Recommendation
Number Description Responsible for
Implementation
Time
Frame Corrective Action Plan May 2023 Update June 2023 Supplemental Update November 2023 Update May 2024 Update 1 To help ensure that Richmond maintains appropriate reserves for times of fiscal uncertainty, city staff should, by June 2023, review Richmond's reserve policy to determine whether a higher reserve target is appropriate. As part of the review, staff should consider all the factors the Government Finance Officers' Association (GFOA) recommends for setting a reserve target. Once that review is complete, city staff should present proposals to the city council for modifying the city's policy.
City Manager Office
&
Finance
6/30/2023
Schedule City Council review/consideration of updated General Fund reserve policy in March 2023 for implementation in the Fisacl Year (FY) 2023-2024 Budget, for adoption by June 2023.
Staff presented GFOA best practices to the City
Council on May 2, 2023, with the first draft budget for FY23-24
Staff presented GFOA best practices to the City
Council on May 2, 2023, with the first draft
budget for FY23-24. Based on the GFOA best
practices, on June 27, 2023, the City Council adopted
a revised Cash Reserve Policy (see Attached, Cash
Reserve Policy)
Completed per June 2023 supplemental
update.
Completed per June 2023 supplemental
update. Annual financial policy review and
update to Council in May 2024.
2 To decrease the risk that Richmond will deplete its reserves, city staff should, by June 2023, present to the city council a list of proposed budget actions that would help ensure balanced budgets and eliminate projected deficits.
City Manager Office
&
Finance
6/30/2023
Present contingent, long-term budget balancing options with the FY 2023- 2024 proposed budget, by June 2023.
Staff presented a balanced first draft of the FY23-24
budget on May 2, 2023, to adopt a balanced budget by
June 30, 2023
The City Council adopted a balanced budget for Fiscal
Year 2023-2024 on June 20, 2023 (see Attached
Fiscal Year 2023-2024 Budget Staff Report)
Completed per June 2023 supplemental
update.
Completed per June 2023 supplemental
update. Proposed FY2024-25 budget
projections go to Council in May 2024.
3 Richmond should include multiple scenarios in its financial projections, including scenarios with potential additional risks, such as economic downturns or recessions, and how the city would continue to fund its operations under those circumstances.
City Manager Office
&
Finance
On Going
Present expanded 5-year financial projection with the FY 2023-2024 Proposed Budget, by June 2023.
Staff will present a draft five-year forecast (with
scenarios) to the City Council in June 2023, for review and discussion.
The City staff presented a multiple scenarios forecast
to the City Council on June 6, 2023. (see Attached
staff report that the City Council received the Five Year Forecast)
Completed per June 2023 supplemental
update.
Completed per June 2023 supplemental
update. Proposed FY2024-25 budget
projections go to Council in May 2024.
4 To ensure that Richmond is able to fund its retirement-relatedcosts, city staff should, by June 2023, propose to the city council a specific policy regarding funding of its pension trust fund for this purpose. Staff should report to the city council on estimated long-term savings from increasing its direct payments to Cal PERS compared to investing the same amounts in its pension trust fund. Staff members should use this information to inform their recommendations related to funding targets for the pension trust fund and should consider recommending that the council increase the city's payments directly to CalPERS.
City Manager Office
&
Finance
6/30/2023
Schedule City Council review/consideration of updated Pension funding policy in March 2023 for implementation in the FY 2023-2024 Budget, for adoption by June 2023.
The City has contracted with GovInvest to keep an on-
going monitoring of the retirement related costs and
impact of funding initiatives. First presentation to the City Council is expected on May 16, 2023
GovInvest presented a Pension Funding PowerPoint
presentation at the May 16, 2023, City Council
meeting and NHA Advisors presented a PowerPoint
presentation on CalPERS Unfunded Accrued Liability
Cost Management Strategies at the June 6, 2023, City
Council meeting. Based on these presentations the
City Council adopted a new Pension Funding Policy
(see Attached Pension Funding Policy)
Completed per June 2023 supplemental
update.
Completed per June 2023 supplemental
update. Annual financial policy review and
update to Council in May 2024.
5 To improve the city's ability to pay other post-employmentbenefits, Richmond should, by June 2023 and annually thereafter, implement a policy identifying funds, such as surpluses or one- time revenues that should be contributed to the OPEB trust fund. Staff should conduct an annual analysis to determine whether any funds availableto the city are applicable under the city's policy and should present a proposal to the city council to apply those funds to the trust fund.
