CRACKS IN THE HULL

FY2013 November Retreat

Transition
Economic Forecast = Steady/Flat Flat = Unsustainable Unsustainable = Cracks in the Hull Back to the Shipyard

Cracks in the Hull

Since Recession Began in Fall 2008 Reduced General Fund Operations by 20% Reduced Utility(Water & Wastewater) Fund Operations by 7% Reduced HURF Fund Operations by 13% (43% total Fund) Library Fund grew by 8% Reduced Overall Personnel by 13%
Review

Exhibit 1

Exhibit 1

Cracks in the Hull

Result = Impacts on the sustainability of Infrastructure, Facilities, Equipment, Personnel & Services FY2011 Transmittal Letter & Graph (Exhibit 2) No or Limited Revenue Enhancement Two Strategies

Efficiency;

or Service levels

Exhibit 2

Cracks in the Hull

City has focused on efficiency

Reduced

grown
Fire

in places where workload has stayed flat or

Courts Police Utilities Economic IT Management HR Legal City

Vitality Services

Clerk

Reduced

staff in places where workload has dropped

Development

Community

Cracks in the Hull

Efficiency How do we compare?

IBM

White Paper Smarter, Cheaper, Faster (Ex.

3) Survey of 100 largest U.S. cities Average employees 657/100,000 for Core Services
Flagstaff

675/100,000 for Core Services

Average

expenditures for Core Service=$702/

$623/capita (may explain 19% below market

Capita
Flagstaff

pay) Not adjusted for Cost of Living

Exhibit 3

Cracks in the Hull

Further Efficiency Ideas

Install

radio read meters Agenda software for Clerk Auto attendant for switchboard Fire & Police time entry via cloud computing Continual evaluation of workload to staffing ratios

Cracks in Hull
Will continue to push the envelope on efficiency but limited options remain. That leaves service cuts

Performance

Measures (Inputs, Outputs,

Outcomes) Look at full menu of services Re-prioritize and re-allocate

Fiscal Policy Priorities

Exhibit

Exhibit 4

Cracks in the Hull

Format
Visible

services and goals Service levels vs. actuals Service level policy choices Consequences of choices

INFRASTRUCTURE

Infrastructure Streets-Service Levels

Visible Services & Goal ALL HURF FUNDED

Snow

Plowing Plow all streets within 18 hours of end of storm if less than 12 inches; De-icer Program Street Maintenance Minimum OCI of 70 Pot Hole Repair Repaired within 24 hours of reporting Street Sweeping
Downtown

5 day/wk Southside 3 days/wk Arterials 1/wk Residential 2/mo

Infrastructure Streets Actual

Service levels relative to actual

Snow Plowing Plowing & De-Icer Achieved

Requires $150,000 transfer from GF for De-Icer

Street Maintenance OCI range from 32-100 w/Avg=76.4

293 out of 978 segments under OCI of 70 $500,000 from GF for O&M $2.8 Million in 2008-2009 vs $893,000 in 2011-2012 $50 million to catch up Need between $4-$8 M /Yr for maint. & rebuilds

Pot Holes Achieved 99% of time Street Sweeping

$10,000 GF transfer for street sweeping Downtown 5 days/wk Southside 3 days/wk Arterials 1 day/wk Residential 1 day/month

E. Old Rt. 66 ADOT Yard to I-40 OCI = 32

Elden St. Aspen to Cherry OCI = 41.3

San Francisco Columbus to Forest OCI = 50.9

Beaver St. Butler to Franklin OCI = 60.1

Sparrow Foxglenn to 4th St. OCI = 69.8

Infrastructure Streets - Choices

Service Level Choices

Snow
No

Plowing

plowing of residential under 4 inches ($135,000 savings) Pay $50,000 for de-icer from Stormwater Less for DRIP program
Street
At

Maintenance

status quo, chip seals increase from ~10 to 14-15 years At status quo, overlays increase from ~15 to 20+ years Minimum OCI will fall below 70
Street

Sweeping w/ de-icer - $94,000

Downtown

- 3 days per week & as needed Southside 2 days per week & as needed Arterials 1 day per week & as needed Residential once per quarter & as needed

