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HomeMy WebLinkAboutMINUTES - 01082008 - C.141 TO: BOARD OF SUPERVISORS =E s L _��_ Con(rrT( FROM: INTERNAL OPERATIONS COMMITTEE S - Costa ee o I�� DATE: DECEMBER 17' 2007 °o CCounty Spa O SUBJECT: RECAP OF COUNTY ADMINISTRATOR'S 2007 MANAGEMENT OVERSIGHT ACTIVITIES AND 2008 AUDIT PLAN SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: I. ACCEPT report on the management oversight activities of the County Administrator's Office during 2007. 2. CONCUR that management audit resources must be targeted as needed to address perceived or alleged problems in the operational practices or management of a department or program. 3. APPROVE the program of management audits and policy reviews proposed by the County Administrator for 2008. BACKGROUND: On June 27, 2000, the Board of Supervisors directed that each December, the County Administrator and Auditor-Controller report to the Internal Operations Committee on the proposed schedule of internal financial and management audits for the following year, including those studies requested by the Board of Supervisors. What follows is a discussion of the tools available to provide oversight and control of departmental activities, how those tools were employed by the County Administrator in 2007, and the plan for management oversight for 2008. The Auditor-Controller annual audit report will be delayed until February, due to the exigent need to complete the Comprehensive Annual Financial Report. .CONTINUED ON ATTACHMENT: YES SIGNATURE: _RECOMMENDATION OF COUNTY ADMINISTRATOR _t- ECOMME ION OF BOARD COMMITTEE PPROVE OTHER SIGNATURE(S): / ACTION OF BOARD Ot 6Q:: 2" APPROVE AS RECOMMENDED V OT R VOiTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE AYES: NOES: SHOWN. ABSENT: ABSTAIN: ATTESTED: JANUARY 8,2008 CONTACT: JULIE ENEA(925)335-1077 JOHN CULLEN,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR CC: INTERNAL OPERATIONS COMMITTEE STAFF COUNTY ADMINISTRATOR , BY� ,DEPUTY County Administrator's 2007 Management Oversight Activities and 2008 Plan December 17,2007 Internal Operations Committee Page 2 Management Tools. The CAO has a number of management tools and processes at its disposal to provide guidance on and control of the many diverse departmental activities that make up County services. These tools include policies and procedures as documented in County Administrative Bulletins, quarterly budget monitoring and forecasting, financial audits, ongoing program and strategic planning, daily problem solving, and the management audit. Judicious use of these tools can ensure appropriate levels of oversight and support to departmental operations, at the same time maintaining departmental focus on providing services. The Management Audit is designed to address perceived or alleged problems in the operational practice or management of a unit/division/department. As such, management audits are targeted as needed and not conducted on a routine or predetermined time schedule. A management audit may be initiated by a Board of Supervisors member, the County Administrator, or a Department Head. The proposal should include a clear statement on the perceived or alleged problem and the facts or circumstances surrounding the issue. Management Audit proposals initiated by Board members are normally referred to the Internal Operations Committee for its review and recommendation to the Board of Supervisors. Management Audit proposals from a department head or County Administrator are customarily initiated after consultation between the County Administrator and the Chair of the Board of Supervisors. Evaluation of management audit proposals generally consider such factors as the appropriateness of the management audit tool in addressing the particular issue; the severity and/or urgency of the issue; and the workload of the CAO and relative priority of the proposed audit, as compared to other activities. Unless otherwise specified by the Board of Supervisors, the scope and method of conduct of any management audit is defined by the County Administrator, recognizing that the scope may require adjustment during the course of the audit. The County Administrator will designate a management audit team to conduct the audit, consisting of members of his office and, as appropriate, representatives of departments and/or outside experts in the subject matter of the audit. The Management Audit Team presents its initial findings and recommendations to the County Administrator, who is responsible for appropriate follow-up. 2007 MANAGEMENT OVERSIGHT ACTIVITIES. The following management oversight activities were conducted by the CAO in 2007: Fiscal Health ■ OPEB(Other Post-Employment Benefits) Funding Strategy—While the County has paid for health care costs on a Pay-As-You-Go("Pay-Go")basis for over 40 years,the Board has publicly acknowledged the need to begin to partially pre-fund the benefit. The CAO assembled a special task force to study the OPEB liability challenge and