NOTICE OF PUBLIC MEETING PHOENIX CITY COUNCIL …Dimitrios Laloudakis John Trujillo Rob Sweeney Aubrey Anaya Caitlyn Mitchell Pam Willier Felissa Washington-Smith Public Present Craig

NOTICE OF PUBLIC MEETING PHOENIX CITY COUNCIL

FINANCE, EFFICIENCY, AND ECONOMY SUBCOMMITTEE Pursuant to A.R.S. Section 38-431.02, notice is hereby given to the members of the PHOENIX CITY COUNCIL FINANCE, EFFICIENCY, AND ECONOMY SUBCOMMITTEE and to the general public, that the FINANCE, EFFICIENCY, INNOVATION AND SUSTAINABILITY SUBCOMMITTEE will hold a meeting open to the public on Wednesday, June 19, 2013 at 10:00 a.m. located at Phoenix City Hall, 1st Floor Atrium, Assembly Rooms A, B, and C, 200 West Washington Street, Phoenix, Arizona. The agenda for the meeting is as follows:

1. Call to Order and Pledge of Allegiance Chairman Gates

2. Approval of Minutes of the May 15, 2013 Meeting Page 5 Subcommittee members

3. Innovation and Efficiency Task Force This report provides an update on the Innovation and Efficiency savings generated to date This item is for Information Only.

Page 11 0 Minutes Mario Paniagua Ginger Spencer

4. Innovation and Efficiency Task Force This report provides an update on the current Citywide rightsourcing initiatives. This item is for Information Only.

Page 23 0 Minutes Mario Paniagua Ginger Spencer

5. Technology Task Force Update This report provides an update on the City of Phoenix Task Force on Technology Advancement. This item is for Information Only.

Page 25 0 Minutes Rob Sweeney

6. Rightsourcing Street Landscaping This report provides an overview of street landscape and ongoing efforts to rightsource maintenance. This item is for Information Only.

Page 27 0 Minutes James Burke

7. Greater Phoenix Economic Council Contract Award This report requests the recommendation to enter into a one-year contract with Greater Phoenix Economic Council (GPEC) to assist the City in accomplishing its economic development goals and objectives. This item is for Discussion and Possible Action.

Page 29 10 Minutes John Chan

8. Public Transit Service Planning Efficiencies This report requests the approval of recommended right sourcing efficiencies for the Public Transit Department’s service planning function. This item is for Discussion and Possible Action.

Page 31 10 Minutes Maria Hyatt

9. Street Sweeping Analysis This report provides an analysis and recommendation concerning the outsourcing of street cleaning operations. This item is for Discussion and Possible Action.

Page 33 15 Minutes Wylie Bearup

10. Restaurant at Goode Building This report requests the approval to issue a Request for Proposals (RFP) for a restaurant in the Calvin C. Goode Building. This item is for Discussion and Possible Action.

Page 37 10 Minutes John Trujillo

11. Solid Waste Program Study Discussion This report provides information on the progress of the Public Works Solid Waste Program Study.

This item is for Information and Discussion.


12. Solid Waste & Recycling Hauler Permit This report provides information on the development of a City of Phoenix solid waste and recycling commercial hauler permit and reporting program. This item is for Information and Discussion.


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13. Organizational Review This report provides information regarding the City’s organizational review process for 2013. This item is for Information and Discussion.

Page 43 10 Minutes Lionel Lyons

14. Insourcing Litigation Services This report provides an update on in-sourcing Risk Management litigation cases. This item is for Information and Discussion.

Page 45 10 Minutes Gary Verburg

15. Call to the Public Chairman Gates

16. Future Agenda Items Chairman Gates

17. Adjournment Chairman Gates

For further information, please call Dennis Murphy, Assistant to the City Manager, City Manager’s Office at 602-495-5467. Persons paid to lobby on behalf of persons or organizations other than themselves shall register with the City Clerk prior to lobbying or within five business days thereafter, and must register annually to continue lobbying. If you have any questions about registration or whether or not you must register, please contact the City Clerk’s Office at 602-262-6811. For reasonable accommodations, call Dennis Murphy at Voice/602-495-5467 or TTY/602-534-5500 as early as possible to coordinate needed arrangements.

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CITY OF PHOENIX CITY COUNCIL FINANCE, EFFICIENCY, and ECONOMY SUBCOMMITTEE

SUMMARY MINUTES May 15, 2013

Assembly Rooms A, B, and C Phoenix City Hall 200 West Washington Street Phoenix, AZ 85003 Council Members Present Councilman Bill Gates, Chair Councilman Daniel Valenzuela Councilman Tom Simplot Councilman Michael Nowakowski City Staff Present David Cavazos Eric Johnson Rob Sweeney Dennis Murphy Maria Hyatt Rick Naimark Jeff DeWitt Neil Mann Aaron Mertz Mario Paniagua Carlos Padilla Kara Kalkbrenner Eric Johnson Seth Dyson Pam Lindley Rachel Miller Troy Hays Cheryl Griemsmann Christy Blake Kedrick Ellison Michelle Pierson Mark Carr Phil Bradstock Shane Silsby Dimitrios Laloudakis John Trujillo Rob Sweeney Aubrey Anaya Caitlyn Mitchell Pam Willier Felissa Washington-Smith

Public Present Craig Tribken Shawn Van Leeuwen Adam Robbins Liz Topete-Stonefield Steve Espinoza Amy Bratt Mark Holleran

1. Call to Order

Chairman Bill Gates called the meeting to order at 10:07 a.m. with Councilmen Daniel Valenzuela, Tom Simplot, and Michael Nowakowski present. 2. Approval of Minutes of the April 17, 2013 Meeting

Councilman Simplot moved approval of the April 17, 2013 meeting minutes. Councilman Nowakowski seconded the motion, which was approved unanimously.

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3. Innovation and Efficiency Task Force – New Members and Workgroups

Chairman Gates thanked the new members of the Innovation and Efficiency Task Force. He also noted the commencement of the Advancing Technology Task Force. 4. CDBG Small Business Assistance Open Application Program Contracts Councilman Simplot moved approval staff’s motion to enter into contracts with four agencies to provide small business assistance through the City’s Open Application Program funded by the Community Development Block Grant (CDBG) program. Councilman Nowakowski seconded the motion, which passed unanimously.

5. Memorandum of Understanding with Maricopa County Community College District Community and Economic Development Director John Chan briefly reviewed the city’s economic development strategic plan. He then discussed the partnership between the city and the Maricopa County Community College District (MCCD) to enhance the region’s workforce development and economic development resources. MCCD Director of Workforce Development Randy Kimmens discussed the development of a corporate college focused on workforce training needs and assessments. He indicated the college will open in July 2013. He noted the Center for Workforce Development collaborates with other organizations to promote economic development across the county and to provide labor market data and other research. Community and Economic Development Deputy Director Michelle Pierson provided an overview of the Memorandum of Understanding (MOU) between the city and MCCD. She requested the subcommittee recommend the City Council to authorize the City Manager, or his designee, to enter into a Memorandum of Understanding with Maricopa County Community College District to collaborate on the delivery of coordinated economic development and workforce services to employers and job seekers. Mr. Chan added that staff would present a comprehensive workforce development strategy to the City Council on May 28, 2013, of which the MOU was a part. Chairman Gates noted the importance of a talented workforce for business recruitment. He expressed support for the partnership between the city and MCCD. Councilman Simplot moved approval of staff’s recommendation. Councilman Nowakowski seconded the motion, which was approved unanimously. 6. Excess City-Owned Property City Manager David Cavazos provided an overview of staff’s approach to excess city-owned property, based on subcommittee feedback. He indicated staff would update the subcommittee at a later date with additional information.

