Memorandum
City of Lawrence
Administrative Services Department
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To: |
Dave Corliss City Manager |
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From: |
Frank S. Reeb Administrative Services Director |
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cc: |
Debbie Van Saun Assistant City Manager
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Date: |
April 13, 2007
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Re: |
2008 Budget Transmittal Memo
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This memo provides a brief budget overview and significant issues for the three divisions of the Administrative Services Department (City Clerk, Personnel, and Risk Management). With the exception of inflationary expenses as described in more detail below, we’ve submitted proposed budgets consistent with the City Manager’s direction to keep requested 2008 budgets at 2007 budgeted levels.
The City Clerk’s Office is requesting a 2008 budget of $185,480. This amount is $38,249 less than budgeted in 2007 due primarily to not having to fund City Commission election expenses in 2008.
As for significant issues, we continue to spend a significant amount of time completing the detailed, transcript-like City Commission meeting minutes. While the information in these minutes is very important and provides an historical record, there is a more efficient, more effective, and more accessible way to capture this information. As such, we have requested funds to purchase web-based software to video stream City Commission meetings on the City's website. A related module would also allow the City Clerk's Office to create meeting minutes and link them to the video. The software will also enable staff to index, integrate, and archive documents into the streaming media and for the public to access and keyword search such documents.
The audio/video of the meeting, combined with the linked meeting minutes, would provide a detailed record of the meeting as a replacement to the Clerk's description of what was said at the meeting. This process would not only save time in the Clerk's office to focus on other matters but would also provide greater public access to an integrated and searchable public record. Other departments that provide staff liaison for advisory boards such as Planning, Neighborhood Resources, and Parks & Recreations could also benefit because an audio record could be streamed and advisory board meeting minutes linked to those audio records.
The Personnel Division is requesting an overall budget of $698,129 which is $49,401 (7.62%) higher than budgeted in 2007. The overall increase is based on two items: (1) an increase in payroll costs as per the approved payroll projections ($39,464); and (2) the requested consolidation of all costs of regularly scheduled Employee Satisfaction Survey ($10,000).
Regarding the Employee Satisfaction Survey related increase, the $10,000 recommended increase is to consolidate the additional costs for additional reports and presentations paid by other City departments in 2005. In 2005, the Personnel Division paid for the survey ($16,650) and departments subsequently covered additional costs totaling approximately $10,000. In order to better understand and account for the total employee survey costs, we recommend all 2008 Employee Survey costs be budgeted in the Personnel Division budget.
As for significant issues, advertising costs for vacant positions, as in past years, are expected to increase by approximately 15% in 2008. In order to maintain 2008 Personnel line item advertising expenditures at the 2007 budgeted level, other City Department/Divisions will need to project and budget for additional advertising beyond the standard Careerbuilder.com website listing, Lawrence Journal World placement, and University Daily Kansan placements (for appropriate positions).
In addition to the Personnel Division budget, the Division is responsible for recommending the health care plan budget. Health care continues to be one of the significant issues for the City. Increases for the 2008 health care plan are expected to be 1.6%. Assuming there are no plan design changes, and assuming all Healthcare Committee goals are met, based on early cost projections, the City should budget a total of $6,365,947 for 2008. This amounts to an increase of $360,336 from 2007. Retirees and employees with family coverage will also be asked to increase their contributions.
Risk Management is requesting an overall budget of $652,782 which is an 8.3% increase from the 2007 budget of $603,011. Projected insurance premium increases of 5-15% make up the vast majority of this increase. The remainder of the increase is attributable to personal services and commodities.
Outside our detailed budget line items, we are recommending $550,000 be added to the workers compensation and general/auto liability fund reserve accounts (the same amount transferred in 2007). In 2006, workers compensation payments alone drew down $694,506.99 from our reserve funds. Much of that was the result of complex injuries and surgeries of our injured workers. You may recall in 2006, we eliminated specific risk management budget line items used to pay workers compensation and liability costs and instead transferred budgeted amounts directly to those reserve fund accounts. All claim payments are now made directly from those funds and any surplus at the end of the year helps build the fund balances. This strategy was implemented to help build fund balances to appropriate levels.
Inadequate staffing (FTE’s) of the Risk Management Division continues to remain our most significant obstacle and concern. The Division has remained at its current staffing level of 2.25 for 20 years (since 1987). Over this two decade period, the complexity of operations and technology of the Risk Management function has dramatically changed. What 20 years ago was necessary to administer the City’s self-insured/administered programs, insurance portfolios, and liability issues has no resemblance to what it takes today. In addition, the number of City employees has more than doubled, and the City’s infrastructure has increased significantly. The current Risk Management staff is asked to provide more services but at the same staffing levels established 20 years ago.
Because of the need for additional staff, for over six years we have relied on part time temporary workers working at or near full time levels in an attempt to try to keep on top of necessary day-to-day operations. As a result, we have key functions and operations being performed regularly by part time temporary workers. Turnover due to part-time level pay and lack of benefits has also resulted in Risk Management becoming a training ground for quality administrative support candidates moving on to other full time regular positions within and outside the City. In addition, the Risk Manager must routinely perform clerical duties leaving little or no time for appropriate level work such as administration, loss control, and employee relations issues. At the request of a City Commissioner during our Department’s presentation of major issues one year ago, a preliminary inquiry was made through Charlton Manley, one of our brokerage firms, to determine the cost of potentially outsourcing a portion of the management of the City’s Workers’ Compensation Program to a Third Party Administrator (TPA). The preliminary quote estimated an annual fee of over $75,000. Utilizing a TPA would not eliminate the need for the continued collection and data entry of all claims information to upload to the TPA’s information system. Therefore, the actual reduction in tasks by the Risk Management staff would be moderate to minimal.
While we have annually requested one additional FTE for the Risk Management Division, we have now reached a level of task saturation that would support two additional FTE’s. For this reason, our Department’s highest priority Program Improvement is a request for, at a minimum, the part time temporary Administrative Support position to be recognized as the full time staff member it truly is.
Conclusion
We look forward to discussing our proposed budgets and significant issues with you. We believe the requested budgets and program improvements mentioned above continue to help meet City Commission goals and objectives by working to create and foster a safe, high-quality, progressive work environment and to allow City staff to be as productive as possible.