formulate options for the Board to consider. On June 26,2007 the Board approved the County's Administrator's recommended funding strategy to address the OPEB liability. The County Administrator and his staff spent innumerable hours in preparing for and conducting OPEB informational sessions at locations countywide for County employees. In September 2007,the CAO facilitated the Board's selection of an irrevocable trust structure for funding County Administrator's 2007 Management Oversight Activities and 2008 Plan December 17,2007 Internal Operations Committee Page 3 of the County's OPEB cost obligation. The CAO will return to the Board for approval of the actual trust documents in January 2008. The CAO, with the assistance from the OPEB Benefit Design Task Force, issued an RFP and selected a firm to provide benefit design consultation services to help the County to design a benefit program to meet the Board's cost containment goals. ■ Budget Policy. The Board adopted a Budget Policy in November 2006. The purposes of the Budget Policy are to establish best practices for the County's budget process and to establish a requirement for preparation multi-year budget projections. Among other things,the Budget Policy requires the adoption of structurally balanced budgets and requires mid-year updates on budget status by department, with corrective actions presented to the Board within 30 days for any cost centers over budget. ■ Debt Management Policy- In response to Standard& Poor's recently issued Financial Management Assessment Criteria,the County Administrator recommended a County Debt Management Policy to the Finance Committee, who forwarded the policy to the Board of Supervisors for adoption. The policy establishes a Debt Affordability Advisory Committee and addresses comprehensive capital planning; planning and structure of County indebtedness; method of sale; refinancing of outstanding debt; credit ratings; and other debt management practices. The Committee has had its annual meeting and will release its 2007 report in January. ■ Reserves Policy. The Board adopted a General Fund Reserves Policy in January 2006. The Reserves Policy requires the County to maintain a General Fund balance equal to a minimum of 10%of General Fund revenues and an unreserved balance equal to a minimum of 5%of General Fund revenues. Reserves exceeding the minimum are applied only to one-time uses such as additional reserves or capital projects up to an amount equal to 2%of General Fund revenues. The reserves can be used only in emergency situations and only if accompanied by a Board-approved plan to restore reserves to the target levels. The County's audited financial report for Fiscal Year 2006/07 confirms compliance with the Reserves Policy,as the total General Fund balance was 11.6%of General Fund revenues and the unreserved portion was 9.3%. ■ Debt Issuance—The CAO engaged an outside consultant to audit the County's outstanding debt. As a result, the County achieved present value debt service savings of$8.0 million on the refunded securities. Through the Public Financing Authority, the County undertook a significant long-term debt transaction that provided$32.35 million of funds toward the project costs of a new District Attorney's headquarters building and a new Clerk-Recorder's building, the acquisition of the Concord Health Center and improvements to a Public Works Administrative building and the Pittsburg Health Center. ■ Budget Cabinet—The County Administrator established this cabinet in January 2006 to assist him in developing budget strategies. The cabinet comprises the Community Development Director, Auditor- Controller, Treasurer-Tax Collector, County Administrator, County Finance Director, Health Services Chief Financial Officer, and the Sheriff-Coroner and continues to meet monthly. The cabinet's motto is: "This year's solution shouldn't be next year's problem." County Administrator's 2007 Management Oversight Activities and 2008 Plan December 17,2007 Internal Operations Committee Page 4 Service Delivery/Efficiency ■ Health Care Reform—The County Administrator, with the assistance of the County's lobbyist and the Health Services Department,participated in state-wide discussions on the impact of health care reform on the County, assisted in the preparation of key talking points, and monitored the legislative process and ultimate veto of proposed legislation, AB8. Since that time, County Administration staff has continued to participate in State-wide policy and staff level discussions regarding the various health care reform proposals, including the Governor's proposal. These discussions have included health benefits to be provided, county share of costs, maintenance of effort, provider rates, and whether counties will be considered the employer for in-home supportive services. Changes in State health care financing could have a significant impact on County General Fund revenue and expenditures. ■ Corrections Reform and Juvenile Justice Realignment—The