City Manager Office
&
Finance
6/30/2023
Schedule City Council review/consideration of updated OPEB funding policy in March 2023 for implementation in the FY 2023-2024 Budget, for adoption by June 2023.
City staff will be presenting options to the City Council regarding OPEB-Prefunding on June 2023.
On June 27, 2023, City Council adopted a revised
OPEB Funding policy (see Attached OPEB funding
Policy)
Completed per June 2023 supplemental
update.
Completed per June 2023 supplemental
update. Annual financial policy review and
update to Council in May 2024.
6 To mitigate the costs of increasing salaries, the city should perform a workforce analysis by June 2024. Based on the results of the analysis, the city council should consider eliminating vacant positions that it deems no longer necessary. Additionally, the city should assess its need for each vacant position before it seeks to fill the positions and eliminate any positions that it does not need.
City Manager Office
&
Human Resources
6/30/2024
The City is issuing a Request for Proposal for a professional firm to conduct a formal workforce analysis. While the City evaluates the professional firms that replied to the Request for Proposal, the City will do an annual analysis of funded positions proposed by departments during the annual budget process, starting with the FY 2023-24 budget, by June 2023.
Due to time constraints of City Council meeting on
May 2, 2023, the results of the workforce analysis
RFP is tentatively scheduled to go to the City Council
on May 16, 2023.
Staff originally brought the results of the RFP to
perform a workforce analysis to the City Council on
May 2, 2023. Due to the large volume of agenda items,
the RFP was awarded to Raftelis to perform the
Workforce Analysis and the contract was approved by
the City Council on May 23, 2023.
Raftelis has started the workforce analysis,
in the first phase of the analysis, several
department and division heads were
interviewed to assess the current state of
workload and staffing levels. The study will
be concluded before June 30, 2024.
Raftelis provided an update which was
provided to Council on consent on
February 20, 2024 (see attached staff
report and Powerpoint).
7 To ensure compliance with federal requirements, Richmond should dedicate the resources necessary to provide records needed for an independent auditor to complete all outstanding single audits of the housing authority within the next fiscal year. To comply with existing legal obligations, Richmond should make available sufficient resources to enable the Housing authority to resolve all past due requirements of the recovery agreement and to meet the remaining deadlines in a timely manner by January 2024.
City Manager Office
&
Richmond Housing
Authority
1/1/2024
Identify and assign resources to complete Housing Authority Single Audit backlog by June 30, 2023. Identify and assign resources to complete Housing Authority Recovery Agreement actions by January 2024.
The City has made the following resources available to
RHA: Senior Accountant, Outside Consultant,
Accountant I, Interim Director Housing Authority.
Please see recommendation number 8 supplemental
update
Completed per June 2023 supplemental
update.
Resources have been provided per May
2023 update. Audit completion is in
progress.
8 To define Richmond's responsibility related to the housing authority, Richmond should immediately enter into a written agreement with the housing authority defining each entity's financial responsibilities and draft plans to resolve past tax liabilities and prevent unnecessary new liabilities.
City Manager Office
&
Richmond Housing
Authority
2/28/2023
Draft and Schedule City Council consideration of Housing Authority Administration Agreement by February 2023.
The City and RHA are in process of preparing a draft
written agreement regarding tax liabilities and
prevention of unnecessary new liabilities.
On June 27, 2023, City Council approved a written
agreement between the City and the Richmond
Housing Authority (see Attached, Richmond Housing
Authority & City Administrative Services Agreement)
Completed per June 2023 supplemental
update.
Completed per June 2023 supplemental
update.
9 To ensure that Richmond is receiving the best value when entering into contracts, city staff should immediately begin documenting that they are following the contracting requirements in the city's municipal code and contracting policies for all contracts.
City Manager Office
&
Finance
6/30/2023
Draft and implement Contract Compliance Documentation processes by June 2023.
City staff conducted an assessment of training
materials to ensure compliance with contracting
requirements in the City's Municipal Code and
contracting policies. Staff prepared training programs to help employees develop the knowledge and skills to
ensure compliance. [See Attached pdf Contract
Compliance Training]
See May 2023 update Completed per May 2023 update. Completed per May 2023 update. Annual Policy review and updates go to Council
May 2024.
10 To reduce potential errors and omissions by city staff members when contracting for goods and services, by January 2023 Richmond should require its finance department to create a comprehensive checklist of required documentation for contract files that other departments must follow when conducting procurements.