Infrastructure Streets - Consequences

Consequences
Snowplowing
More

complaints, more vehicles stuck, packed snow turning to ice

Street

Maintenance

When

a streets OCI drops below 70, they deteriorate faster and are more expensive to fix

Street
More

Sweeping

dust in the air; dirtier streets, rocks that crack windshields

Infrastructure Utilities Service Levels

Visible Services & Goal Utilities Funded

Water

Lines - Replace 2 miles of annually Sewer Lines - Replace 1 mile of annually Water Meters Replace every 10 years Reclaim Water Produce A+ from all WWTP Water Resources Meet future demand No Violations Make O&M and Capital Improvements to meet all regulations

Infrastructure Utilities - Actuals

Service Levels Relative to Actuals

Actual

Revenue $800,000 under model projection for

FY12 Water Lines 0 miles in FY11, 0.5 FY12-13; 1 FY14; 2 FY15 Sewer Lines 0 in FY11, 0.2 12, 0.4 13-14; .6 15-17;1 20 Water Meters 0 in FY11, 3% in FY12, $1.5 M to Catch-up Reclaim Water Achieved Water Resources
Paying

$82,000/yr to fund ADWR. Demand is expected to exceed 100 year water supply in ~20 yrs Stipulation with Navajo achieved for Red Gap supply.

Rate Model Error

Cost/Flow = Rate Calculated for water separate from sewer Water is within model tolerances Sewer was off substantially

Investigation

revealed the flow number used was

in error Vendor can produce no documentation of why # changed, only when it changed Vendor accepts no liability since we accepted the model

Infrastructure Utilities - Choices

Service Level Choices

Model

Error Meters Resources

Defer

Operational Capital & no Rio in FY12 Correct the rate for July 1, 2012
Water
Catch-up

by imposing a ~$1.31 per month surcharge Replace 10%/yr starting in 2016 - Requires $300,000/yr
Water
If

State renews its $82,000 surcharge, pass it on as $0.36 per month per account Begin financial planning for Red Gap now
PPA
Institute

only big ticket projects with minimal ROI, but diversified.

Infrastructure Utility - Consequences

Consequences
Community

resistance to increased charges new rate charges just took effect January 1, 2011 Generally people paying less than projected so not the hit that was expected Red Gap discussion will shape Regional Plan Discussion

FACILITIES

Facilities Buildings Service Levels

Visible Service Levels & Goals

Facilities

Condition Index Average of 85% Custodial costs of buildings - $500,000 Custodial cost per sq.ft. (BOMA Benchmark)$1.50 Utility & maintenance costs per sq.ft. of office buildings - $8/sq.ft
Includes

custodial

Facilities Buildings - Actuals

Service Levels vs. Actuals

Facilities

Condition Index CY11 Average of 65%

appropriation dropped from $500,000/yr

Maintenance

to $200,000
Custodial

costs of GF buildings - $408,000 Custodial cost per sq.ft. actual -$1.39 Utility costs per Sq.Ft. of office buildings $5.83
Includes

custodial

Facilities Buildings - Choices

Service Level Choices

Lower Fewer Better

Standard
Facilities Index to 70% Chase Basement lease

Reduce

Buildings Buildings

Eliminate Court

House Maintenance Facility

Restore

Maintenance Levels Continue to pursue APS credits on Alt Energy Projects

Facilities Buildings - Consequences

Consequences
Costs

money to break leases Less positioned if/when growth returns Increased funding maintains what we have & avoids future large expenditures Better Buildings may require bond election to extend (not increase) property tax.

Facilities Parks Service Levels

Visible Services & Goals GF & BBB Funded

Number

of parks & acres per park per 1,000 (96

Goal)
Neighborhood

1.01 acres/1,000 Community 1.42/1,000 Regional 2.03/1,000 Specialty 1.06/1,000

Maintenance

level of parks Avg. = 2 Amenities in Parks Playgrounds, Ramadas, Ball fields Miles of FUTS 1 mile /yr

Facilities Parks - Actuals

Service Levels relative to actuals

Park

acres/1,000 people

Neighborhood

- 0.38/1,000 Community - 0.84/1,000 Regional 0.87/1,000 Specialty 4.06/1,000 No Neighborhood Park west of Milton and N of I-40 No Community Park West of Ft. Valley Rd No Regional Park in South/Southwest of City

