City of Sacramento
Budget and Audit Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00628 3/26/2024 Discussion Item 2.
Update to the Recommendations in the 2020 Citywide Innovation and Efficiency Assessment File ID: 2024-00628
Location: Citywide
Recommendation: Receive and file.
Contact: Peter Coletto, Finance Director, (916) 808-5416, [email protected]; Mirthala Santizo, Budget Manager, (916) 808-5078, [email protected], Department of Finance Presenter: Peter Coletto, Finance Director, (916) 808-5416, [email protected]; Mirthala Santizo, Budget Manager, (916) 808-5078, [email protected], Department of Finance Attachments:
1-Description/Analysis
2-Updated Responses to the Recommendations in the 2020 Citywide Innovation and Efficiency Assessment
Description/Analysis
Issue Detail:
On March 10, 2020, the City Auditor presented the Citywide Innovation and Efficiency Assessment, Potential Strategies report to City Council for discussion and direction (File ID: 2020-00757). The assessment was conducted by Management Partners, an independent contractor, with two primary objectives: (1) provide an independent assessment of the City’s current and projected near- and medium-term fiscal condition; and (2) identify 10 to 20 opportunities to gain efficiency/cost savings and generate additional revenue, without displacing existing public employees. As a result, the report identified 26 strategies for cost savings with 39 recommendations for City operations. The City Manager provided a response to the 39 recommendations with the City Auditor’s report.
The City Manager has provided an update to the 2020 responses. Attached are the 2024 updates (Attachment 2).
Policy Considerations: This report provides Council with updates to the recommendations identified in the 2020 Citywide Innovation and Efficiency Assessment, which could be used by Council to
File ID: 2024-00628 3/26/2024 Discussion Item 2.
provide future policy direction.
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): This report concerns administrative activities and government fiscal activities that do not constitute a “project” as defined by the CEQA Guidelines sections 15378 and California Public Resources Code section 21080 and are not subject to the provisions of CEQA (CEQA Guidelines section 15060(c)(3)). CEQA review for any project, which utilizes funds allocated in this report, has been or will be performed in conjunction with planning, design, and approval of each specific project as appropriate.
Sustainability: Not applicable.
Rationale for Recommendation: This report is for informational purposes.
Financial Considerations: Any future policy direction from Council could have fiscal impact, which would require further analysis.
Local Business Enterprise (LBE): No goods or services are being purchased under this report.
Attachment 2
Updated Responses to the Recommendations in the 2020 Citywide Innovation and Efficiency Assessment
Recommendation 1 - Create an innovation strategy to guide internal and external initiatives, drawing from the more developed similar programs in Denver and Phoenix.
2020 Response: The City Manager’s Office supports this recommendation. The City is a leader in innovative initiatives and partnerships. There are many examples of award-winning innovations like Streamline Sacramento, Front Street Animal Shelter, Electrify America, Parking Modernization, 5G Wireless, 311Call Center, Inclusive Economic Development, as well as many more internal efficiency programs. However, the City also recognizes continued opportunity for growth and formalization of the innovation program. The City is currently in the planning stages of updating the city’s Digital Strategy that will include an innovation component with a focus on formalizing innovation culture and measuring innovation successes. 2024 Update: This recommendation has been implemented. The City Manager’s Office continues to support small businesses and workforce development partners, enhancing our reach into the community through the Community Engagement Team’s Community Ambassador Program and City Management Academy, lowering barriers for housing development and partnering with UC Davis on the development of Aggie Square, an innovation hub for research programs, private industry partners, classrooms, housing and community programs.
Recommendation 2 - Prepare and submit a local ballot measure to modernize the Business Operations Tax.
2020 Response: The Finance Department has continued to recommend this strategy and supports this recommendation.
2024 Update: This recommendation has been implemented. Council placed a Business Operation Tax ballot measure, Measure C, on the March 2024 ballot.
Recommendation 3 - Convert three positions within the Police Department Digital Forensic Unit (DFU) from sworn to non-sworn positions.
2020 Response: The Police Department does not support this recommendation. DFU requires investigative experience and the ability to look at, retrieve and investigate highly classified material for criminal misconduct. Investigators must also testify in court and conduct investigations as a sworn officer.
2024 Update: This recommendation is in process. The Police Department is analyzing the ability of converting one of the three employees being a professional staff (non-sworn/civilian).
DFU requires investigative experience and the ability to look at, retrieve and investigate highly classified material for criminal misconduct. Investigators must also testify in court and conduct investigations as sworn officers. The professional staff employee could perform more of the required analytical work/duties.
Recommendation 4 - Convert the Police Volunteer Coordinator position to a non- sworn position.
2020 Response: This recommendation has been implemented. The sworn full-time employee has been transferred to the Outreach and Engagement Division. The duties of the Police Volunteer Coordinator have been transferred to professional staff (non-sworn) employee. 2024 Update: This recommendation has been implemented.
Recommendation 5 - Conduct an audit of current Police Department administrative duties to determine the non-sworn duties that can be consolidated and civilianized.