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Finance Director Jeff DeWitt discussed the city’s property policy, including an annual inventory, a review and selection of excess property, and City Council review and consultation. He noted the annual inventory helped differentiate among property types, such as historic, vacant, improved, or remnant properties, and indicated the inventory would be reviewed by an outside brokerage to ensure all properties are classified correctly. He then discussed the review of excess property, which includes analyzing any restrictions related to funding source of the property, and the process for making it available to other departments via the city’s interdepartmental land purchase policy. Mr. DeWitt concluded by discussing the need for City Council review and authorization of action to be taken for excess property. He requested approval of staff’s recommendation and to issue a solicitation for a brokerage firm to review the inventory of property. Councilman Simplot expressed support for making property information available and asked about the annual cost of the process. Mr. Cavazos explained the goal of the process was to create revenue. Councilman Simplot inquired how the process could be further streamlined for small business with concerns or interests in city property. Mr. DeWitt stated that once the inventory was complete and assets are identified, staff hopes to develop a streamlined process for how assets can be bought and sold. Mr. Cavazos noted the brokerage component of the policy would assist in this area. Councilman Nowakowski expressed concern for how particular city parcels are used, such as vacant park land. Councilman Valenzuela requested particular attention be given to the use of the Barrister Building. Councilman Simplot asked staff had looked into whether city buildings could be used for retail space. Mr. Cavazos noted discussions involving the Calvin Goode Building and indicated staff would like to return to the subcommittee at a later date with more information. Chairman Gates asked whether the inventory of properties included their zoning designations. Mr. DeWitt stated it did not. Chairman Gates requested the inventory include this information. He also suggested notice be given to homeowners associations and other neighborhood groups regarding the use of city properties.

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Councilman Simplot moved approval of staff’s recommendation. Councilman Nowakowski seconded the motion, which passed unanimously. Chairman Gates clarified that the motion included the possibility of giving some form of notification to neighborhoods regarding the use of city-owned property in the area. 7. Proposed Opportunities for Operational Savings at the Lake Pleasant Water Treatment Plant Water Services Director Neil Mann introduced Assistant Water Services Director Carlos Padilla to discuss proposed opportunities for savings at the Lake Pleasant Water Treatment Plant, based on recently conducted efficiency studies. Mr. Padilla provided an overview of the Lake Pleasant Water Treatment Plant operation, including an operations agreement with American Water. He noted three areas propsed for change in the agreement, based on the efficiency studies, including reduced flow rates, modified water quality standards, and the utilization of unused capacity. He indicated these changes would increase operational flexibility and could save between $900,000 and $1.2 million. Mr. Mann indicated staff would return in the fall with the contract amendment. Chairman Gates inquired into the process for amending the agreement. Mr. Padilla indicated the staff, along with the Law Department, had been in discussions with American Water. Chairman Gates asked whether use of the facility could change depending on growth. Mr. Padilla stated the agreement was built to accommodate potential growth if needed. Chairman Gates asked whether there were any opportunities to provide services to other cities, as a source of additional revenue. Mr. Padilla noted the City of Peoria is analyzing their water needs and may attempt to work with the City of Phoenix for some of their water treatment needs. 8. Energize Phoenix Initiative Update Deputy City Manager Rick Naimark noted the coming conclusion of the Energize Phoenix initiative and introduced Public Works Director John Trujillo to provide a status update on the program. Mr. Trujillo provided a brief history of energy efficiency efforts at the city, as well as an overview of the $25 million, grant-funded Energize Phoenix program. He then introduced staff member Dimitrios Laloudakis to further discuss the program.

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Mr. Laloudakis recognized the various partners in the program and discussed the program’s efforts and achievements. He indicated the program successfully upgraded both commercial and residential buildings to maximize their energy efficiency. He noted that while the residential and commercial upgrades were successful, the loan program had to be truncated due to market conditions. Mr. Laloudakis stated the program will conclude in the fall and that Arizona State University will conduct an analysis of the economic impact of the program. Mr. Naimark noted the size of the grant program, the innovation demonstrated by staff, and the overall success it achieved. Councilman Nowakowski asked why solar panels at Burton Barr Library couldn’t be included in the program. Mr. Laloudakis stated the Department of Energy excluded solar panels from the grant. Councilman Simplot expressed frustration that condominium owners were unable to apply for grant funds. He asked whether there was any way to use future funds to address some of the issues learned from the program. Mr. Laloudakis indicated staff would look for continuing opportunities to leverage resources. Mr. Cavazos statated staff would return to the subcommittee with more information in the future. Councilman Simplot expressed concern for all components of properties, not only main systems like central plants. Chairman Gates opened the floor for public comment. Mr. Mark Holleran with Arizona Housing Inc. thanked staff for their work and the benefit the Campaige Place property received from the program. Mr. Steve Espinoza expressed support for the program, which allowed him to upgrade his home’s air conditioning unit. Ms. Liz Topete-Stonefield expressed support for the program, noting energy efficiencies paid for by the program resulted in a 20% decrease in energy use in her home. Mr. Adam Robbins noted the program’s use of LED lighting and its potential for energy savings. Mr. Shawn Van Leeuwen indicated the program had benefitted his company greatly. 9. PHX 24/7 Initiative

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Deputy Street Transportation Director Shane Silsby provided an overview of the Phoenix 24/7 initiative. He discussed the program’s goal of providing additional services on a 24 hours a day, seven days a week basis, through the use of innovation and efficiency. He indicated Phase I, which focuses on business assistance and non-911 services, is planned for implementation by the end of July. He noted the final report would include additional information and focus on key areas, such as payments, business enhancements, and other opportunities. Mr. Silsby also noted parallel initiatives occurring throughout the city related to 24/7 services. Chairman Gates thanked staff for their work and requested they touch base with the Advancing Technology Task Force to look for any synergies among the two efforts. 10. Call to the Public None. 11. Future Agenda Items Councilman Simplot asked for a review of low income housing tax credits and the city’s use of them as self-developers of low income housing projects. 12. Adjournment Chairman Gates adjourned the meeting at 11:35 a.m.

Respectfully Submitted, Aaron K. Mertz Budget and Research Department

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Finance, Efficiency, and Economy, June 19, 2013, Agenda Item 3

CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: Mario Paniagua

Budget & Research Director /

Co-Chair, Innovation & Efficiency Task Force

Ginger Spencer

Special Assistant to the City Manager /


SUBJECT: INNOVATION AND EFFICIENCY TASK FORCE UPDATE

This report provides the Council Finance, Efficiency & Economy (FEE) Subcommittee an update on the Innovation and Efficiency savings generated to date, totaling over $76 million. Additionally, the 2013-14 tentative budget adopted by the City Council on June 5, 2013 includes an additional $5 million of innovation and efficiency savings expected in 2013-14, which will bring the savings total to over $81 million. The City is well on the way toward the City Manager’s goal to achieve $100 million in savings by 2015. This report is for information only; no action is required. BACKGROUND

In 2012, the City Manager proposed, and the City Council approved, a savings goal of $100 million to be achieved by 2015 to further demonstrate the city’s continued commitment to innovation and efficiency.