City Manager Office
&
Finance
6/30/2023
Draft and implement Contract Compliance Checklist by June 2023. City staff compiled comprehensive checklists that are being utilized in reviewing and approving all contracts to ensure that proper procurement procedures and
adherence to applicable City policies is being
followed. [See Attached pdf Contract Compliance
Checklists].
See May 2023 update Completed per May 2023 update. Completed per May 2023 update.
Additional updates to checklist have been
made and will be included with annual
policy review and updates to Council May
2024.
11 To ensure that city fees appropriately cover the cost of providing services, by June 2023, Richmond should determine a cost-effective frequency for updating its fee schedule to reflect all allowablecosts, including adjusting fees for inflation as appropriate.Richmond should then revise its municipal code as necessary.
City Manager Office
&
Finance
6/30/2023
Review and update the Fee Schedule policy for City Council consideration and update of Municipal Code as needed by June 2023.
On May 2, 2023 the City Council adopted an
ordinance (first reading) to update the Master Fee
Schedule annually (rather than quarterly).
On June 6, 2023, the City Council adopted an
ordinance revising the Master Fee Schedule to
annually (rather than quarterly). (see Attached revised ordinance)
Completed per June 2023 supplemental
update.
Completed per June 2023 supplemental
update. Public Hearing for Master Fee
Schedule updates in May 2024.
February 20, 2023
Human Resources
DATE: February 20, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Nickie Mastay, Deputy City Manager, Internal Services
Sharrone Taylor, Director of Human Resources
Subject:
Raftelis Workforce Analysis Update
FINANCIAL IMPACT: N/A
PREVIOUS COUNCIL
ACTION:
Click or tap here to enter text.
STATEMENT OF THE
ISSUE:
Raftelis will provide a PowerPoint presentation to provide an update to City Council regarding the Workforce
Analysis as required by the State Auditor Corrective
Action Plan Item #6.
RECOMMENDED ACTION:
RECEIVE a report from Raftelis regarding an update on
the Workforce Analysis – Human Resources Department
(Nickie Mastay/Sharrone Taylor 510-620-6606). This item was continued from the February 6, 2024, meeting.
DISCUSSION:
Rafetlis provided a PowerPoint to provide an update regarding the Workforce Analysis.
DOCUMENTS ATTACHED:
Attachment 1 - Raftelis PowerPoint
AGENDA
REPORT
City of
Richmond
Workforce Analysis:
Status Update and Overview
February 20, 2024
Photo courtesy of Benjamin Garcia (cropped - Flickr)
1. State Audit Recommendations
2. Overview of Workforce Analysis
3. Project Scope and Timeline
4. Citywide Staffing Overview
5. Workload vs. Work Planning
6. Prioritization
7. Preliminary Recommendations
8. Next Steps
2 Agenda
3 State Audit
• On April 4, 2022, the City of Richmond was notified by the State Auditor that they would be conducting an audit of the City as approved by the Joint Legislative Audit Committee on June 30, 2021.
• The State Auditor’s local audit program identifies and supports local government agencies that might be at high risk based upon analysis of a City’s audited financial statements. Richmond’s risk assessment began in February 2021 based upon the City’s June 2020 financial statements.
• The audit formalized eleven (11) recommendations to the City. The 6 th
recommendation pertained to conducting a workforce analysis to mitigate the costs of increasing salaries. The City should perform a workforce analysis by June 2024. • Based on the results of the analysis, the State recommended that the City Council should consider eliminating vacant positions that it deems no longer necessary.
Additionally, the City should assess its need for each vacant position before it seeks to fill the positions and eliminate any positions that it does not need. 4 Affordability Analysis in Progress
• Comfortable with 650 FTEs maximum until Workforce Analysis is completed
• Total of 753 budgeted FTEs for FY2024, of which 607 are General Fund
• FY2023-24 vacancy factor of 6% / $11.2M included in the adopted budget, which equates to 40 FTE
› $11.2M / $279,927 = 40 FTE
5 Overview
The City entered to a contract with Raftelis in May 2023 to conduct a Workforce Analysis. The purpose of the Workforce Analyst was to:
• Reassess the Size of the City Staff: Meet with Department Directors via the City Manager and Human Resources Director to assess staffing needs to determine if the department needs fewer additional staff than their vacancies would suggest. • Succession Planning and Vacancies: The City would like to take a measured approach to filling vacancies. By taking a measured approach to filling vacancies, this will allow the City time to determine whether any departments, including Police and Fire, should or could operate with a smaller staff. While taking a measured approach to filling vacancies there needs to be an analysis of potential retirements to determine proper succession planning.