Facilities Parks - Actuals

Service levels relative to active

Maintenance
General

Fund Parks - Avg = low 4 BBB Parks & Medians = Avg = 3

No

new amenities/facilities in last three years Miles of FUTS Trails/yr = Achieved

Multiple

funding sources (Bond, BBB, Transportation

Tax)

Facilities Parks - Choices

Service Level Choices

Re-purpose

Specialty Parks to Neighborhood, Community or Regional Parks Decommission/Transfer/or Re-purpose to Passive Parks ($25,000) Exhibit 5 & Exhibit 6
Offer

to HOAs Sell park to Open Space

Increase

maintenance level at remaining parks Remove turf at Senior Center, Thorpe Park tennis court, & Library (>$3,000 savings but 50% water) No maintenance of residential downtown trees

Exhibit 5

Facilities Parks - Consequences

Consequences
Ratios

of parks to goals drops further below average Argument decommissioning not saving enough to justify

EQUIPMENT

Equipment Fleet Service Levels

Not a direct service level but indirect

Ex.

street sweepers; police cars, snow plows

No replacement fund. Fund as revenues allowed.

GF

$500,000/yr in 2008 vs. $178,000/yr in 2012 GF $286,000/yr FY13-FY18 Fire trucks separate

Started fund with sale of Sawmill South ($1M +), but 1x

Equipment Fleet - Inventory

Fund GF Solid Waste Utilities Airport Streets # Rolling Stock 261 66 87 17 115 Total 546 Purchase $ $11,127,975 $ 9,261,696 $ 3,288,305 $ 2,227,831 $ 8,325,450 $34,231,257 Est. Replacement $ $11,520,521 $11,438,868 $ 5,357,400 $ 5,863,000 $22,565,000 $56,744,789

Equipment Fleet Choices & Consequences

Service Choice
Start

Vehicle Replacement Fund

Determine

life cycle of vehicle Charge rent/replacement fee of vehicle per year Distribute $286,000 to start Distribute 1x $ after immediate Fire purchases At 10 yr average life span need ~$1M/yr

Consequences
No

vehicles can be purchased because money distributed everywhere Divisions have to cut something else to replace vehicle leads to further service cuts

PERSONNEL

Personnel Service Levels

Visible Service Levels & Goals

Quality

of Service Provision Excellent or Good Job as indicated in Citizen Survey Compensation & Benefits Middle of the Market Training Maintain Professional Training Uniform Present Professional Appearance Staffing - Adequate Staffing per Service. Includes overtime for Police, Fire, Snow Removal, & Utilities

Personnel Actuals

Service Level vs. Actual

Quality

of Service 77% Excellent or Good; 21% Fair or Poor(2009 Citizen Survey) Compensation & Benefits Stacking of negatives
19%

below Market (2008 survey) Pay cut in May 2009 No raises since 2008 No market adjustments Decrease in benefits Family Premiums & Deferred Comp Decrease in take home pay More functions Less appreciation Anti Government Movement

Personnel

Countermeasures
City

Manager Awards Pension offset to salaries Triggers in place Fiscal policy priorities provide hope Better communication

Helps but Still

Increase

in grievances Increase in legal complaints Good people go elsewhere

Personnel Actuals

Service Levels vs. Actuals

Training

0-100% of 2008 level; 32% average Uniform 0% - 50% of 2008 level; 33% average Staffing
13%

reduction = Match IBM Survey OT cut from $1.7M/yr to $1.3M/yr

Personnel Choices

Service Level Choices

Further

staffing reductions Restore 2009 pay cut Achieve minimum of 25% of 2008 training level Achieve minimum of 25% of 2008 uniform allowance Restore $50,000 in overtime

Consequences negatives noted previously

Better

morale, training, appearance, & quality

OTHER SERVICES

Public Safety Police Service Levels

Visible Service Levels & Goals

Part

1 Violent Crime 4.0/1000 Property Crime continued reduction to 34/1,000 Part II Drug Arrests 6.6/1,000 Domestic Violence decrease reports 5% Reduce Traffic Collision 5% from CY2007 Average Response Times 6.29 minutes Favorable Customer Service Rating 80%