2020 Response: The Sacramento Police Department supports this recommendation. However, this recommendation is specific to the Police Training Unit. The Academy, Field Training, and In- Service Training units are staffed by both sworn and civilian personnel subject matter experts responsible for managing the unit and delivering and coordinating training. Generally, training specific to sworn employees is provided by sworn employees and civilian training is delivered by civilian personnel, although some courses are interchangeable. There is a recognized benefit to having sworn officers train sworn and vice versa with civilians as they are most knowledgeable about certain aspects of the job.
2024 Update: This recommendation has been implemented.
Recommendation 6 - Convert the Fire Public Information Officer and two IT positions to non-sworn positions.
2020 Response: The Fire Department believes that it is necessary to have a subject matter expert on fire and emergency incidents (like the Police Department structure). The department does not currently have a budgeted sworn Public Information Officer. However, a Captain currently is serving in this capacity.
The Fire Department believes that it is necessary to have a subject matter expert in the IT Captain position as this position requires operational knowledge. Currently, the Department has one sworn IT Captain position. This was reduced from two IT positions in 2016. The IT Captain is the Computer Aided Dispatch coordinator, which handles verification of response files and run zones, represents the Department at regional meetings with their peers, is the communications supervisor for all field communications, and is tasked with managing and project tasking all day- to-day repairs of in service field units.
2024 Update: The City does not support this recommendation. The Fire Department believes that it is necessary to have a subject matter expert on fire and emergency incidents (like the Police Department structure). The department does not currently have a budgeted sworn Public Information Officer. However, a Captain is serving in this capacity. This Captain coordinates advising Councilmembers and community members during critical incidents as well as coordinates the response to all media outlets. This allows for first responders to continue their work while keeping community stakeholders advised of these emergencies and other non- emergency events in the community.
Recommendation 7 - Conduct an internal audit of current Fire administrative duties to identify non-sworn duties that can be consolidated and civilianized in the future.
2020 Response: The Fire Department supports this recommendation and is continually analyzing its staffing models to identify efficiencies. As efficiencies are identified, we are required to work with our local bargaining units to implement. 2024 Update: This recommendation has been implemented.
Recommendation 8 - Establish a cross-functional team including Public Safety, Information Technology and Finance staff to create a dashboard, monitor and provide guidance to all departments regarding methods to manage overtime. 2020 Response: The Finance Department, Fire Department, Sacramento Police Department and Information Technology Department support this recommendation. However, SPD does maintain significant controls over overtime, including management of overtime policies and reporting procedures. This recommendation, while helpful, does not address the driving factors of overtime or the requirement that the Department provide certain services irrespective of staffing levels.
2024 Update: The City does not support this recommendation. Departments continue to utilize data and operational prioritization to manage overtime. This recommendation does not address the understaffing that is the root cause of overtime.
In addition to managing overtime policies and reporting procedures, departments actively maintain significant controls over overtime. The recommendation, although helpful, does not address the factors driving overtime or the requirement that certain services be provided regardless of staffing levels. Certain services, such as emergency response and public safety, must be provided regardless of staffing levels. This means that even during times of limited resources or high overtime, these critical services cannot be compromised. It is important to find a balance between managing overtime and ensuring that essential services are adequately staffed and available to the community.
Recommendation 9 - Develop a process to continually review utility billing to reduce errors, maximize collections, and improve data quality and accuracy of utility billing.
2020 Response: The Department of Utilities (DOU) supports this recommendation and has recently updated the utility review process as part of a billing system upgrade:
1. As mentioned in the report, DOU’s billing system was audited in 2012 and all recommendations were implemented.
2. A significant upgrade of the billing system was completed in May 2019, which corrected many of the challenges with the previous billing system and initiated a utility billing review process. It would be appropriate to operate under the new system for at least two to three years then evaluate timing of a subsequent comprehensive audit.
3. To further assist, the City Auditor has developed a risk-based audit priority list for the department. Although a billing audit does not currently rank high, this could change over the next few years as we operate the new system and challenges arise. 2024 Update: This recommendation has been implemented. As background, the City’s Customer Information System (CIS), was audited by the City Auditor Office in 2012. All recommendations were implemented manually by running queries and tracking through spreadsheets separately. CIS was upgraded to a new version called Customer Care & Billing (CCB) in 2019. CCB has many built in functionalities to automate auditing for billing errors with system generated daily and monthly audits on customer accounts, create (To Do) billing tasks to review and validate any account and make the necessary changes or updates to ensure accurate billing. In addition to the CCB upgrade, a bill proofing manager process was implemented to review monthly bills that generate above a set billing amount to improve data quality and accuracy. To maximize collection efforts, a DOU Claim Collector position was added to Account Management to further help with the collection of internal and external customer accounts.
Recommendation 10 - Conduct a third-party audit of utility invoices received by the City.
2020 Response: The Department of Utilities supports this recommendation. As background, the City has various practices and efforts related to auditing of utility invoices received. The City has over 1,800 energy accounts for municipal electricity and natural gas consumption. Currently, staff monitors and tracks energy use at a high level using the city’s energy management system, EnergyCAP , which is used in part for auditing of billing information. Additionally, an audit of the City’s green efforts is currently underway, which includes analysis of streetlight data and billing, and may recommend process improvements.