In January 2013, the Innovation & Efficiency Task Force reported to the City Council that since 2010 when the Task Force began its meetings, a total of $62.7 million in annual savings had been generated. Included in that total savings amount was $12.8 million in savings from the 2010, 2011 and 2012 City Manager’s annual Organizational Review process. Last year’s Organizational Review savings resulted in the eliminations of 50.7 full-time equivalent positions (FTE), several more position reallocations, and other cost saving efforts from various departments. These included: Human Services rightsourcing the Senior Meal Program, expected to save about $450,000; Street Transportation utilizing smart phones in place of laptops, resulting in $35,000 in cost savings; and Parks and Recreation contracting the use of technology to lower water costs resulting in savings of $50,000. As is being reported separately, the annual Organizational Review will continue this summer.

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In May 2013, the Task Force reported a total Innovation and Efficiency savings of $65.3 million, with $22.2 million of that in the General Fund.

UPDATED TOTAL SAVINGS Including the nearly $11 million in savings from specific measures in the Fiscal Year 2013-14 budget that implement administrative efficiencies, process improvements, rightsourcing, and organizational streamlining, the City will achieve an Innovation and Efficiency savings total of more than $76.1 million. Over $33 million of that savings is in the General Fund. An additional $5 million of further expected Innovation and Efficiency savings is included in the 2013-2014 Budget, which will bring the savings total to over $81 million. Listed below are just a few specific highlights of the recent cost saving actions. See Attachment A for the complete Savings Report.

• Various general administrative efficiencies from multiple departments will result in over $3.6 million in annual savings;

• Fire contractual efficiencies and other savings will result in over $1.7 million in annual savings;

• Water Services insourcing pilot program will result in over $1.2 million in annual savings;

• Police Air Support Unit operations and maintenance efficiencies will result in $629,000 in annual savings;

• Outsourcing of Parks and Recreation Department Community Center janitorial services will result in $375,000 in annual savings;

• Streamlining of technical support for various City systems will result in $139,000 in annual savings;

• Outsourcing of auctions and surplus property collection will result in $110,000 in annual savings.

The Task Force remains focused on reaching the savings goal of $100 million by December 2015.

The Task Force appreciates the leadership and direction of the FEE Subcommittee and full City Council to implement a wide variety of innovative solutions that continue to improve efficiency and service.

Recommendation This report is for information only; no action is required.