County Administrator authorized the Sheriff to engage a consultant to analyze local trends and characteristics that influence planning assumptions about future corrections,population projections, staffing levels, and the job classification system. Based on this information, the CAO and the Office of the Sheriff are working together to develop a strategic plan for Board consideration to host a secure State re-entry facility and to secure state jail bond funding for new local adult detention beds. We are also working with the Probation Department to finance the renovation of a newer unit in the old Juvenile Hall to house non-violent Department of Juvenile Justice (DJJ)detainees under DJJ realignment. ■ Facilities Life Cycle Investment Program/Deferred Maintenance Policy—In response to a request from the Finance Committee, the CAO recommended a Facilities Life Cycle Investment Program and issued an RFP to select a vendor to complete the first phase of the program—the facility evaluation. In December 2007, the Executive Summary was completed and presented to the Finance Committee. The CAO will work closely with General Services to comply with the Budget Policy items relating to facilities in developing recommendations for the FY 2008/09 budget. ■ East Bay Regional Interoperable Communications System Oversight—The CAO has for the last several years overseen the County's participation in a regional effort to coordinate fragmented communications systems that are nearing the end of their useful life. Technology now permits a unified coordinated communications system without sacrificing local autonomy. The challenge is to design a two-county interoperable system permitting emergency communication across agency lines, develop an equitable cost-sharing model to finance the system,and establish a permanent oversight body to manage the system. This effort has required many dedicated hours of meetings, research, and analysis on the part of County administrative and technical staff. ■ Municipal Services Review—In 2006, the CAO began a management review of the delivery of municipal services by the Building Inspection, Community Development,and Public Works departments. The review focused on interdepartmental coordination in providing services to the public and improving customer service. The review resulted in the establishment of specific goals, and implementation strategies and timelines. This initiative is a work in progress and the CAO provides regular status report to the Board's Internal Operations Committee. ■ Standard Procedures for Airport Projects—At the direction of the Board of Supervisors, the CAO in 2006 undertook a review of business practices at the County Airports. Working with County County Administrator's 2007 Management Oversight Activities and 2008 Plan December 17,2007 Internal Operations Committee Page 5 departments that provide support services to the Airports,the CAO developed recommendations for streamlining business practices and expediting the review of economic development proposals. These recommendations were accepted by the Board of Supervisors. Continuing from last year, the CAO Airport review has resulted in the establishment of a consistent team of staff from the Public Works (Airports and Real Property) Department, Community Development Department and County Counsel's Office who are developing standard procedures for Airport projects. These departments have assigned dedicated staff to work on Airport projects, which produce economic benefits for both the Airport Enterprise Fund and the County General Fund. ■ Information Technology Cabinet—The County Administrator established this cabinet in 2006 to identify,promote, and plan for the use of technology that will improve efficiency and effectiveness in delivering services. The cabinet comprises 10 department heads from diverse functional areas and is currently focused on timekeeping systems, imaging systems, e-mail systems, payment system, and electronic forms. The cabinet continues to meet bimonthly to review new automation proposals. ■ Automation of Board Agenda Process—In March 2007, the CAO proposed to the Information Technology(IT) Cabinet a project to automate the Board's agenda process. The IT Cabinet unanimously recommended to the County Administrator that this project be given a high priority for funding and implementation in recognition that the Board agenda process is critical to the mission of the County and that automation of this process benefits all County departments, the Board, and the general public. After a competitive recruitment, the Board authorized the CAO to contract with JCG Technologies for its AgendaQuick system. The CAO continues to work with the contractor and County departments to design the system and implement it in this County. ■ Electronic Small Business Enterprise(SBE) and Outreach Reporting—Reports are submitted by departments in the form of templates(one each for SBE and Outreach), which are returned the CAO and General Services