Five Pressing Recommendations Facing the City – 

On Monday, November 21, the Council will discuss the recommendations of the following committees, as well as the priority and timing of implementation:

• City Council Audit Subcommittee on Undergrounding
• Municipal Tax Review Committee
• League of Women Voters Undergrounding Task Force

The City Administrator identified the 5 most pressing recommendations facing the City:

1. gain greater control over personnel costs, specifically the cost of “fringe” benefits
2. Council adoption of fund balance objectives, specifically one for capital facilities and equipment replacement, beginning with the 2012-13 budget
3. a project manager for large capital and construction projects
4. addressing conflicts of interest for contractors used by the City, specifically the City Engineer.
5. ensure that the costs of any new commitments are fully understood, paid for out of user fee revenues and not the General Fund, and proposals structured to have little or no impact on the City’s budget.

Additionally, the following points were noted by the City Administrator:

1. recommends continuing the current moratorium on undergrounding until all recommendations of the LWV task force and the Audit Subcommittee have been implemented, especially minimal approval standards for districts and removing financial risk to the City
2. recommends not taking on any additional financial obligations until capital and facilities maintenance and replacement are properly funded
3. agrees, along with the Council and the MTRC, that extra funding must be approved by the voters to meet regulatory requirements of maintaining the sewer system
4. recommends reimbursement of the expenditure of Sewer Fund monies for the repair of Crest Road

Vice Mayor Chiang created a matrix of the recommendations.

Most Pressing Recommendations

1.  Gain greater control over personnel costs, specifically the cost of “fringe” benefits

• the Council has ordered staff to begin this process
• the importance is recognized of
• a two-tier retirement system
• employee contributions to costs of benefits and pension
• shielding the taxpayer from benefit cost increases

The report noted these mechanisms are needed given that Public Employees Retirement System (PERS) contributions are impossible to predict and the high level of expenditure already incurred.  Less expensive retirement packages have been requested from PERS, with a response expected by the end of November.

• 2% @ 60 for new miscellaneous employees
• 2% @50 and/or 3%@55 for new public safety employees

2.  Council adoption of fund balance objectives, specifically one for capital facilities and equipment replacement

This would be implemented as part of the 2012-13 budget.

3.  Hire project manager for large capital and construction projects 

The project manager would report directly to the City Administrator with copies of status reports automatically provided to the Council.  Although hiring a project manager will increase costs, the report notes the past practice of assigning the management of complex construction projects to Department Heads is not viable, and implementation is urgent given that the Council will be deciding on December 5th whether or not to embark upon “one of the largest construction projects to be overseen by the City”.

4.  Address conflicts of interest for contractors used by the City, specifically the City Engineer

A memo is attached from Public Works Director Chester Nakahara on restricting the City Engineer’s role to review of the work of other subcontractors and ensuring the integrity of the RFP process.  This will be discussed by the Council for Phase Five of the Sanitary Sewer rehabilitation project. 

5.  Ensure the costs of any new commitments are fully understood, paid for out of user fee revenues and not the General Fund, and proposals structured to have little or no impact on the City’s budget

The report notes “These issues are already in the spotlight with the discussion of the Moraga Canyon Sports Fields Project but will also arise in the years to come when other proposals for new facilities or programs are brought forward.”

Undergrounding Recommendations

It is the City Administrator’s recommendation that the moratorium on undergrounding projects stay in place “unless, and until, all of the recommendations of the CCASC and LWV have been acted upon by the Council”, especially minimum approval standards for these districts before any are allowed to proceed, and removing financial risk to the City in the event of significant cost overruns.

Municipal Tax Review Committee Recommendations

• One of the most important contributions of the MTRC was to urge the Council not to take on any additional financial obligations until we’ve properly funded capital and facilities maintenance and replacement.
• Staff and Council agree with the MTRC that the extra funding must be approved by the voters, If the City is to meet our regulatory obligations,
• The City Administrator will ask the Council to discuss and reconsider the expenditure of Sewer Fund monies for the repair of Crest Road when mid-year budget discussions are held at the second meeting in January, 2012. The League requests that the money spent to repair the significant storm damage to Crest Road in 2009 be reimbursed to the Sewer Fund and the City Admininistrator agrees.

Read the full report: City Administrator’s report on 3 Committees’ Recommendations

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