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ATTACHMENT A

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General Non-General

Initiative Fund Funds

1 Reduce traffic communication signal leases 75,000

2 Reduce parking meter maintenance (as result of new credit card enabled meters)

30,000

3 Street Transportation Administrative Efficiencies 207,000

4 City Fleet Efficiencies 92,000

5 Reduce replacement funds for city vehicle involved in accidents 100,000

6 Public Works Contractual Efficiencies and Other Savings 101,000

7 Public Works Administrative Efficiencies 30,000

8 Public Information Office Administrative Efficiencies 283,000

9 Eliminate unneeded 50 mobile and 110 portable radios 75,000

10 Outsource polygraph function 370,000

11 Streamline Police Take-Home Vehicle Process 352,000

12 Gang Unit Relocation 31,000

13 Streamline computer maintenance contracts 81,000

14 Mobile Data Terminal and Lab Equipment Replacement Alternative Funding 1,270,000

15 Police Air Support Unit Operations and Maintenance Savings 629,000

16 Police Administrative Efficiencies 103,000

17 Planning and Development Compensation Reallocation 109,000

2013-14

Total Identified Savings by Innovation and Efficiency Task Force

2013-14

Year General Fund Non-General Funds Total

2009-10 2,540,000 16,000 2,556,000

2010-11 8,103,608 14,616,000 22,719,608

2011-12 6,283,000 9,989,978 16,272,978

2012-13 5,290,000 18,500,748 23,790,748

2013-14 10,808,000 - 10,808,000

TOTAL 33,024,608$ 43,122,726$ 76,147,334$

Grand Total Identified Savings by Innovation

and Efficiency Task Force

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General Non-General


2013-14


2013-14

18 Outsource Community Center Janitorial Services 375,000

19 Parks and Recreation Administrative Efficiencies 525,000

20 Office of Environmental Programs Administrative Efficiencies 24,000

21 Neighborhood Services Administrative Efficiencies 122,000

22 Municipal Court Administrative Efficiencies 351,000

23 Outsource Substance Abuse Screening Services 260,000

24 Mayor's Office Administrative Efficiencies 15,000

25 Library Inventory, Technology, and Other Operational Efficiencies 541,000

26 Law Administrative Efficiencies 146,000

27 Information Technology Services Administrative Efficiencies 1,056,000

28 Eliminate after-hours radio equipment support 17,000

29 Streamline tech support for various city systems 139,000

30 Human Services Administrative Efficiencies 181,000

31 Human Resources Administrative Efficiencies 146,000

32 Ambulance Billing Office Relocation 244,000

33 Fire Contractual Efficiences and Other Savings 1,780,000

34 Outsource auctions and surplus property collection. 110,000

35 Tax Compliance Technology Innovations 278,000

36 Equal Opportunity Administrative Efficiencies 83,000

37 Community and Economic Development Compensation Reallocation 132,000

38 City Manager's Office Administrative Efficiencies 45,000

39 City Council Administrative Efficiencies 33,000

40 City Clerk Administrative Efficiencies 140,000

41 City Auditor Administrative Efficiencies 67,000

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General Non-General


2013-14


2013-14

42 Budget and Research Administrative Efficiencies 60,000 Totals 10,808,000$ -$

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General Non-General


1 Water Services Insourcing Pilot Program 1,215,000

2 Organization Review Savings - Year 3 1,368,000 1,614,000

3 Warranty Credits for City Fleet 350,000

4 Paint Scheme for Refuse Trucks 52,000

5 Vinyl Wrapping Signage on Refuse Trucks 94,000

6 CNG Fuel Savings for City Fleet 107,000

7 Transfer Station Materials Harvesting 130,000

8 Reduced O&M for Solid Waste Sideloader Trucks 267,000

9 Custodial Day Cleaning Savings 320,000

10 Republic Services Reciprocal Agreement 483,000

11 Municipal Recycling Facilities Operating Savings 878,000

12 Employee Suggestion Program Savings 4,710,748

13 Transit Route Changes Efficiency Savings 3,000,000

14 Enhanced Sales Tax Compliance Initiative 2,899,000 2,212,000

15 Maximize Collection of Delinquent Acounts (A/P to A/R Matching) 152,000 95,000

16 Use of Volunteer Hearing Officer for Historic Preservation 4,000

17 Net Annual Operating Savings from Sale of McMullen Valley 3,100,000

18 Elimination of Special Projects Area of Police 65,000 300,000

19 Service Line Protection Program 375,000

Totals 5,290,000$ 18,500,748$


2012-13

2012-13

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General Non-General


1 Organizational Review Savings - Year 2 1,970,000 1,543,000

2 Streetlight Maintenance Contract in APS Service Area Savings 425,000

3 Same Day Solid Waste Collection 2,347,978

4 Transit Contracts Savings- May 2011 352,000

5 Competitive Rebid of Health Insurance Costs 1,670,000 980,000

6 Water Department Organizational Changes & Savings- May 2011 2,200,000

7 Prescription Drug Discount Program 80,000

8 Printing Services - IT & City Clerk Consolidation 148,000 132,000

9 In-Sourcing of Risk Management Cases 253,000 142,000

10 Organizational Review Savings - Year 1 1,737,000 2,293,000 Totals 6,283,000$ 9,989,978$


2011-12

2011-12

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General Non-General


1 Prescription Drug Discount Program (Partial First-Year Savings) 18,608

2 Printing Services - IT & City Clerk Consolidation (Partial First-Year Savings) 49,000 44,000

3 In-Sourcing of Risk Management Cases

4 Housing Customer Service Efficiency - Eliminate temporary staffing 25,000

5 Arena Refinancing Savings 400,000

6 Vacancy Management 1,376,000

7 Increased revenue for enhanced inspection services to Qwest 125,000

8 Additional efficiency savings for consolidation of know99 with PIO 400,000

9 Improved Revenue Collections (commercial rental sales tax compliance) 900,000 550,000

10 Eliminating mailings of open enrollment documents 20,000

11 Combining Flexrap payments with employee paychecks 10,000

12 Organizational Review Savings - Year 1 (Partial First-Year Savings) 1,146,000 1,241,000

13 FAC and HSD Consolidation - 2 further position cuts in FAC 140,000

14 Professional Services Contractors 3% Reduction 69,000 715,000

15 Liability Insurance Premium Savings 169,000 305,000

16 Implementation of late fee on municipal services bill 1,000,000

17 Efficiencies in Computer Operations - reduction of 3 IT positions 114,000 101,000

18 Reducing number of packets produced for Formal Agendas 5,000

19 Reducing the number of contracts printed - elimination of Records Clerk II 53,000 3,000

20 Life Insurance re-bid savings 511,000 286,000

21 Reserve-a-Ride - Elimination of demand trips 860,000

22 Small Function Consolidations 127,000

23 Renegotiation of contract for effluent for Palo Verde Nuclear Plant 7,500,000

24 Increase Pawn Shop Fees to full cost recovery 180,000


2010-11

2010-11

20

General Non-General



2010-11

2010-11

25 Insourcing of Aviation Department's Voluntary Land Acquisition Program 2,000,000

26 Reduce frequency of Notes publication to 6 times annually 60,000

27 Development Services and Planning Consolidation 525,000 127,000

28 Elimination of paper pay advices 85,000 -

29 Vehicle towing and impoundment administrative fee 332,000

31 Additional revenue from increased alarm cost recovery fees (permit fees, false alarm assessments, inspection fees, application fees, license fees)

350,000

32 Engineering and Architectural Services and Public Works Consolidation 43,000 574,000

33 City Clerk Office Systems and Information Technology Consolidation (Phase II)

116,000 65,000

Totals 8,103,608$ 14,616,000$

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General Non-General


1 Reduced severance/retirement payouts 2,500,000

2 Engineering and Architectural Services and Public Works Consolidation (Partial First-Year Savings)

11,000

3 City Clerk Office Systems and Information Technology Consolidation(Phase I)

29,000 16,000

Totals 2,540,000$ 16,000$


2009-10

2009-10

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CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: Mario Paniagua

Budget & Research Director /


Ginger Spencer

Special Assistant to the City Manager /


SUBJECT: INNOVATION AND EFFICIENCY TASK FORCE - RIGHTSOURCING UPDATE

This report provides an update to the Finance, Efficiency and Economy Subcommittee on the current Citywide rightsourcing initiatives that recently were presented to the City Council and are underway or initiatives that are under evaluation, which will be brought forward for Subcommittee discussion and possible action. This report is for information only.

THE ISSUE In 2012, City departments initiated 27 rightsourcing initiatives that included outsourcing and insourcing of City services, right-sizing and managed competition processes. By May 2013, an additional eight new rightsourcing opportunities were evaluated and approved by the City Council. Additionally, there are seven initiatives that continue to be evaluated and will be brought forward to the Subcommittee for discussion and possible action. These fifteen new rightsourcing initiatives are summarized below. Rightsourcing Item Department(s) Council Subcommittee(s)

Review / City Council Approval Dates

1. Reserve-A-Ride Outsource Transit Finance, Efficiency & Economy – April 17, 2013 Policy – May 7, 2013

2. Program Assessments - Insource Water Services Finance, Efficiency & Economy - April 17, 2013

3. Zone 1 Mowing Services - Managed Competition

Parks & Recreation

Finance, Efficiency & Economy - April 17, 2013 Formal – May 15, 2013

4. Janitorial Services at 7 Remaining Community Centers Outsource

Parks & Recreation

Finance, Efficiency & Economy - April 17, 2013

5. Polygraph Services Rightsourcing

Police Public Safety &Veterans – April 10, 2013

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6. Golf Courses Operation and Maintenance Analysis RFQ

Parks & Recreation

Parks & Arts – May 1, 2013 Formal – May 15, 2013

7. Lake Pleasant Water Treatment Plant Rightsourcing Evaluation

Water Services Finance, Efficiency & Economy - May 15, 2013 Transportation & Infrastructure – TBD

8. Surplus Property Sale – Outsource

Finance Finance, Efficiency & Economy – May 15, 2013

9. Street Landscaping – Outsource Parks & Recreation and Street Transportation

Finance, Efficiency & Economy - June 19, 2013

10. Street Sweeping Analysis

Street Transportation

Finance, Efficiency & Economy - June 19, 2013

11. Managed Document Output Services Review

Finance Finance, Efficiency & Economy – June 19, 2013

12. Litigation Services Insource, Phase III

Law Finance, Efficiency & Economy – June 19, 2013

13. Substance Abuse Screening Outsource

Municipal Court TBD

14. Golf Courses Food and Beverage Outsource

Parks & Recreation

TBD

15. Bulk Trash Collection Analysis

Public Works Deferred due to waste reduction program review

Recommendation This report is for information only; no Council action is required.