Public Safety Police - Actuals

Service Levels vs. Actuals (CY10)

Part

1 Violent Crime 4.0/1000 Property Crime 46/1,000 and up 1% Part II Drug Arrests 10.6/1,000 Domestic Violence down 3.8% Reduce Traffic Collision down 27% from CY2007 Average Response Times 4.46 minutes Customer Service Rating 81% (2009 Community Survey); 87% (Ongoing Customer Survey)

Public Safety Police - Choices

Service Level Choices

COPS

Grant expires in FY2014 6 officer positions Eliminate Federal Assignments FBI, Marshalls Eliminate DARE COPS Grant for Southside/Inc parking enforcement

Consequences
If

grant positions not funded service level decrease Public push-back on no DARE Morale issues in Department

Public Safety Fire Service Levels

Visible Services & Goals

ALS

personnel on equipment 90% of time Response times, initial response 5 min 90% of time (includes turnout and travel) Response times, full deployment 9 min 90% Fire loss less than 2 tenths of 1 percent Limit wildfire size 5 acre avg. treated; 20 acres untreated

Public Safety Fire - Actuals

Service Levels vs. Actuals

ALS

Personnel on Equipment 96% of time Response times, initial response 5 min 62.8% of time (includes turnout and travel) Response times, full deployment 9 min 75% of time Fire Loss 0.04% loss Limit wildfire size 0.27 acre avg. treated; 0.1 acres untreated

Public Safety Fire - Choices

Policy Choices
Reduce

Station 4 from Engine to Rescue Reduces ALS service to BLS (related 2 tier) Add non-emergency service unit A.K.A Rolling Medic Fuel Management Grant - 50% expires in FY13

Consequences
Longer

response to fire calls in District 4 Rely on Guardian for ALS service

Public Safety Courts- Service Levels

Visible Service Levels & Goals

Right

to a speedy trial

Case

Processing Measurement ABA National Standard: 100% disposed in 90 days. Backlog Measurement Pending Case RatioNational Standard: .25 (# pending/filings yr.). Workload Measurement - # of Citations per FTE Goal is 2,200/FTE.
DV

Recidivism low as possible Recidivism of Drug Offenders low as possible

Public Safety Courts Actuals

Service Levels vs. Actual

Right

to a speedy trial

Case

Processing Measurement Currently 76% disposed in 90 days Backlog Measurement Pending Case Ratio Current Ratio 1.071 CY11 (4x standard) Workload Measurement Current # of Citations per FTE - 2,709/FTE CY11
DV

Recidivism 5.2% CY11 Recidivism of Drug Offenders 4.6% CY11

Public Safety Courts - Choices

Service Level Choices

Maintain

Status Quo Workload varies depending upon officer and grant activity; Reallocate Resources by using dedicated court funds to increase Judicial Specialists thus reducing ratio; Increase Efficiency through Technology - Requires IT Specialist; Increase Resources - Create a Civil Division.

Consequences of Choices
Status

Quo Backlog will continue to increase unless there is a significant decrease in work load. Increased backlog will force the court to prioritize case by case type (civil cases will not be processed). Reallocate Resources Reduce backlog and increase speed. Additional staffing is money cant spend on new facility

Community Development Service Levels

Timely

completion of Planning Studies 90% 30 day review of Development Apps 90% No Surprises after DRB 0 Capital Projects on schedule and budget ->90% Traffic Studies and work orders 80/yr total No Infrastructure retests/warranty work - >95% Applicant satisfaction with Planning 90% New Affordable Housing Units 10%/yr

Community Development Actuals

Timely

completion of Planning Studies Yellow* 30 day review of Development Apps 92.3% No Surprises after DRB 0 Capital Projects on schedule and budget -100% Traffic Studies and work orders 53 Total No warranty work on Infrastructure 99.9% Applicant satisfaction with Planning 95% New Affordable Housing Units CY10: 22% Ownership (12) and 100% Rental (56)

Community Development Choices

Service Level Choices

Identify

a total of $50,000 in GF savings Combine Comprehensive/Neighborhood Planning and Zoning Administration given completion of projects Analyze Housing/Public Housing Programs Continued monitoring of workload/FTE