Department electronically and then downloaded into their respective databases, which are then used to compile the semi-annual and annual SBE and Outreach Program reports. Formulas in both the templates and databases reduce the occurrence of errors. Simple macros to add or delete rows personalize the templates to each department's reporting needs. Detailed instructions and an exemption list were built into the templates to better assist the departments in the reporting process. Analyzing past reporting errors allowed us to build validation into the templates to prevent future errors. Specifically, departments cannot list contract amounts over program limits without an error message instructing them to "retry" and explaining why their entry was not allowed. A similar message prevents listing a total contract amount which is less than the total SBE amount. Blocking certain fields prevents departments from reporting information in areas reserved for General Services only. We also separated the amendments and renewals from both the SBE and Outreach report and created an entirely new Amendment and Renewal Report. The new electronic reporting saves staff time,reduces errors,and increases the overall quality and consistency in these program reports. ■ Legislative Monitoring and Advocacy Coordination—The CAO continues it coordinative monitoring, feedback, and response system with County departments to provide valuable information to our Board and legislative advocates to pursue needed legislation for the County and to protect the County from unfavorable legislative proposals. The CAO provides staff support to the Board's Ad Hoc Committee on Legislation and annually prepares the federal and state legislative platform for consideration by the Board. County Administrator's 2007 Management Oversight Activities and 2008 Plan December 17,2007 Internal Operations Committee Page 6 Oreanizational Development ■ East Contra Costa Fire Protection District—Based on the finding in Citygate's Master Plan Report and in cooperation with the Cities of Brentwood and Oakley, the County Administrator developed a work-group to discuss options to achieve the long-range master plan for the East Contra Costa Fire Protection District. The CAO continues to facilitate and provide fiscal analyses, research, and advice on alternative governance structures for discussions with East County leaders, firefighters, and the community to reach consensus or compromise on a fire service model for the future. ■ Housing Authority Board of Commissioner Meetings—The CAO's review of the Housing Authority resulted in changes to the Housing Authority's policies and practices in several program areas (this is still ongoing) and the establishment of a monthly meeting schedule for the Board of Commissioners providing more time to focus on operational issues and objectives. ■ Municipal Advisory Councils (MAC)Policy—As directed by the Board of Supervisors, the County Administrative staff worked with the Board's Ad Hoc MAC Committee on ensuring consistency in the operating rules and procedures of the MACS. The draft policy encompasses the issues of member appointments,term limits,alternate positions, membership size, committees, meeting location, frequency and length,training requirements, administrative staff support, funding, operating procedures, annual reports, names of MACS, and boundaries. The draft policy has been forwarded to all MAC members for their review, with a workshop December 18, 2007. The final policy is expected to be forwarded to the Board for its review and approval in early 2008. ■ Advisory Body Review—In March 2007, the Board of Supervisors requested the Internal Operations Committee to review the County's approximately 95 boards, commissions, and committees. The purpose of the review was to evaluate whether or not advisory bodies are working in a manner that is consistent with their mission in accordance with County goals and objectives; and if they receive an appropriate level of guidance and support. Following approval by the IO Committee of the work plan, CAO staff conducted a survey of Advisory Body staff. An Advisory Body member survey is currently in progress. ■ Administrative Policy and Procedure Review—The CAO identified key internal operating policies and procedures that have broad impact on all County Departments, and required development or updating. In collaboration with the centralized services departments and others, the CAO developed new Administrative Bulletins that clarify policy,procedures,and roles and responsibilities of employees and departments. These new policies and procedures will foster greater operational efficiency and consistency, and strengthen internal controls. In addition, so that Administrative Bulletins are more"user-friendly"and understandable, the CAO developed a new standardized format for the bulletins. The new format incorporates hyperlinks to detailed procedure/protocol specific to a single function. Administrative Bulletins in