• Department Analysis: Facilitate a variety of meetings between/among Department Directors to determine current workflow with the current staff in each division of each department to determine if the department is operating at optimum accuracy and efficiency. Produce a written document that summarizes this analysis with recommendations on workflow and staffing.
6 Project Scope
and Timeline
Project
Scope
7 • Reassess the size of City staff and
determine if vacant positions are needed
• Review succession planning and
recommend improvements
• Analyze department operations and
recommend improvements to workflow and
efficiency
8 BEGIN AND MANAGE
ENGAGEMENT
UNDERSTAND
CONTEXT
ANALYZE
STAFFING
PREPARE
PRELIMINARY
OBSERVATIONS &
RECOMMENDATIONS
PREPARE PROJECT
REPORT
Major Activities
• Hold kick-off
meeting
• Collect data and
documents
• Provide regular
status updates
Major Activities
• Interview City Council
• Meet with City
Directors
• Interview key staff
• Document key
processes
• Review documentation
• Prepare Service Level
Matrix
Major Activities
• Analyze staffing levels
• Develop succession
planning criteria
• Identify efficiency
opportunities
Major Activities
• Prepare preliminary
observations and
recommendations
• Conduct follow-up
research
Major Activities
• Update presentation to
City Council
• Prepare draft report
• Draft report reviewed
with City staff and
bargaining units
• Final report
presentation to City
Council
August - Conclusion September - October October - December November – January January - March Project Timeline
9 Raftelis’ Analysis
• High-level Citywide review; not scoped to do deep-dive in each department • City has limited data to inform workload and resourcing • Difficult to determine whether service level expectations are impacted most by vacancies, resource constraints, or both
• Raftelis’ approach leveraged our industry knowledge layered upon information from staff interviews, documents, and available data Proposed Report Outline
• Citywide Staffing Overview
› Vacancies
› Overtime
› Response to State Auditor
• For each Department, we will show:
› Staffing Level History
› Core Service Matrix showing programs breakdown and staffing levels › Key Observations
› Staffing Recommendations
› Operational Recommendations
10 11
Citywide
Staffing Overview
12 City Context
0 200
400
600
800
1000
1200
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 Authorized FTEs
Revenue in Millions
City Staffing and Revenue
2005 - Present
GF Revenue (Inflation Adjusted) Authorized FTEs
13 Vacancies
• Average number
of vacancies and
average vacancy
rate by department
or division from
2022-24
Department/Division
Average
FTEs
Vacant
Average
Vacancy
Rate
POLICE 50.0 23.1%
PUBLIC WORKS 18.5 9.2%
FIRE 12.1 12.2%
COMMUNITY SERVICES (Employment & Training) 8.9 37.2%
FINANCE 7.1 17.1%
COMMUNITY DEVELOPMENT 6.7 15.6%
COMMUNITY SERVICES (Library) 6.7 20.8%
COMMUNITY SERVICES (Office of Neighborhood Safety) 6.1 39.3% CITY ATTORNEY'S OFFICE 4.2 27.3%
HUMAN RESOURCES 2.6 19.4%
ECONOMIC DEVELOPMENT (Arts & Culture, Environmental Health, Real Estate, and Port) 2.6 14.0%
COMMUNITY SERVICES (Recreation) 2.5 7.5%
INFORMATION TECHNOLOGY 1.9 8.9%
RICHMOND HOUSING AUTHORITY 1.6 21.7%
RENT CONTROL 1.0 8.0%
CITY MANAGER'S OFFICE 0.9 17.6%
DEPARTMENT OF CHILDREN AND YOUTH 0.7 25.5%
CITY COUNCIL 0.7 9.5%
COMMUNITY SERVICES (Administration, Social Services, and Transportation) 0.3 5.6% MAYOR'S OFFICE - 0.0%
CITY CLERK'S OFFICE - 0.0%
GRAND TOTAL ALL DEPARTMENTS 135.0 17.0%
14 Vacancies
FY24 Authorized
Positions =
753 FTEs
January 2024 Vacancies =
119 positions
(16%)
• The City has been operating at 83% staffing for the past three years • Filling vacancies is a top priority
• Progress made in last year, positions being filled more quickly • Many positive comments about Human Resources improvements 15 Overtime
116,260
138,165 144,209
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2021 2022 2023 (Prorated)
Total Overtime Hours Citywide
288
318 335
-
50 100
150
200
250
300
350
400
2021 2022 2023 (Prorated)
Average Overtime Hours per Employee Citywide
• Average Overtime use from FY21-23 averages to approximately 63.7 FTEs • Almost half of the vacancies
• Top department overtime users:
• Fire Department (61,305 hours or 29.4 FTEs)
• Police Department (57,720 hours or 27.7 FTEs)
• Public Works Parks Division (5,827 hours or 2.8 FTEs) 16 Workload
vs.