2024 Update: This recommendation is in the process of being implemented. The Department of Utilities will initiate a procurement process to hire a third-party auditor to evaluate City utility accounts to check for billing errors.
The City has over 2,000 energy accounts for municipal electricity and natural gas consumption of which approximately 200 are assigned to DOU. DOU has engaged in internal auditing efforts and corrections were applied to the processing of current electric bills to ensure compliance with Proposition 218. Also, there have been prior analyses performed that were focused on the economic impacts of DOU’s participation in renewable energy programs and cost-reduction schemes (e.g. the SolarShares program). It is a goal of the energy program to assess the merits of such participation in the future. Finally, it is a current goal to analyze all DOU SMUD accounts to ensure they are being charged to the correct fund. The EnergyCAP software application is used to process and review bills on a weekly basis and the software has internal triggers to raise a flag for accounts that warrant additional examination (e.g. energy consumption higher than average or bill amount higher than average will trigger a flag). Billing information is provided electronically to the City directly from the utility.
Recommendation 11 - Implement a business operations tax amnesty program and explore additional tax/fee compliance opportunities based on results. 2020 Response: The Finance Department does not support this recommendation. The department currently contracts with Avenu Insights & Analytics (AI&A) for business operations tax (BOT) compliance. We are currently working to cross check businesses on our vendor payment list with businesses that have City BOTs to determine compliance. Additionally, AI&A cross checks businesses reporting sales tax with our BOT list.
The department currently works with businesses that are out of compliance by waiving late penalties and offering the business a payment plan to allow them the opportunity to come into compliance. Given the current efforts underway, we are moving businesses to compliance and receiving backpay for unreported taxes. As such, the department does not believe that an amnesty program will result in significant savings and may result in a loss to the City. 2024 Update: The City does not support this recommendation. Implementation of an amnesty program will result in a reduction of General Fund revenues and worsen the projected budget deficit. Measure C contained provisions to allow Council to set fines and penalties to incentive willfully bad actors into compliance.
Recommendation 12 - Conduct a street damage restoration and recovery study to ensure that the excavation cost recovery fee captures all related pavement life cycle costs.
2020 Response: The Department of Public Works supports this recommendation and has already initiated development of a scope of work for a pavement cut fee study to evaluate appropriate fees and a moratorium policy for pavement cuts on new street construction and recently resurfaced streets. The goal is to bring a proposal forward for City Council adoption by the end of calendar year 2020.
2024 Update: This recommendation is partially implemented. The Department of Public Works publishes a Pavement Conditions Report that assesses and reports on the conditions of pavement on all its streets every two years. The Department commissioned a consultant study to examine options for its pavement cut fee (also known as trench cut fee). The preliminary outcome of that study, which included comparisons with programs in other communities, suggested that it would be more cost-effective to mandate contractors to perform more comprehensive repairs instead of paying a fee to mitigate the damage. As a result, the Department is exploring specific pavement restoration requirements instead of fee payment for trenching in City streets. Additionally, the Department is embarking on a discussion of a regional approach with an existing regional pavement management working group comprising various agencies in Sacramento County.
Recommendation 13 - Establish a moratorium of five years on pavement cuts following new street construction or major resurfacing projects. 2020 Response: The Department of Public Works supports a moratorium but will refrain from establishing a timeframe until we have completed our pavement cut fee study to evaluate appropriate fees and a moratorium policy for pavement cuts on new street construction and recently resurfaced streets. The goal is to bring a proposal forward for City Council adoption by the end of calendar year 2020.
2024 Update: This recommendation is in the process of being implemented. The Department of Public Works recently initiated the first steps to bring forward an ordinance for City Council consideration to establish a five-year moratorium after City resurfacing efforts that would apply to utilities and other entities for pavement cuts.
Recommendation 14 - Automate human resource and other support service processes and workflows to streamline tasks and eliminate manual systems. 2020 Response: The Finance, Human Resources and Information Technology Departments support this recommendation and have already automated new hire and rehire transactions, which are the most labor-intensive transactions. The departments will continue to work together to automate all additional transaction types.
2024 Update: This recommendation has been implemented. The Finance, Human Resources and Information Technology Departments have implemented numerous process improvements including automations of parts of the budget process, payroll service, procurement, and revenue divisions and automated more than 14 types of systems and transactions, which are some of the most labor-intensive business processes including Hire/Re- hires, Transfers, Promotions, Separations, Direct Deposit Changes, Additional Pay, Annual Sick Leave Payoffs, and Payroll enhancements. In addition, IT implemented a new citywide Cashiering System and migrated centralized planning, budgeting, and forecasting solutions (Hyperion) to Cloud for better performance and user experience. The departments will continue to work together to digitalize and streamline business processes.
Recommendation 15 - Prioritize the program areas and select at least two managed competition candidate projects to analyze in-depth annually for the next several years.