Consequences
Fewer

community planning services Less capacity for attaining housing units

Community Enrichment Service Levels

Visible Service Levels & Goals

Provide

Recreation Programs Core, Secondary & Support Recreation Programs Provide Recreation Facilities 5 facilities Customer Satisfaction 90% satisfied Cost Recovery Direct Expenses
100%

adult programs 50% Youth Programs 70% Aquaplex

Library

Satisfaction 88%

Community Enrichment Actuals

Service Levels vs. Actuals

Provide

Recreation Programs Achieved Provide Recreation Facilities Achieved Customer Satisfaction Achieved 90% Cost Recovery Direct Expenses
90%

adult programs 85% Youth Programs [100% equals 50% cost recovery] 64.5% Aquaplex
Library

Satisfaction 97%

Community Enrichment Choices

Service level Choices

Close

Aquaplex on Tuesdays Re-purpose Cogdill Redirect BBB Recreation Capital to Flag Rec Center Full cost recovery for J. Lively Reduce Senior Recreation Coordinators Reduce Support Programs Reduce Library Hours Reduce Library Materials

Community Enrichment Consequences

Consequences
Question

about Annual Pass fees at Aquaplex Non-City programming in underserved area Lack of Capital to fund recreation facilities improvements Complaints on fees at J. Lively Support programs may not be offered in community. Complaints about Library Access

Service Expansion
Rio de Flag COPS Grant Snowplay Property Maintenance Ordinance

Re-Allocation
Fiscal Policy Priorities Cracks in the Hull Maintain what we Got

Re-Allocation

Ideas considered but not recommended

Eliminate

one Deputy City Manager Consolidate Police & Fire into Public Safety Division Reduce Contributions to agencies 50% if > $25,000 Distribute BBB Arts & Science Funds w/ City Staff

Re-Allocation
Proposed Service Reduction No Residential Snow Plowing <4 Reduce Maintenance on Residential Sts. Reduce Street Sweeping Reduce Hours At Library Close Aquaplex on Tuesday Increase indirects to Solid Waste Full Cost recovery at J. Lively Reduce Sr. Recreation Coordinators Re-allocate SEDI ($20K) & University to Bus Program($30K) to Sci Foundation AZ Combine Public Works & Utilities $94,000 $70,000 $60,000 $200,000 $100,000 $135,000 $0 Possible Dollars $135,000

$100,000

Re-Allocation
Proposed Service Reductions Increase Aiport PFCs HURF Reduction as it grows Decommission/Repurpose Parks Merge Comp Planning, Neighborhood Planning, & Zoning or Decrease Housing Re-allocate DARE to Parking in 2014 Eliminate Brownfield Program Reduce Materials at Library BBB Funding of Flag Rec Re-allocate $50,000 from Stormwater $30,000 $200,000 $50,000 Total $1,349,000 Proposed Re-allocation $100,000 $? $25,000 $50,000

$0

Re-Allocation
Possible Re-allocations Maintain St O&M Arterials & Collectors Increase Facility Funding Increase Vehicle Replacement Fund Increase Park Maintenance on Fewer Park Restore Paycut (Merit Pool if Trigger) Restore Train to 25% Restore Uniform Allowance to 25% Total Need $4- 8 Million/yr $50M catch-up $300,000/yr $500,000/yr $450,000 $390,000 (100%) ? Re-Allocated Dollars $200,000 $100,000 $100,000 $450,000 $17,000 $20,000 $50,000 $145,000 $100,000 $1,332,000

$500,000/yr + Fire $150,000

Restore Some OT for Public Safety & $400,000 Utilities Funding of 6 officers in FY14 Increase Funding of Outside Legal GF Total $435,000

Re-Allocation
Possible Re-allocations Replace Water meters with radio Reads Courts 1.25 Judicial Specialist Courts IT Specialist Courts Pursue PPP for New Courthouse Courts New Courthouse Maintenance Total Need Re-Allocated Dollars $1.5M catch-up $1.31 monthly surcharge $300,000/yr 10% after for 5 yrs for catch-up $182,750 (4.5 J.S.) $60,000 ~$12M $240,000 (@$6/sqft) $53,750 [From Court Collections] $60,000 [From Court Collections] $unknown $200,000 [From Imprvmnt & Collections]

DISCUSSION
Whats in the range of possibility?