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HomeMy WebLinkAbout2005-12-07 Utilities Advisory Commission Summary MinutesCITY OF PALO ALTO Utilities Advisory Commission Minutes Approved at March 7, 2006 UAC Meeting SPECIAL MEETING & STUDY SESSION Meeting Minutes 12/07/2005 I. ROLL CALL The Utilities Advisory Commission meeting was called to order at 6:15 p.m. on December 7, 2005. Those in attendance were: George Bechtel, Dexter Dawes, John Melton, Dick Rosenbaum, and Marilyn Keller. Also in attendance were Bern Beecham, Frank Benest, Emily Harrison, and Carl Yeats. II. ORAL COMMUNICATIONS Mr. Herb Borock spoke on the topic of this meeting not being taped or recorded. III. NEW BUSINESS Commissioner Bechtel turned the meeting over to Frank Benest who distributed the attached handout titled “Utilities Restructuring Plan.” Mr. Benest discussed the goals and timelines for the restructuring. The restructuring core team will consist of the following; Frank Benest (lead), Emily Harrison, Carl Yeats, Russ Carlsen, Gary Baum, Mike Miller, Glenn Roberts and Sharon Erickson (as needed). Mr. Benest shared the purpose and problems this restructuring hopes to address. He stated there has been a lack of adequate oversight and supervision of the Operations and Engineering Divisions and also poor communication and coordination between the Utilities Divisions and between the Utilities Department and other departments. The escalating costs of commodities and key capital projects are putting great stress on rates over time As complexities of Utilities business has increased in the last five years, there is a question of whether span of control is too great within the Utilities Department and this restructuring effort will take a look at other Utilities to see what is working for other cities. Benest also stated that a majority of top managers and key staff in Utilities are eligible to retire in the next five years and there is no succession plan in place; serious recruiting and training issues need to be addressed. Ms. Harrison has been and will continue to focus on Engineering and Operations while Carl Yeats will focus on Administration, Admin and Customer Services and Resource Management. The Risk Oversight Committee will continue to expand the role they play in our business decisions. We will continue to solicit employee input. While E&O has been going through extensive training, more needs to be CITY OF PALO ALTO Utilities Advisory Commission Minutes Approved at March 7, 2006 UAC Meeting done. We will improve communications between divisions and between Utilities and other departments. As an example, Ms. Harrison stated this is the first time Public Works and Utilities have been able to freely discuss the Public Works audit on the street resurfacing program. We have major CIP projects we need to keep on track. Budget issues include the fact that Engineering and Operations have had the same base budget for the past 7 – 8 years while labor and material costs have continued to increase. Mr. Yeats told the Commissioners they could expect a progress report back to them at the March UAC meeting. Tomorrow morning the executive staff will meet with ASD and Utilities staff for an all-hands meeting. We will be looking at various operational issues for the Utilities such as; current trends in the industry, policy and procedural changes, sustainability, legal issues (i.e. City Charter and Muni Code), job descriptions, duplication of positions within the General Fund and Utilities and budgetary changes, and meet and confer issues. Commissioner Dawes said he is in the dark about specifics of past events in the City, is there any plans to open the books on the investigation? Without specific knowledge of events, it is hard to have a reaction to the restructuring plan. Benest said we will be working with our Legal department to protect employees basic privacy rights so how much information will be released will be for the courts to decide. Commissioner Dawes asked what the UAC role will be in this process and Benest replied that while personnel roles would not be proper, the Commission should identify issues they want the Core Team to look at. Some examples Benest spoke of are: Utilities Department carries sewage then the Public Works Department treats the sewage. WGW division deals with the pipes. These have been together since they are all underground pipes. Gas is totally different so does it make sense to have them lumped together. Functions duplication in Utilities; marketing and communication staff in the General Fund and in the Enterprise Funds, is there redundancy in these positions. What opportunities do we have to construct cost savings? Utilities or Public Works – who does street work? There are many issues such as this we will be looking at. Bern Beecham noted that a lot of these concerns are operational issues. Deciding how the City might restructure is to look at can we change the way we plan. The UAC has a long-term perspective. Dawes noticed that no Utilities personnel are included on the Core Team. Benest said the team will be working with many employees, Utilities included. Yeats and Beecham will be involved in strategic planning at the end of this month. CITY OF PALO ALTO Utilities Advisory Commission Minutes Approved at March 7, 2006 UAC Meeting Commissioner Rosenbaum asserted the UAC have never had anything to do with operations and they thought things were going very well. He said he is surprised that Mike Miller is involved with this project as he thought he was more a policy and procedure guy. Commissioner Melton said Palo Alto is a premier organization and he encourages the Core Team to consider we have a good model, have a bias towards keeping commodities working better than anywhere else in the State. Commissioner Keller advised the team to be actively looking to staff to be involved, including union staff as there will most likely be meet and confer issues. Chairman Bechtel expressed surprise at some of the assertions, such as training. He would want to make sure this doesn’t happen again and would like to have one or two Commissioners involved in some aspect of the process. He wants to make sure this business is not destroyed and advised hiring a business consultant to assist with this process. Mr. Beecham agreed with the comments about the quality of CPAU. If the span of control is too broad it can come back and bite you. The ultimate control has got to be good management. He stated he has a lot of faith in our Risk Management program and believes it is the best organization in California. He also advised to use due haste but not to go too fast. Do it – do it right. Commissioner Rosenbaum said many cities do their own finances. Melton shared an anecdote from a meeting with a NCPA consultant who said they couldn’t do anything to improve Palo Alto since we are the best in the state. Commissioner Dawes agreed that we need to be careful to do this and do it right. He feels that there will be an organization penalty to pay in a one year leadership lapse. Chairman Bechtel said the Commission would like to be involved in the interviews for the new Director. IV. ADJOURNMENT The next regularly scheduled meeting will be held on January 11, 2006 at 7 p.m. in the Council Conference room. Meeting was adjourned at 7:16 p.m. Respectfully submitted, Dee Zichowic Administrative Assistant City of Palo Alto Utilities