2020 Response: The City Manager’ Office supports the further evaluation of whether managed competition is a viable strategy. This strategy will require discussion with labor unions prior to implementation as it has a potential to impact our unionized workforce. 2024 Update: The City does not support this recommendation. The City Manager’s Office has determined that no further evaluation of managed competition as a viable strategy to reduce costs is necessary given the current cost structure of city employees’ salaries and benefits as compared to that of private industry with whom they would be competing. Analysis of the areas in which managed competition could have been applied including garbage services, street, park and tree maintenance indicate that any type of managed competition would require negotiations to reduce employee salaries and benefits to be competitive. Given current Council direction relative to these cost points, staff believes that this strategy will not be an effective tool to reduce costs as part of our labor negotiations efforts to reduce costs.
Further reflection on the original recommendations and recent research demonstrates that this was an older strategy that has not been deployed successfully in the recent past. And, when used at all, was in much larger cities with substantially larger population and employee counts.
Recommendation 16 - Expand market-based parking meter fees and enforcement to Sundays.
2020 Response: The Department of Public Works supports this recommendation. The Parking Services Division has initiated a study that is currently evaluating the needs of the overall parking system including parking and mobility enhancements. This will include an initial review of expanding market-based parking meter fees and enforcement to Sundays. 2024 Update: This recommendation is in process and may be considered as part of the Fiscal Year (FY) 2024/25 of FY 2025/26 Budgets. The Department of Public Works supports this recommendation. The Parking Services Division is currently evaluating the needs of the overall parking system including parking and mobility enhancements. This will include an initial review of expanding market-based parking meter fees and enforcement to Sundays.
Recommendation 17. Develop guidelines to determine when it is most advantageous to use Design-Build and similar public contracting methods to streamline capital project planning/ construction, align with existing strategic partnership initiatives and reduce overall infrastructure costs. 2020 Response: The City Manager’s Office supports this recommendation to develop guidelines for public contracting methods for capital projects to ensure the best contracting method is used.
Historically, the City has used various contracting methods including Design-Bid-Build, Design- Build (DB) and Design-Assist (DA). The DA contracts were also chosen to proceed with construction contracts using the Construction Management at Risk (CMAR) method. Some recent DB examples include Meadowview Navigation Center, Sam & Bonnie Pannell Community Center HVAC Control Replacement, and Energy Efficiency Retrofit Phase II. Some DA and CMAR examples include the North Natomas Community Center and Aquatic Complex, Memorial Auditorium Renovation, Sacramento Convention Center Renovation and Expansion, and Community Center Theater Renovation.
The Department of Utilities (DOU) is using an alternative procurement method, Multiple Award Task Order Contract (MATOC), for the ongoing Accelerated Water Meter Program (AWMP), which is a best-value contractor selection process based on qualifications, performance, and pricing. The process includes Request for Qualifications, Requests for Proposals, Council approval of a Master List of pre-qualified contractors and award of Task Order contracts. DOU has used a similar process to bid the McKinley Vault and 3rd Street Sewer Upsizing projects. 2024 Update: This recommendation has been implemented. The City has extensive experience with Design Build as well as other alternative delivery methods. Alternative delivery has evolved substantially since this recommendation was originally made in 2010 and Sacramento, like many other Cities, has embraced and normalized alternative delivery when appropriate on CIP’s.
Recommendation 18. Identify one or two functional areas to begin gainsharing implementation.
2020 Response: The City Manager’s Office will further evaluate whether gainsharing is a viable strategy.
2024 Update: The City does not support this recommendation. The value of specified gains resulting from employee recommendations or ideas are not easily quantified nor easily attributable. City employee incentives to utilize alternative working times and conditions are subject to negotiation and limiting implementation to only certain workgroups could be problematic to program or service delivery.
Recommendation 19. Determine departments or functional areas suitable for gainsharing.
2020 Response: The City Manager’s Office will further evaluate whether gainsharing is a viable strategy.
2024 Update: The City does not support this recommendation. Please see the response to Recommendation 18 for more detail.
Recommendation 20. Initiate discussions with labor associations affiliated with the identified departments or functional areas.
2020 Response: If after evaluation gainsharing appears viable, the Human Resources Department will initiate discussions with appropriate labor unions. 2024 Update: The City does not support this recommendation. Please see the response to Recommendation 18 for more detail.
Recommendation 21. Issue a request for proposals (RFP) to obtain competitive proposals for solid waste collection and recycling services. 2020 Response: The City Manager’s Office supports further evaluation and analysis prior to issuing a request for competitive proposals. It is important to recognize that an evaluation and contracting for these services is a multiyear process and will require discussion with labor unions as it will impact our unionized workforce.
The Department of Public Works is currently evaluating solid waste and recycling services, rates, and opportunities to reduce costs and improve service. Although these services rank high in the latest Community Survey, the department recognizes that the industry and State regulations and requirements continue to change requiring innovative solutions to improve services while being cost effective.