Work Planning
Most staff time is already pre-
programmed for day-to-day
operations.
There is limited capacity for
new programs and initiatives.
Mandates
What is the City legally
obligated to do?
Community
What service level
expectations have been
set for residents over
time?
Council Priorities
How is the work of staff
advancing policy
priorities?
City Growth
What is the change in
the population of
customers served?
Workload
Drivers
What drivers increase or change
workload?
18 Work Planning
Process of defining how to
meet City Council goals.
19 Resource
Allocation
Timeline
Development
Task
Identification
20 Prioritization
Priority Setting
• Guidance – with limited financial resources
what should be our focus?
• Policy decision – is it better to do a lot of
things “okay” or focus on fewer things and do
them “really well”?
• Fiscal equity – what is appropriate for
taxpayers to fund versus individual users?
• We recommend starting with specific criteria
against which to rank individual programs and
services to focus the discussion
22 Core Service Level Matrix
• Subjective ranking system to begin to prioritize programs and services › There is no “right” answer
• Raftelis ranked City programs and services using six criteria:
1. Is this service or program mandated at the local, state, or federal level?
2. Is this service or program necessary for life safety?
3. Does this service or program preserve existing City assets or infrastructure?
4. Does this service or program provide direct service to the public?
5. Does this service or program support City Council goals or the strategic plan?
6. How many customers does this program serve?
23 Core Service Levels Matrix Results
Department Ranking
Fire 3.2
Public Works 2.8
Community Development 2.7
Police 2.6
Community Services 2.5
Executive Offices* 2.3
Economic Development 2.1
Internal Services** 1.8
• Raftelis team ranked each
criterion on a scale from 1 (low)
to 5 (high)
• Results slightly atypical; police is
usually at the top
• Impacted by City Council’s
goals
*Executive Offices = City Manager’s Office, Mayor’s Office, City Attorney’s Office, and City Clerk’s Office **Internal Services = Human Resources, Information Technology, and Finance 24 Preliminary
Recommendations
25 Response to the State Auditor
• Current staffing levels do not support current service level expectations › Heavy reliance on overtime to meet certain core services due to vacancy levels – As noted earlier, primarily in Fire, Police, and Public Works • Meeting current service level expectations and Council goals requires additional authorized staff
• To provide best practice service for the current menu of programs and services, the City needs additional positions beyond filling the existing vacancies • Financial analysis is required to determine what level of staffing the City can afford
• Fill vacancies first and then add staff only as ongoing revenue growth can support the positions
• Critical not to use one-time funds for ongoing staff positions Looking Ahead…
• City’s ability to provide service is rooted in two paths:
1. Limited Revenue Growth = Reallocate Existing Resources Improve service quality by prioritizing services and programs and reallocating limited financial resources, or
2. Growing Revenues = Consider Adding New Programs
Address community needs and Council priorities with augmented staffing and outside contractor use
26 Reallocate Existing Resources
• Fill vacancies in core service areas first
› Police, Fire, Public Works
• Increase investment in technology to streamline internal business process efficiency and data to drive decision-making
• Decrease general fund investment in programs serving fewer residents in favor of grants, cost recovery, and non-profit sector • While the City’s unassigned General Fund reserves are increasing, current-period (annual budget) resources remain limited › Some of the increase in reserves may be the result of salary savings and not “real” revenue growth
› Invest in those areas that will pay off in the future 27 Grow Revenues
• Increase investment in economic development to grow future revenues and local job opportunities
• Increase investment in public safety (fire and police) • Increase service levels related to property safety and quality of life issues
• Safety is an economic development investment;
businesses need assurance of safety to settle in a
community
• Increase investment in code enforcement to improve
community safety and aesthetics
28 • Finalize draft report
• Review with staff to ensure
accuracy
• Provide final report by end of March
• Ensure City Council Goals and
Workforce Analysis align
29 Next Steps
Contact:
Rebekka Hosken, Project Manager
818.632.4086 / [email protected]
Thank you!