progress include: County Administrator's 2007 Management Oversight Activities and 2008 Plan December 17,2007 Internal Operations Committee Page 7 o Contracting with Community-Based Organizations and Community Rehabilitation Programs o Cash/Funds Receipts and Safeguarding Collection o Reasonable Accommodations for Individuals with Disabilities o Office Supplies and Products Purchasing o Expense Reimbursement In addition to these policies, the following three policies have been modified to capture current daily operational needs of the Departments, protect the County from unnecessary risk and liability, and increase central administrative oversight: 0 9/80 Flexible Work Schedule Administrative Bulletin—The offices of the County Administrator, County Counsel, and Auditor-Controller worked together to design a 9/80 flexible work schedule policy and procedure to ensure that practices are standardized and employees are fairly and consistently paid. The new schedule also allows represented employees to accrue compensatory time when a holiday coincides with their regularly scheduled day off. The new Administrative Bulletin was issued in November with an effective date of January 1,2008. A workshop for departments on implementation of the new policy and procedure was held on December 6, 2007. o Travel—The CAO updated the Travel policy to clarify standards,policy, and procedures in the review, approval, and reimbursement of travel requests. o Contracting for Special Services—The offices of the County Administrator, County Counsel, and Auditor-Controller worked collaboratively to update the County's"Guide to Contracts Administration"and clarify County policies and procedures regarding worker classification, need justification for special services (those services that cannot be provided by the County's workforce), and re-employment of retired County workers. While many strides have been made in this area,this effort is continuing. The new Guide is expected to be published early in 2008 with a follow-up staff workshop to be conducted shortly thereafter. o Single Purchases over$25,000—To implement policy adopted by the Board of Supervisors, the CAO issued a policy and procedures that increased oversight and review of purchases over$25,000 (CAO approval required over$25,000; Board of Supervisors approval over $100,000). Credibility Buildine and Public Education ■ Comprehensive Public Communications Program—With the addition of the Chief Communications Officer, we have developed a more robust public communications infrastructure including website enhancement, a Virtual Newsroom, a media monitoring and clipping service,press conference equipment for County meeting rooms, County Clips employee newsletter, and television programming. We also launched the "For Quality of Life"and "Ready, Set, Survive!"marketing campaigns to brand Contra Costa County as a great place to live and work,and to encourage citizens County Administrator's 2007 Management Oversight Activities and 2008 Plan December 17,2007 Internal Operations Committee Page 8 to prepare for emergencies. We have recently engaged a web consultant to redesign the County's Internet website and will be working on that project in 2008. 2008 MANAGEMENT OVERSIGHT PLAN The CAO plans to continue its practice of conducting studies and policy reviews to address concerns identified by the Board of Supervisors and which have broad impact on all County departments and to conduct targeted management audits to address specific problems or issues as the need arises. The most prominent issue that will require the attention of the CAO is containment and funding of other post employment benefits (OPEB) liability. Many of the issues overseen by the CAO extend over multiple years and we will continue to provide leadership on those issues and monitor related department activities. Another significant activity for 2008 will be to develop a labor negotiations strategy that allows us to continue management of growing compensation costs. The CAO plans to continue performing administrative bulletin reviews for the purposes of regular updating as well as address specific problems or issues as the need arises and laws or codes change. The entire formatting and process for updating may also be studied. This comprehensive review will encompass consideration of the following elements: adding new section(s), identifying a lead Department Head for each section, eliminating those that no longer meet a regulatory or operational need, combining bulletins on the same or related topics and moving bulletins between sections. Other policy systems will be studied to learn improved ways and exploration of helpful tools such as an updating checklist will be examined. In 2008, the CAO intends to complete the Administrative Bulletins in progress as well as initiate/ promulgate new Bulletins on: ■ Countywide Information Security ■ Expense Reimbursement-New and prospective employees ■ Outreach Program- Construction ■ Small Business Enterprise Program