2024 Update: This recommendation requires Council direction or action. If desired, the Department of Public Works could hire a consultant to conduct further evaluation and analysis of privatizing solid waste services. The current cost is estimated to be $250,000. Please note that privatizing municipal solid waste services would involve a highly visible, multi-year process requiring input from stakeholders, including the Utilities Rate Advisory Commission (URAC) and various labor unions. Other factors include funding ongoing City liabilities like landfill post- closure expenses, managing long-term disposal agreements, expanding compliance oversight for residential operations, the ongoing franchise fee that would support General Fund revenues, one-time revenues from selling assets, and the savings associated with the avoidance of new pension obligations.
The Department of Public Works continues its assessment of solid waste and recycling services, rates, and opportunities for cost reduction and service enhancement. In January 2022, the City approved rate adjustments to address anticipated costs, particularly those related to organic waste collection and processing mandated by Senate Bill 1383, while also maintaining a prudent reserve. These approved rates are in line with regional standards. It's noteworthy that the City provides a higher level of service compared to many other jurisdictions, including services such as leaf season collection, two annual household junk pickups, two appliance and e-waste pickups, and a dump coupon.
Recommendation 22. Conduct a re-routing exercise to balance routes, workload, and tonnage on a periodic basis.
2020 Response: The Department of Public Works supports this recommendation and is part of the department’s ongoing management practices. The last re-route study was completed in 2017. A new re-route study will take place in 2020 to right size routes which have become out of balance with much of the new development that has recently occurred in the City.
As noted above, the department is reviewing opportunities to improve services while being cost effective and periodic re-routing is a best practice that the city will continue to implement. As part of the proposed re-route study, an evaluation will be done to consider transitioning from a 4- 10 work schedule in favor of a 5-8 schedule in order to improve efficiency. 2024 Update: This recommendation has been implemented. The last re-route study was completed and implemented in February 2021 and included the efficiencies of shifting from a 4- 10 work schedule to a 5-8 schedule. A new re-route study is in the initial planning stages to right-size routes as they become unbalanced due to development throughout the city.
The department is continuously reviewing opportunities to improve services while being cost effective and periodic re-routing is a best practice that the city will continue to implement.
Recommendation 23. Utilize Global Positioning System (GPS) to monitor efficiency of refuse collection trucks.
2020 Response: The Department of Public Works supports this recommendation. In fact, the department is currently evaluating a proposal to pilot innovations, to monitor and improve efficiency, such as real time GPS route management, widespread radio frequency identification deployment, and truck mounted pavement assessment equipment. 2024 Update: This recommendation has been implemented. The City implemented a new GPS tracking software for all City vehicles called Samsara. Additional ways to utilize non-GPS technology to monitor efficiency for Recycling and Solid Waste – such as arm lifts & tonnage – are being evaluated. The department has also evaluated proposals to pilot innovations, to monitor and improve efficiency, such as real time GPS route management, widespread radio frequency identification deployment, and truck mounted pavement assessment equipment. The department is committed to evaluating solutions for technology in refuse trucks to automate processes and improve and monitor efficiency.
Recommendation 24 - Adjust life cycle intervals to align with more common government fleet cycles.
2020 Response: The Department of Public Works Fleet Management Division supports this recommendation and has already initiated an effort to better reflect life cycle intervals using best practices.
2024 Update: This recommendation has been implemented. The Department of Public Works Fleet Management Division has adjusted its replacement model to look solely at life expectancy. When there are multiple vehicles with the same life expectancy, they are reviewed by fund, department and dept ID level. After that information is reviewed, if there are multiple vehicles or more vehicles than can be replaced via fund, department and dept ID, the highest maintenance cost would determine which vehicle(s) would be replaced first. This will allow the Fleet Division to replace the vehicles which have been in the fleet for the longest time which almost always have the highest maintenance costs. Fleet Management replaces most vehicles and equipment with this methodology.
Recommendation 25 - Incorporate salvage value, auction fees, and make-ready costs into future fleet replacement costs.
2020 Response: The Department of Public Works, Fleet Management Division will evaluate the recommendations relative to salvage value and auction fees, however, these are subject to real- time market conditions at the time of disposal and can vary significantly. The department already includes make-ready costs into the fleet replacement budget. 2024 Update: The City disagrees with this recommendation. The Department of Public Works, Fleet Management Division analyzed adding the salvage value and auction fees into the replacement cost of vehicles and equipment and determined that it would not be effective to add either of these values. First, purchase prices could be shortened by deducting the full salvage values into new vehicle purchases, as the City does not typically realize full salvage value at auction. Additionally, salvage values and therefore auction fees (3% of the actual selling price) have been very volatile over the last few years with the vehicle and manufacturing crisis that has been occurring. The unpredictability of these costs due to economic factors would create difficulty in reliable estimation of the replacement budgets for vehicles and equipment if these were factored in. Note that all funds received through salvage (less auction fees) are returned to the fund balance where the vehicle was purchased, making that funding available to be used for future vehicle replacements.
Make-ready costs are included in the replacement estimate for all replacement and newly purchased vehicles and equipment.
Recommendation 26 - Develop a dedicated internal service fund that supports future fleet replacements.