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CITY COUNCIL REPORT

TO: Lisa Takata

Deputy City Manager

FROM: Rob Sweeney

Acting Chief Information Officer

SUBJECT: TASK FORCE ON TECHNOLOGY ADVANCEMENT UPDATE

This report provides an update to the Finance, Efficiency, and Economy Subcommittee on the City of Phoenix Task Force on Technology Advancement. THE ISSUE In November 2012, the Finance, Efficiency, Innovation and Sustainability Subcommittee approved the City Manager’s creation of the Task Force on Technology Advancement (Task Force) to help identify significant technology advancements critical to the City’s future success. The goal of the Task Force is to identify technologies and strategies to drive innovation in city processes, and create better interaction with Phoenix residents and businesses. The Task Force has held two meetings. The first meeting involved a discussion of the City’s technology infrastructure, critical systems, and current initiatives. The Task Force members identified mobility technologies and open data as important areas for initial focus. The second meeting concentrated on mobility technologies and strategies. Staff provided an overview of current initiatives, including the ongoing Phoenix.gov Refresh Project approved by City Council in December 2012. The Task Force members were supportive of the strategy that requires minimal mobile application support, but provides the public mobile access to the information for which they most often search. Members requested follow-up from staff on further information and analysis on mobility offerings in other cities and states, current priorities for mobile applications, and proposed marketing of mobile offerings. Task Force members stressed the importance of information being made available based on good meta-data, so that the public need not know the City’s organizational structure or jargon. OTHER INFORMATION The Task Force is composed of members from IT companies, small businesses, academia, large companies, and the public sector. The next meeting is being scheduled for late June 2013. RECOMMENDATION This report is for information only.

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CITY COUNCIL REPORT

TO: Ed Zuercher, Assistant City Manager

FROM: James P. Burke, Acting Parks and Recreation Director

SUBJECT: RIGHTSOURCING STREET LANDSCAPING

This report provides the Finance, Efficiency, and Economy Subcommittee an overview of street landscape and ongoing efforts to rightsource maintenance. THE ISSUE With over 755 miles of arterial streets traveled by approximately 100 to 150 million vehicles per month, street landscaping is one of the most viewed city assets in Phoenix. Well designed and maintained streetscapes have an impact on surrounding property values and public perceptions of an area. The Street Transportation and Parks and Recreation Departments are partners in providing street landscaping for the city. The Street Transportation Department (STD) is responsible for the overall design and installation of street landscape along arterial streets in the city, while the Parks and Recreation Department (PRD) is responsible for the maintenance of these areas. In 2009, City Council was provided with an overview of street landscape maintenance and approved a policy that staff contract all new street landscape projects and conduct an analysis of existing street landscapes in order to identify areas of maintenance responsibility and inventory city trees. This effort was contracted to Davey Trees and an ASU graduate student and completed in December 2012. The data provides staff with information to delineate maintenance responsibilities of street landscapes based upon city code, as well as evaluate outsourcing maintenance. OTHER INFORMATION From the study, PRD staff currently maintains over 755 miles of street landscape; this is equivalent to the distance from Phoenix to San Francisco. Neither the Street Transportation or Parks and Recreation Departments are responsible for street landscape maintenance adjacent to commercial, industrial, multi-family or areas maintained by Homeowners Associations. However, during the analysis, locations were identified where the city does perform maintenance in these types of areas. Further research is being conducted to identity options for these areas. Since 2009, PRD budget reductions for street landscape maintenance Personal Services have totaled $1.6M; eliminating 66 fulltime positions and funds for contractual

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and commodities. With over 700 irrigation controllers, water continues to be a major expense totaling over $1.5M. For fiscal year 2012-13, PRD has 21 positions to maintain 657 acres, a ratio of 1FTE to every 31 acres. The increase in acres maintained coupled with the decrease in available staff has resulted in a complaint driven maintenance cycle. In addition, Parks crews are often pulled from other areas to supplement the 21 FTE to deal with emergency maintenance issues. Parks and Recreation and Street Transportation Department’s staff work together to identify ways to improve design and maintenance of street landscaping throughout the city. Staff safety, efficiency, budgets, compliance with codes and mandates and visual appeal are all factors taken into consideration when looking at how to best maintain this resource for the community. Funds have been added in the past two Street Transportation budgets to outsource new landscaping coming on-line. Based upon initial research for addressing street landscape maintenance, the PRD will identify additional resources in order to outsource all existing areas within the department’s responsibility. The existing budget would need to be increased to outsource the landscaping to an acceptable level. Parks and Recreation and Budget and Research will work to identify options for rightsourcing street landscape maintenance. The PRD will develop a five year plan, which includes a phased in approach for outsourcing maintenance, identifying contact management needs and solutions for addressing non-city maintenance responsibility. The plan will include measures to improve maintenance frequency to address complaints, liability and overall look of street landscapes, and develop funding solutions to replant a portion of missing plant material, repair irrigation systems, and refresh granite. The STD will continue to outsource maintenance of any new street landscape projects. RECOMMENDATION This report is for information only.

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CITY COUNCIL REPORT

TO: David Cavazos City Manager

FROM: John M. Chan

Community and Economic Development Director

SUBJECT: AUTHORIZATION TO CONTRACT WITH GREATER PHOENIX ECONOMIC COUNCIL

This report requests the Finance, Efficiency and Economy (FEE) Subcommittee recommend City Council approval to authorize the City Manager, or his designee, to enter into a one-year contract with Greater Phoenix Economic Council (GPEC) to assist the City in accomplishing its economic development goals and objectives. THE ISSUE The City of Phoenix has been a member of GPEC since its inception. Each GPEC member community’s fee is calculated using a per capita rate based on the most current population estimates. The new contract is based on 2012 population estimates from the Office of Employment and Population Statistics at the Arizona Department of Administration. The July 1, 2012 population estimate for Phoenix is 1,464,727. Staff requests the Subcommittee recommend City Council approval to enter into a new contract with GPEC for FY 2013-14 with formula based funding of $570,804. Staff also requests that the FEE Subcommittee recommend that the Mayor and Council approve up to $100,000 in additional funding for supplemental business attraction services. All supplemental services would solely benefit the City of Phoenix and will include enhanced international marketing, export and trade promotion, international market research and other services specific to the City of Phoenix’s economic development efforts. Targeted international marketing and increased international trade are essential components of the Department’s economic development mission as outlined in the Council adopted Economic Development Strategic Plan. The City Council approved supplemental contract services in FY 2011-12 and FY 2012-13. The supplemental services provided in the past two years included specialized industry research in the local aerospace and defense sector and the development of new international marketing materials including the international investor tool kit. OTHER INFORMATION GPEC represents 20 municipalities within the region and conducts a variety of diverse and value-added services and activities on behalf of its members. GPEC’s efforts

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include marketing the region, coordination of regional prospect proposals and real estate tours, domestic and international sales missions, and other strategic activities resulting in business investment in the region. In addition to the public sector members, more than 150 private investors contribute resources to support GPEC’s efforts. GPEC specifically collaborates with CEDD every year to generate prospects and locate new business investment in Phoenix. Year to date, GPEC has helped locate 23 companies to the region. Nine of the companies located in Phoenix and are expected to create nearly 1,800 jobs and more than $229 million in new investment. GPEC cultivated the leads and worked closely with CEDD management and staff to attract these new jobs and capital investment in Phoenix. The total requested funding including the additional $100,000 is budgeted in fiscal year 2013-2014. RECOMMENDATION This report requests the Finance, Efficiency and Economy Subcommittee recommend City Council approval to authorize the City Manager, or his designee, to enter into a one-year contract with Greater Phoenix Economic Council (GPEC) to assist the City in accomplishing its economic development goals and objectives.

