraCommunity

DevelopmentDepartmentmaysupportacommission.


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RecommendedAction:

8.1. Review theappropriatenessofassigningHumanResourcesDepartment tostaff

the Human Relations Commission. Consider transferring this function to the

CommunityDevelopmentDepartment.

9. HumanResourcesDepartmentStaffLevels

Aspresentedabove,theHumanResourcesDepartmentstaffconsistsofoneDirector

and four staff members. City staff did comment that the Human Resources Department

accomplishesmanytaskswithlimitedstaff.

If the riskmanagementandHumanRelationsCommissionstaffingresponsibilities

are transferred from theHumanResourcesDepartment, theworkloadwould bemore in

linewiththeexistingstaffing.However,ifadditionalsafetyandtrainingtasksareadded,as

recommended by this Assessment, there would be added workload. On balance, this

Assessment recommends an incremental addition to the Human Resources Department

staff. As an initial step, a part‐time training and safety coordinator position is

recommended, responsible for the centralizing safety and training offerings, training and

safetyrequirements,recordsandcertifications.

The following chart summarizes the key proposed functional changes in the Human

ResourcesDepartment thathave staffing implications, the “triggers”or recommendations

thatshouldbeimplementedtofacilitatethechanges,andtheproposedstaffing.

Function RecommendationsandTriggers StaffProposedAssumeresponsibilityforsafetytrainingofferings,trainingandsafetyrequirements,recordsandcertifications

TransferriskmanagementresponsibilitiestotheCityAttorney’soffice

TransferHumanRelationsCommissionsupporttoCommunityDevelopmentDepartment

Assumeresponsibilityforcentralizedsafetyadministrationandtrainingfunctions

Authorize.5FTESafetyCoordinator

RecommendedAction:

9.1. Consideraddingonepart‐timesafetyandtrainingcoordinatorstaffpositiontothe

Human Resources Department, responsible for the centralizing safety training

offerings,trainingandsafetyrequirements,recordsandcertifications.


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10. HumanResourcesInformationSystem(HRIS)

While theFinanceDivisionuses theexistingPentamationHRISmodule forpayroll

purposes, theHRISsystem isnotcurrentlyutilizedby theHumanResourcesDepartment.

There are many databases that can be maintained in an HRIS system that enhance the

efficiency of aHumanResourcesDepartment, including employee census information for

workers compensation and insurance reporting, data for State and Federal reporting

purposes,trainingandsafetycertificationrecords,performanceevaluationtracking,benefit

enrollments,compensationhistory,leaveusagedata,jobapplicanttrackingandotherdata

and reporting functions. HRIS systems allow individual employees to access and revise

theirpersonalrecordsforsuchpurposesasaddresschanges,insteadofHumanResources

Departmentstaffimplementingnon‐confidentialinformation.

The Assessment did not evaluate the available functions offered by the current

Pentamationsystem.Similarly,theAssessmentdidnotspecificallyevaluatetheCity’sHRIS

functional and database priorities. The Human Resources Department should identify its

HRISprioritiesandimplementthePentamationHRISsystem.

RecommendedAction:

10.1. IdentifytheCity’sHRISprioritiesandimplementafullyfunctioningHRISsystem.


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VI. ASSESSMENTSUMMARY

____________________________________________________________________________________________________

MunicipalResourceGroupLLChas performed thisAssessmentbasedon the scope of

workdefinedbytheCity.TherecommendationsarebasedontheinterviewswithCitystaff

andourreviewofCitydocuments,combinedwithourexperienceinmanagingCityFinance

and InformationTechnologyDepartments andHumanResourcesDepartments, aswell as

workingwithotherpublicagencyclientsinsimilarassessments.

WewouldliketothanktheCityofSanLuisObispofortheopportunitytopreparethis

Assessment.OurappreciationisextendedtoCitystafffortheircooperationandinsightsin

supportofthisproject.

A‐1

AppendixA

MunicipalResourceGroupLLCwouldliketothankthemembersoftheSanLuisObispoCitystaffwhoprovidedvaluable input and insights for thisAssessment. The following individualsparticipated inthisAssessment.

DepartmentHeadsKatieLichtig,CityManagerMichaelCodron,AssistantCityManagerWaynePadilla,InterimFinanceDirectorMonicaIrons,HumanResourcesDirectorCarrieMattingly,UtilitiesDirectorDarylGrigsby,PublicWorksDirectorCharlieHines,FireChiefDerekJohnson,CommunityDevelopmentDirectorShellyStanwyck,ParksandRecreationDirectorChristineDietrick,CityAttorneyInternalCustomersBarbaraLynch,PublicWorksDeputyDirectorMelissaMudgett,PublicWorksAdministrativeAnalystJulieCox,AdministrativeAnalyst,FireMelissaEllsworth,AdministrativeAnalyst,PoliceDebbieMalicoat,UtilitiesOperationsManagerKeithStorton,Captain,PoliceAndreaVisveshwara,AssistantCityAttorneyInformationTechnologyStaffSteveSchmidtLynnWilwandMiguelGuardadoEricGeddesJasonTakagiJasonDornishTimCoolDavidYunDawnHutchinsonMaryAndrewsDerekCrawford

HumanResourcesStaffMonicaIronsGregZocherKathyHamiltonNickoleSutterKateAuslenFinanceStaffMetteRichardsonMarjorieHernandezLindaMcDonaldJenniferThompsonLorraineColleranKimYoungbloodAmeronJudgeBarbaraHageTraciKawaguchiJaniceHarrisBudgetTeamAprilRichardsonBrigitteElkeRachelMcClure

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