2020 Response: The City has already established an internal service fund for the operation, maintenance and replacement of its fleet. Further, funding for annual fleet operations is centralized and departments do not have to “budget” for fleet replacement, rather funding is included in the annual budget to replace vehicles based on established replacement criteria. It is important to note that the City actually has a hybrid funding model, whereby investments in our large apparatus including fire and solid waste vehicles are included in the City’s five-year capital improvement program and funds are set aside in advance for these purchases. While it is our goal to fund all replacements in advance of end of useful life, this is not financially feasible at this time.
2024 Update: This recommendation has been implemented.
Recommendation 27 - Develop a comprehensive and accountable chargeback system that supports the fleet replacement fund.
2020 Response: The Public Works and Finance Departments do not support this recommendation as outlined above in recommendation 26.
2024 Update: This recommendation has been implemented.
Recommendation 28 - Complete a comprehensive inventory of Citywide infrastructure assets that includes condition assessments and priority levels for maintaining/replacing. 2020 Response: The City Manager’s Office supports this recommendation. The City has documented inventories for most of its infrastructure including pools, parks, street lighting, traffic signals, bridges, pavement, traffic signs, pavement markings, parking meters, facilities, floodgates, drinking water, wastewater, and storm drainage. Yet not all have condition assessments and priority levels for maintaining/replacing. The report noted that the City has detailed infrastructure studies for some areas (pavement, facilities, parks, swimming pools) that identify over $484 million of deferred maintenance needs. The Department of Utilities has also identified at least $248 million in drainage system deferred maintenance. Further evaluation is needed to identify other areas that may require a comprehensive inventory and detailed study. 2024 Update: This recommendation is in process. The City supports facility condition assessments being included in the capital planning process. The Finance Department is incorporating unfunded capital needs in the Capital Improvement Plan and supports efforts to make the information in the CIP as accurate as possible.
The Department of Utilities Asset Management section is working to implement a comprehensive Asset Management Program for the water, wastewater and storm drainage systems.
1. Asset Management (AM) Program recently developed a 5-year Strategic Asset Management Plan (SAMP).
2. SAMP Initiative #2 is in progress as we work towards establishing clear and standardized asset classifications, definitions, and attributes, and revise our asset layers and attribute information in our Geographic Information System (GIS) using these determined standards. This will provide us with a strong foundation for continuing to collect and manage asset inventory.
3. Many individual asset inventory projects have been completed or are in progress to collect, validate, and record asset information. Processes are being put into place to ensure that data on all new assets is collected and recorded, so that we can focus our efforts on older assets with less data.
4. Condition assessments are being performed as funding and staffing resources allow.
5. Risk assessments, including criticality, condition, risk scores, repair vs. replacement decision criteria, and project prioritization methodology have only been fully established for pipe mains. We will continue to work on risk scoring matrixes and action criteria for additional asset classifications.
Recommendation 29 - Develop a comprehensive asset management system based on best practices to plan and budget for the maintenance and replacement of City infrastructure assets.
2020 Response: The City Manager’s Office supports this recommendation. As noted in the report, the City does have studies identifying deferred maintenance needs (pavement, facilities, parks, pools) of over $484 million yet it does not account for all the City’s infrastructure needs.
The Department of Utilities has identified at least $248 million in drainage system deferred maintenance. There are other asset management systems (traffic signs, pavement markings, streetlights, water, wastewater, and others) in use, beyond those listed in the report. The Department of Utilities is in the process of identifying and categorizing all assets and working on finalizing risk models to develop rehabilitation plans for all three water systems. Further evaluation is needed to determine the feasibility and cost of developing a comprehensive asset management system for the maintenance and replacement of the City’s infrastructure. 2024 Update: This recommendation is partially implemented and in process of being fully implemented. The Fiscal Year 2024/25 5-Year Capital Improvement Plan will include unfunded capital and maintenance costs which will establish baseline needs and allow for effective capital planning and budgeting.
The Department of Utilities Asset Management section is working to implement a comprehensive Asset Management Program for the water, wastewater and storm drainage systems.
1. Asset Management (AM) Program recently developed a 5-year Strategic Asset Management Plan (SAMP).
2. SAMP Initiative #1 is in progress as we work to develop guidance documents for the program that comply with AM Standards outlined in the ISO 55000, 55001, 55002, and 55010 documents. Current work under this initiative is the development of a Water System Asset Management Plan. System plans for Wastewater and Storm Drainage will follow. These system plans will outline best practices and all methodology used for asset management functions including condition assessment, repair and replacement, and project prioritization.
3. SAMP Initiative #2 is also underway as we work towards establishing clear and standardized asset classifications, definitions, and attributes, and revise our asset layers and attribute information in our Geographic Information System (GIS) using these determined standards. This will provide us with a strong foundation for continuing to collect and manage asset inventory.
Recommendation 30 - Expand and accelerate strategies to implement green infrastructure.