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FINANCE, EFFICIENCY AND ECONOMY SUBCOMMITTEE REPORT

TO: Maria Hyatt

Interim Public Transit Director

FROM: Kini Knudson

Deputy Public Transit Director

SUBJECT:

PUBLIC TRANSIT SERVICE PLANNING – RIGHT SOURCING EFFICIENCIES

This report requests the Finance, Efficiency and Economy Subcommittee approve recommended right sourcing efficiencies for the Public Transit Department’s service planning function. Through the recommended reduction of two (2) contracted schedulers and the creation of a new City position, it is estimated the City will save more than $56,000 annually. THE ISSUE The Service Planning Section of the Public Transit Department’s Facilities Division is responsible for modifying transit routes and schedules, coordinating new transit service, analyzing and implementing service efficiencies, and assisting in the development of the regionally published transit book. These duties are performed for Phoenix-operated bus service, but also include a regional support element for non-Phoenix operated bus and light rail service. These duties have historically relied heavily on third party contractors to provide the necessary technical support for transit scheduling services. Most recently, on June 29, 2010, Phoenix entered into an agreement with Veolia Transportation Services (VTS) to provide scheduling services, along with other transit support services for Phoenix’s bus operations control center (OCC), and National Transit Database (NTD) data collection responsibilities. The initial term of the VTS agreement was three years commencing on July 1, 2010. The City Council approved a one-year extension to the contract on May 15, 2013, which will extend contract services through June 30, 2014. Since the implementation of the new VTS contract in 2010, Public Transit has worked to develop technical scheduling expertise in-house, to decrease reliance on outside contractors and reduce annual operating costs. Public Transit has identified an opportunity to achieve efficiency cost savings in its Service Planning Section through the reduction of contracted services with VTS implemented in conjunction with the addition of one full-time equivalent (FTE) City position. OTHER INFORMATION Reductions to the VTS contract can be made per the contract terms with a minimum 30 day written notice. The contract would be modified to reduce two (2) Scheduler

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positions, reducing the overall contract amount by approximately $165,000 annually. The services provided by the two contract schedulers can be efficiently and immediately transferred to City staff through the creation of a new Planner III position estimated to cost approximately $109,000 annually. This cost assumes salary, plus fringe, and hiring a candidate based on the relative experience and expertise anticipated for this Planner III position. Right sourcing these services creates a more efficient work environment, builds expertise within the City, and results in cost savings. To ensure a seamless transition, the reduction in contract services would not be implemented until the new Planner III position has been filled. The estimated cost savings associated with the recommended contract reduction and new staff position are summarized below.

Right Sourcing Efficiencies Description FY2014 Cost Savings

Reduce Two (2) Contract Schedulers ($ 165,000)

Add One (1) City Planner III $ 109,000

Net Savings ($ 56,000)

RECOMMENDATION This report requests the Finance, Efficiency and Economy Subcommittee approve the Public Transit Department recommended right sourcing efficiencies for its service planning function.

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CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager

FROM: Wylie Bearup, PE, PhD

Street Transportation Director/City Engineer

SUBJECT: STREET SWEEPING ANALYSIS

This report provides an analysis and recommendation concerning the outsourcing of street cleaning operations. Staff requests that the Finance, Efficiency, and Economy Subcommittee recommend City Council approval to begin a one-year pilot outsourcing initiative for the Street Transportation Department downtown street sweeping operations. If approved, staff will proceed with issuing a Request for Proposals and return to the Subcommittee and Council with the results of that process. THE ISSUE The City of Phoenix currently operates a fleet of 35 street sweepers, which sweep approximately 65,184 miles of major/collector streets and 84,192 miles of local streets per year. Major and collector streets are swept every 14 days, and local streets are swept once every quarter. The downtown area is swept every night. In order to achieve maximum operational efficiencies, Street Transportation staff explored the possibility of outsourcing street cleaning activities. During the analysis, one of the major factors considered was the importance of street sweeping to the City’s clean air and water initiatives. Dirt in roadways has been identified as a major contributor to Maricopa County’s designation as a PM-10 Non-Attainment Area. In order to address this issue, special attention must be given to PM-10 areas of concern. In addition, the City must remain in compliance with the federal MS4 Permit which regulates discharges into municipal storm sewer systems, and regular street sweeping is a major factor in maintaining compliance. Street sweeping staff must be sensitive to these issues and responsive to the special activities that are required. The Maricopa Association of Governments (MAG) contributes over $200,000 for each PM-10 compliant street sweepers that the City purchases. Street sweeping operations that do not fulfill regulatory requirements could result in a loss of MAG funding and potential fines for non-compliance with federal clean air and stormwater mandates. Therefore, staff determined it would be prudent to conduct a pilot project for possible street sweeping outsourcing in one area in order to determine if mandates can be met. The downtown street sweeping operation was chosen for further analysis for possible outsourcing because it is the smallest and simplest operation.

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OTHER INFORMATION Staff researched street sweeping operations in three similarly sized cities: Dallas, San Diego, and Tucson. It was discovered that all three utilize both city employees and contracted firms in different areas of their operations.

City Local Street Sweeping

Major Street Sweeping

Downtown Street Sweeping

Dallas Not Swept Outsourced Municipal

Employees

San Diego Municipal

Employees Municipal

Employees Outsourced

Tucson Municipal

Employees Municipal

Employees Outsourced

Two of the surveyed cities, San Diego and Tucson, currently outsource downtown street sweeping operations. The City of Phoenix sweeps the downtown area nightly, providing a valuable service for the businesses and residents of the downtown area. The equipment is also available during daytime operations for back-up to cover break-downs, or to assist in meeting the sweeping frequency required to adhere to federal standards. Staff analyzed the risks and benefits of outsourcing street sweeping operations. Depending upon the results of a competitive bid, there could be a financial benefit to outsourcing street sweeping operations, but there is also a risk of a greater cost to the City through the loss of federal revenues and/or enforcement of fines. Given the risk of noncompliance and uncertainty about potential cost savings, it would be prudent to conduct a pilot street sweeping project prior to larger scale outsourcing of this critical function. Downtown street sweeping was chosen as the pilot project area, although outsourcing of this particular area is not expected to yield significant cost savings. Through this process the department would first issue a Request for Proposals to determine the lowest price from a technically qualified private sector vendor to perform the service. If that cost proposal by the lowest cost responsive private sector operator exceeds the City’s cost for performing this service, which includes a City employee operator, equipment maintenance and overhead, then the pilot will not proceed. If the proposed cost is less than the City’s cost, then the pilot program project would continue with a one-year field trial. In addition to potential cost savings, the field trial portion of the pilot project will demonstrate whether or not private sector vendors have the technical capability to sweep the City’s streets in compliance with regulatory requirements cited above. RECOMMENDATION Staff requests that the Finance, Efficiency, and Economy Subcommittee recommend approval to begin a one-year pilot outsourcing initiative for the Street Transportation

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Department downtown street sweeping operations. If approved, staff will proceed with issuing a Request for Proposals and return to the Subcommittee and Council with the results of that process.

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CITY COUNCIL REPORT

TO: David Cavazos, City Manger

Rick Naimark, Deputy City Manager

FROM: John A. Trujillo

Acting Public Works Director

John M. Chan

Community and Economic Development Director

SUBJECT: REQUEST FOR PROPOSALS FOR A RESTAURANT IN CALVIN C. GOODE BUILDING

This report requests the Finance, Efficiency and Economy Subcommittee recommend City Council approval to issue a Request for Proposals (RFP) for a restaurant in the Calvin C. Goode Building. THE ISSUE At the request of the City Manager’s Office, staff from Community and Economic Development (CEDD) and Public Works have begun an assessment of the feasibility of a restaurant on the first floor of the Goode Building. The Goode Building is a 10-story, 50-year old City facility that houses the following City departments/operations: 1) Equal Opportunity, 2) Finance, 3) Housing, 4) Information Technology Services, 5) Police Central Monitoring Station and 7) Public Works Badging/Alarm Services. A cafeteria, operated by the Arizona Department of Economic Security Center for the Blind and Visually Impaired, is located on the 10th floor. The cafeteria operations contract is for 13 years, and it will expire in 2026. OTHER INFORMATION An area approximately 3,100 square feet on the interior east side of the first floor could be used as the location for a restaurant. There is an additional area of approximately 1,476 square feet of exterior patio space on the north and south sides. This space is sufficient to accommodate a variety of restaurant options, ranging from a full-scale restaurant to a kiosk operation. [SS1] While the space exists to accommodate a restaurant, three issues need to be addressed to achieve success: 1) building improvements required by code for a restaurant operation in this location, including fire/life safety, HVAC, electrical, plumbing and additional restrooms; 2) restaurant compatibility with other uses in the building; 3) the economic viability of a restaurant at this location. Staff recommends that a Request for Proposals be issued to determine the private sector interest in a restaurant at this location and, if so, under what terms. The RFP

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scope would: 1) offer proposers a broad range of restaurant options, from a kiosk to a full-scale restaurant; 2) require proposers to identify the required improvements, costs and funding sources; 3) require proposers to identify the proposed lease terms; 4) require proposers to identify operational/security protocols; and 5) other provisions to be determined. RECOMMENDATION Staff requests the Finance, Efficiency and Economy Subcommittee recommend City Council approval to issue a Request for Proposals (RFP) for a restaurant in the Calvin C. Goode Building.

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CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager



SUBJECT: SOLID WASTE PROGRAM STUDY UPDATESOLID WASTE PROGRAM STUDY UPDATE

This report provides information to the Finance, Efficiency, and Economy Subcommittee

on the progress of the Public Works Solid Waste Program Study, approved by City Council on January 16, 2013. THE ISSUE The City of Phoenix has established a goal to divert 40 percent of solid waste by the year 2020. This study focuses on diversion of municipal solid waste (MSW), which is collected by and delivered to the City’s transfer stations and landfill. OTHER INFORMATION Currently, the City operates diversion programs through the Public Works Department’s Field Services, Special Projects and Disposal divisions (transfer stations and landfills). Fiscal Years 2011-2012 and 2012-2013 were evaluated in the program study to incorporate new, recently piloted diversion programs that have demonstrated significant diversion reduction impact. Current and piloted waste diversion programs are as follows:

• Residential curbside recycling • Material harvesting at transfer stations • Green organics collection from bulk trash • Community clean-ups • City facility recycling • 220 Household Reduction Diversion Pilot Program • On-Call Bulk Trash Pilot Program • Curbside Green Organics Collection Pilot Program • Commercial green organics diversion • Mini combined garbage and recycling processing system at 27th Avenue Transfer

Station With the current diversion efforts in place, approximately 15.9 percent of solid waste will be diverted by the end of FY 2012-13. In order to achieve the 40 percent diversion goal, the City retained a consultant, SAIC, to develop a broad list of potential solid

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waste alternatives based on current operations, industry standards and successful diversion programs implemented in other U.S. cities with high diversion rates. Several of the alternatives recommended by SAIC were selected to be included in a short-term strategy for implementation over the next two to three years to help the City progress toward the 40 percent diversion goal by 2020. The short-term strategy includes:

• Implementation of a fee structure that encourages source reduction and recycling efforts by offering a tiered rate structure for different sized carts used for residential solid waste collection.

• City-wide, curbside, weekly collection of containerized green organics, offered to all single-family residential customers on a subscription basis.

• Replacement of the current bulk and brush collection program with two on-call collections of separated bulk items and brush per residence each year.

• Increase in expenditures for outreach, education, and compliance to encourage residents to participate in diversion programs and set out materials for collection in a way that ensures cost-effective collection and diversion.

The short-term strategy is projected to enable the City to divert between 22 and 27 percent of the total MSW that would otherwise be sent to the City’s transfer stations and landfill as indicated in Table 1. The projected diversion rate for this short-term strategy suggests that the City could make significant progress toward the 40 percent goal by implementation of the alternatives.

Table 1

Projected Diversion from MSW Delivered to Transfer Stations with Short-Term Strategy

Baseline Low High

Residential Recyclables 83,579 130,933 168,544

Additional Diversion at Transfer Station 47,903 47,903 47,903

Diversion from City Facilities 2,965 2,965 2,965

Total Diverted 134,447 181,861 219,412

Total Disposed 709,376 640,733 594,691

Percent Diversion from MSW Delivered to Transfer Station 15.9% 22.1% 27.0%

Change from Current Diversion Estimates 6.2% 11.0%

As the program study concludes and financial projections for service alternatives are finalized staff will present to the Finance, Efficiency, and Economy Subcommittee in the fall. In order to achieve at least 40 percent diversion by 2020, a long-term strategy will require additional facilities or programs. Staff will return to the Subcommittee at a future meeting with additional recommendations to meet the long-term diversion goal of 40 percent by 2020. RECOMMENDATION This report is for information and discussion only.

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CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager



SUBJECT: SOLID WASTE & RECYCLING HAULER PERMIT

This report provides the Finance, Efficiency, and Economy Subcommittee with information on the development of a City of Phoenix solid waste and recycling commercial hauler permit and reporting program. THE ISSUE Arizona Revised Statutes 49-746 A and B, identify a municipality’s authority to prescribe rules for the delivery of recycling services and commercial or industrial solid waste management services within its boundaries. The City of Phoenix currently does not require a solid waste and recycling permit for haulers, nor does it prescribe rules for waste and recycling collections. All non-hazardous solid waste collection and disposal services are required to hold a valid permit per Chapter Two, Section Five of the Maricopa County Environmental Health Code. As of March 2013, there were more than 1,700 solid waste hauling vehicles were permitted in Maricopa County. OTHER INFORMATION The purpose of a municipal solid waste and recycling hauler permit is to prescribe rules for the delivery of solid waste and recycling services made within the city. City policies related to waste and recycling collection ensure the safety of residents and businesses, and help promote solid waste collection services focused on diversion. Most Phoenix metropolitan area towns and cities require a commercial hauler permit in addition to the Maricopa County permit. Local municipal permit requirements include an initial permit fee, which currently ranges from $200 to $16,500, and an annual vehicle license fee ranging from $200 to $1,000 per vehicle. Of the many permit programs, some programs require permitted commercial haulers to provide timely tonnage reports. Tonnage reports provide information regarding the number of customers’ serviced and monthly garbage and recycling tonnage collected. Collection data is vital to better understanding a city’s generation of garbage and recycling materials and can be used to gauge a city’s progress toward meeting solid waste diversion goals. Public Works staff is interested in pursuing the continued research and analysis of regional solid waste commercial hauling permit programs to develop recommendations

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for a City of Phoenix program. The permit program intends to prescribe rules for the collection of garbage and recycling to protect the safety and well-being of the community and its environment. The permit program will also allow the City to formally gather garbage and recycling tonnage data, which will be used to determine the City's progress toward meeting its 40 percent diversion goal by 2020. Upon a thorough analysis of regional and national commercial hauling permit programs and dialogue with private haulers, staff will present to the Finance, Efficiency, and Economy Subcommittee in the fall. RECOMMENDATION This report is for information only.