2020 Response: The Department of Utilities supports this recommendation. As noted in the report, the City already has several great examples of advancing green infrastructure through development of Stormwater Quality standards and recently completed projects. The department will continue to explore strategies to continue to implement green infrastructure toward meaningful environmental benefits and as part of a long-term cost-management strategy. 2024 Update: This recommendation is partially implemented. The City has advanced green infrastructure through the implementation of the Stormwater Quality Design Manual. The City has successfully funded green infrastructure projects through grant opportunities, such as the 2023 funded Clean California projects.
For the Combined Sewer System, the City initiated the planning for a City of Sacramento Combined Sewer Green Infrastructure Pilot Program. As part of this effort, a green infrastructure location screening was completed, providing a good starting point for selecting conceptual project sites suited to green infrastructure implementation. The City's green infrastructure approach is currently under review as part of the Combined Sewer System Long Term Control Plan Update, aiming to inform the recommendations for the next steps in green infrastructure implementation.
Recommendation 31 - Conduct periodic audits of hiring and training outcomes for the Community Workforce Training Program and report the findings to the City Council.
2020 Response: The City Manager’s Office supports this recommendation. Currently, outcomes are monitored on a monthly basis. It is anticipated that a report will be provided to the City Council in Spring 2020.
2024 Update: This recommendation is in process. A consultant has been hired to provide continuous monitoring of hiring trends and how these tracks with CTWA goals. The City receives monthly reporting on every Capital Improvement Project that is subject to the CWTA.
Recommendation 32 - Explore opportunities to monetize sewer and stormwater assets with telecommunications utilities.
2020 Response: The Department of Utilities supports this recommendation yet agrees with the report that achievability is low. Some initial challenges that would need to be reviewed include:
1. Wastewater lines are a corrosive environment and would not be suitable for telecommunications infrastructure.
2. Concern that the presence of telecommunications infrastructure in wastewater, or storm drainage lines would hinder the City’s ability to maintain the lines. Maintenance includes high pressure water jetting, root cutting, root killing herbicide.
3. Concern that there may be some liability for the City if the facilities was damaged.
4. Future rehabilitation/replacement would incur extra costs and likely require additional time to complete if telecommunication conduits were located in the City’s mains.
2024 Update: The City does not support this recommendation and recommends terminating existing agreements with private telecommunication providers at all Department of Utilities (DOU)-owned facilities, having telecom providers remove existing equipment from DOU owned facilities and exempting DOU facilities for future siting of telecommunications facilities.
DOU has offered to work with Telecommunications service providers to identify alternative locations for their equipment. An internal DOU policy was developed to justify these recommendations. The challenges stated in the 2020 response are still considered obstacles for locating telecommunications infrastructure within underground wastewater and storm drainage pipelines.
Recommendation 33 - Prepare an analysis of unfilled positions to identify opportunities to eliminate budgeted positions and implement dynamic staffing models.
2020 Response: The Finance and Human Resources Departments support this recommendation. As a matter of practice, positions are continuously evaluated in the context of availability of funds against the needs and demands of our operating departments to deliver programs and services and adjusts accordingly. Many positions that are vacant now are due to the extremely tight labor market. It is difficult in a rules-driven employment process to quickly and efficiently fill positions.
In addition, it is important to note that the 376 career vacancies (as of March 27, 2019) identified on page 141 of the report did not account for positions that had been alternately filled (position held vacant while non-budgeted position was filled) and that many of the identified positions outside of sworn safety positions are tied to required reimbursements/revenue activities.
Consequently, elimination of these positions will not result in savings. Also, of the 376 identified in the report, 149.5 are safety recruits or sworn safety positions. Elimination of the safety positions would significantly affect service levels in both the Police and Fire Departments.
As of February 25, 2020, there are 197 career vacancies. Currently, 99 positions have been filled or in active recruitment, 79.3 positions held vacant are associated with reimbursements/revenues leaving a net 2.5 positions that could be eliminated, creating savings. 2024 Update: This recommendation has been implemented and the process of reviewing every position – including vacancies – is part of the annual budget process. The Finance Department also reviews vacancy assumptions as part of the budget process.
Recommendation 34 - Allow departments to use part-time and contract staffing models to provide greater flexibility in meeting service demands and maximizing cost effectiveness.
2020 Response: The Human Resources Department supports this recommendation. The City will work within the limits of negotiation requirements and the law to provide as much flexibility as possible relative to flexible staffing. In addition, keeping in mind the legislation that went into effect January 1, AB5, which dictates who can be classified as a contractor. 2024 Update: This recommendation has been implemented. The City utilizes contract staffing models where necessary to maintain service levels or provide services that City staff cannot and should not provide. Council action to bring these services ‘in house’ would result in higher costs to the General Fund and/or reduced service levels.
Recommendation 35 - Change overtime calculation practices to be fully consistent with Federal law.
2020 Response: The Human Resources Department supports this recommendation. The City has made improvements to the overtime calculation by excluding sick leave from the calculation. This will remain on the list for negotiations for all units. 2024 Update: This recommendation has been implemented.
Recommendation 36 - Conduct a program-by-program review to determine which non-essential services should be continued and how the level of General Fund support can be reduced or eliminated.