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CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: Lionel D. Lyons

Interim Human Resources Director

SUBJECT: 2013 ORGANIZATIONAL REVIEW PROCESS

This report provides information to the Finance, Efficiency, and Economy (FEE) Subcommittee regarding the City’s organizational review process for 2013. This report is for information only. BACKGROUND The organizational review process, coordinated by the Human Resources Department in close coordination with the Budget and Research Department, was initiated in 2010 and has been conducted annually for the past three years resulting in $12.8 million in savings and a reduction of over 175 full-time equivalent positions. This process is one component of the City’s larger innovation and efficiency efforts. During these processes, departments present options for streamlining services, flattening organizational hierarchy, and broadening span of control with the goal of improving services to residents by providing faster decision-making and enhanced organizational flexibility. Departments also seek to enhance customer service, assess outsourcing activities and explore right-sourcing opportunities, and ensure department initiatives are aligned with and support the City’s Strategic Plan. THE ISSUE The 2013 organizational review process will proceed on an advanced timeline. Meetings with departments will be completed in August with savings calculated by early September. Departments will be requested to continue their focus on streamlining services while still improving customer service, broadening span of control, and flattening organizational hierarchy. Outsourcing and right-sourcing opportunities and aligning department initiatives with the City’s Strategic Plan will also be included in this year’s process. Staff will return to the FEE Subcommittee with a report on the 2013 organizational process results and anticipated savings in September. RECOMMENDATION This report is for information only. No Subcommittee action is requested.

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CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: Gary Verburg

City Attorney

SUBJECT: IN-SOURCING RISK MANAGEMENT LITIGATION CASES

This report provides the Finance, Efficiency and Economy Subcommittee with an update on in-sourcing Risk Management litigation cases. This report is for information only, no action is required. BACKGROUND In January 2011, the Law Department proposed a pilot program to in-source litigation cases with liability less than $100,000 to the Finance, Efficiency and Economy Subcommittee (FEE). This program was approved by the committee in January 2011 and by the City Council on February 23, 2011. Since staffing levels and caseloads within the Law Department would not permit taking on the additional work, approval was given to incrementally hire additional staffing to implement this program. The first Attorney hired for this program started with the Department on August 22, 2011. On May 16, 2012 the Law Department returned to the FEE Subcommittee and received approval to implement Phase 2 of the program, which the Council approved on June 6, 2012. Phase 2 consisted of hiring one additional Attorney and one Legal Assistant which were hired on November 12, 2012 and February 18, 2013 respectively. This report provides an update of the results obtained in the twenty-one months since the first Attorney was hired on August 22, 2011. THE ISSUE Prior to the Law Department’s efforts to in-source litigation cases, the Department performed an evaluation of four years of Risk Management cases that were valued under $100,000 and assigned to outside counsel. On average, the City assigned approximately 77 cases annually within these parameters to outside counsel resulting in an average total of $2,235,000 in paid legal expenses per year ($29,000 per case). These cases generally fell within the categories of accidents, law enforcement, operations, premises and employment claims. The Subcommittee approved hiring additional staff to transition from the use of outside counsel to internal staff for the Risk Management cases described above. This transition would be phased in over a three-year period as described in the following implementation schedule along with the financial impact and potential savings.

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Financial Impact/ Potential Savings The table below outlined the positions and funding needed to implement a phased-in approach to in-sourcing litigation cases. Funding for these positions would be paid out of the Self Insurance Reserve Trust Fund (SIR) as this is where the savings from reduced outside counsel expenses would accrue. There is no general fund impact related to this request.

Position Phase 1 Phase 2 Phase 3

Asst City Atty IV $185,000 $185,000 $185,000

Asst City Atty IV - $185,000 $185,000

Legal Assistant - $80,000 $80,000

Asst City Atty IV - - $185,000

Legal Secretary - - $76,000

Total Cost $185,000 $450,000 $711,000

Potential Savings: Many factors could influence actual realized savings over the three-year implementation period. After the recruitment and hiring of new staff in each year, there will be a short period of time in which the new Attorney will build a caseload and become familiar with the City’s processes and procedures. The availability and assignment of new cases, the nature of the cases along with training and start up time will all have an impact on how quickly the savings will accrue. The potential annual savings which could be realized after the full implementation of each phase would be:

After Phase 1 After Phase 2 After Phase 3

Potential Annual Savings

$395,000 $710,000 $1,524,000

These savings figures represent the annual savings moving forward that could be realized once the Attorney at each phase assumes a full caseload of 20+ cases annually. RESULTS TO DATE With approximately twenty-one months of operation (only six months with two assigned attorneys), we have experienced the following results:

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Total Cases Assigned: 91 Total Cases Closed/Dismissed: 45 Plaintiff alleged damages in the 45 cases closed/dismissed: $111,138,807 Amount actually paid by the City in 45 cases closed/dismissed: $180,300 It should be noted that the Law Department did have the capacity to keep some cases with alleged damages in excess of $100,000 in house, which further contributed to the overall savings. Based on the original analysis that the City averaged $29,000 in legal expenses for each case sent to outside counsel, the following results have been realized in the twenty-one months since the program was implemented: Total Cases Assigned and Closed: 45 Cost Avoidance (# cases x $29,000): $1,305,000 Staffing Costs (August 2011 – May 2013): $408,227 Savings: $896,773 The total savings does not represent savings on the over 46 active cases still in progress. In addition to the savings directly associated with the In-sourcing program, the Law Department has made a conscientious effort to assign additional cases to in-house existing staff that were already dedicated to the Litigation Section, those cases were traditionally sent to outside counsel. So far to date in FY 2012, this totaled 40 assigned cases, with 18 cases closed. Total amount of alleged damages in the 18 closed cases was $26,207,957, with the amount actually paid being $575,340. These figures are substantiated by the fact that in FY 2011-12 the City spent $6,416,437 in outside counsel costs and is now projected to spend $4,989,757 in FY 2012-13. RECOMMENDATION This report is for informational purposes only, no action is required.

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Documents

NOTICE OF PUBLIC MEETING PHOENIX CITY COUNCIL …Dimitrios Laloudakis John Trujillo Rob Sweeney Aubrey Anaya Caitlyn Mitchell Pam Willier Felissa Washington-Smith Public Present Craig