2020 Response: The Finance Department supports this recommendation and works with departments annually to align department budgets with program/service level needs. There is a complete inventory, Program Oriented Development, tied to the budget for all programs/services provided and the resources (positions and dollars) required to run these programs/services.
Prior policy decisions have been to continue funding these programs/services. 2024 Update: This recommendation has been implemented. The Finance Department works with all City departments annually to align department budgets with program/service level needs. There is a complete inventory, Program Oriented Development (https://www.cityofsacramento.gov/content/dam/portal/finance/Budget/approved-24/FY2023-24- Program-Oriented-Development_POD_v2.pdf), tied to the budget for all programs/services provided and the resources (positions and dollars) required to run these programs/services.
Prior policy decisions have been to continue funding these programs/services. The Finance Department also works with other departments to ensure the use of funding sources is prioritized by using the more restrictive funding sources first, in line with best practice.
Recommendation 37 - Establish a paramedic/ambulance subscription program. 2020 Response: The Fire Department supports the evaluation of a subscription program.
However, the department strongly disagrees with the financial estimates provided by the consultant ($1-1.5 million annually). The department estimates that the additional annual revenue is closer to $500K.
Further complicating the implementation of this type of program is that the ambulance transport program in Sacramento County is a borderless system with the closest ambulance dispatched, regardless of the changes made to the City’s Fire Department. The department believes that a subscription program may be more successful if it is implemented by all four fire agencies (Sacramento, Sacramento Metro, Folsom, and Cosumnes). Implementation of a city-only program will require the development and implementation of countywide policy for ambulance transport by a non-city ambulance.
2024 Update: The City does not support this recommendation as the Fire Department continues to believe that the ambulance transport subscription program will not work due to the Sacramento County borderless system. However, the Department has taken many actions to recover costs through cost recovery programs and fees.
While the costs for ALS services have increased over the past 25 years (Resolution 93-434), revenues generated by fees for service have not kept pace. Several factors, including our payor mix, prevent the City from recovering fees for service. Around 80% of the city’s payer mix is Medicare, Medicaid/Medi-Cal. The fire department is receiving Medicare and Medi-Cal reimbursements at a fraction of the current billed amounts.
In October 2011, AB 678 established Ground Emergency Medical Transport (GEMT). This program reimbursed Medi-Cal transports, allowing fire departments to recover EMS fees. A fee study was conducted in 2012 and EMS fees were increased. In December 2014, the Department participated in another revenue recovery program called Rate Range Intergovernmental Transfer (IGT). Managed care programs and can now be reimbursed by IGT for transporting Medi-Cal patients.
Another fee study was completed in 2017 and the city council approved increasing the EMS fees for service while adding a Medical Consumer Price Index (CPI) to account for an annual fee for service increases: fees have increased by 12% since the adoption of the CPI. As well as raising fees for service, the fire department created efficiencies; by contracting with a new biller and investing in an electronic patient care report (EPCR) platform.
In December 2022, the GEMT program ended with a change to legislation AB (1705). The Department of Health Care Services (DHCS) developed the Public Provider Ground Emergency Medical Transport Intergovernmental Transfer Program (PP-GEMT-IGT) in January 2023. By applying an add-on increase, this new program provides increased reimbursement for emergency medical transport performed by public GEMT providers. The DHCS approved another fee increase in January 2024.
Additionally, a single-role ambulance program was proposed by the Fire Department and approved by the council in FY 2023/24. In addition to increasing service and bringing in additional revenue, this program will reduce labor costs. By implementing the program, we can provide the same level of service to the community with lower labor costs. The Department is in the final phase of implementation currently.
While the Fire Department can guarantee fee-for-service revenues, revenue recovery programs like GEMT, IGT, and PP-GEMT rely on state and federal funding. The Fire Department has recognized a structural variance with increased labor and supply costs related to our ALS program. A fee study of EMS fees will be conducted by a consultant hired by the Department to address this increase. After the fee study is completed, the Department will recommend raising all pertinent fees to keep pace with Sacramento market rates.
Recommendation 38. Pursue legislation that allows the City to collect payments to the General Fund from SMUD, similar to what private organizations pay. 2020 Response: This recommendation was also included in the previous Management Partners report. At that time, the City Council was not supportive of pursuing this legislative change, which likely would result in increased rates.
2024 Update: This recommendation requires Council direction or action. In 2020, Council was not supportive of pursuing this legislative change; however, staff will pursue it if the current Council provides such direction.
Recommendation 39 - Evaluate the feasibility of placing a Charter Amendment on the ballot to remove the requirement for binding arbitration for sworn police and fire personnel.
2020 Response: This recommendation along with any City Charter amendment requires direction from the City Council.
2024 Update: This recommendation requires Council direction or action. This recommendation along with any City Charter amendment requires direction from and action by the City Council. The prior City Councils that discussed this issue were not supportive of pursuing this legislative change; however, staff will pursue it should the current Council provides direction. Binding arbitration results in higher General Fund costs for labor units that have binding arbitration as well as disciplinary outcomes that are often less than those pursued by management.