HomeMy WebLinkAbout1998-08-04 City CouncilCity of Palo Alto-
City Manager’s Report
TO:HONORABLE CITY COUNCIL
ATTN:FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:AUGUST 4, 1998 CMR:330:98
SUBJECT:DRAFT SCOPE OF SERVICES FOR REQUEST FOR PROPOSAL TO
SOLICIT A CONSULTANT TO ASSIST THE CITY IN REVIEWING
THE IMPACT MEASURES USED IN THE MISSION DRIVEN
BUDGET
RECOMMENDATION
Staff recommends the Finance Committee review the proposed scope of services for the
selection of a consultant to assist the City in reviewing the impact measures used in the
Mission Driven Budget and direct staff to issue the Request For Proposal (RFP).
BACKGROUND
Policy and Procedure 1-10, directs that staffprovide the two Council Committees with a list
of budgeted projects forwhich consultant services costs will be greater than $25,000. Per
this policy, the identified consultant contracts for 1998-99, as described in CMR:291:98,
were forwarded to the Finance Committee for review on July 7, 1998. The Finance
Committee requested to review the scope of services for the selection of a consultant to assist
in a review of impact measures.
Mission Driven Budgeting (MDB) was implemented as a new and unique budgetary process
in fiscal year 1995-96. MDB integrates principles of management-by-objectives, program
budgeting, and performance reporting, emphasizing that resources are allocated based on
agreed upon missions. The achievement of the missions .is assessed based on success at
achieving predetermined levels of results, called impact measures.
CMR:330:98 Page 1 of 4
Impact measures are a concept of measuring performance that is unique to Palo Alto. Since
Palo Alto does not believe that impact measures are interchangeable with performance
measures, staff has struggled to create and refine strong impact measures for each
department. In addition, since MDB was introduced, Council has expressed concerns about
the usefulness of certain impact measures. Accordingly, as part of the 1997-98 budget, the
Council approved a $12,000 allocation towards professional assistance to help the City
improve upon its impact measures. As staff began the project, it became apparent that the
assistance required was greater than originally anticipated. Accordingly, as part of the 1998-
99 budget, the Council approved an additional allocation of $13,000 towards the review of
impact measures.
DISCUSSION
The attached scope of services is a request for a professional consultant with a background
in measuring the performance of local governments to assist staff in developing guidelines
for impact measures and recommending improvements to the impact measures currently used
in the City’s Mission Driven Budget.
As discussed above, when Mission Driven Budgeting was created in the mid 1990’s, the
decision was made to focus resources around the missions of the City, the departments, and
the specific activities in each department. The mission-based orientation means the budget
is oriented towards how the City is providing services that are visible to the community,
where results can be measured. There is frequently a conflict in developing a measurement
that focuses the readers’ attention on the mission of the activity being performed, while
lending itself to quantification and measurement. Council .and staff have struggled to refine
various impact measures and now feels that assistance from a creative, innovative consulting
firm will help facilitate the improvement of impact measures for the City.
The first and most important step of this process will be for the consultant to develop a
definition of an impact measure that is easy to understand and implement. This definition
will need to include some guidelines that staff can use to measure achievement of the
missions for each major activity~ Below are a number of comments from the Finance
Committee as the 1998-99 Proposed Budget was reviewed, regarding impact measures:
Impact measures should pass the "so what" test;
Impact measures should focus on the accomplishment of the mission related
to the major activity;
Impact measures should provide a sense of how the data is collected and
provide a measure of reliability;
CMR:330:98 Page 2 of 4
It should be easy to understand the terms used regarding what the impact
measure is measuring; and,
Impact measures should be adjusted to identify changing or changed
conditions.
A possible draft definition of an impact measure is:
An impact measure should be an indication of the continued or changed level
of expenditures by major ,activity, and how that expenditure relates to the
departments’ ability to achieve a mission through provision of the service or
activity.
Once the consultant has a working draft definition of an impact measure, the consultant will
need to apply the definition to create or modify impact measures for a small number of major
activities. Once this testing phase has been completed, staff is proposing to utilize three
departments, Police, Fire, and Administrative Services, to work with the consultant to revise
impact measures for 1999-2000. In the following year, the impact measures for the
remainder of the departments would be revised.
Two factors drive the recommendation to approach the project in phases. There are a number
of citywide initiatives currently underway in various departments in the City that are
projected to absorb significant stafftime. Secondly, only $25,000 has been allocated towards
this study, which will probably be insufficient to complete the project throughout all City
departments, depending on the breadth of its final scope. By phasing the project, the City
should get workable guidelines for impact measure improvement and experience in
implementation of these guidelines in several departments.
RESOURCE IMPACT
Funds for this project are available in the 1998-99 Administrative Services Department
operating budget.
TIMELINE
After Finance Committee review of the attached scope of services, the RFP will be revised
and issued by mid-August. Staff anticipates a consultant will be selected and will be able to
begin work by October, 1998. It is important that the consultant begin work in the early fall
so that any changes recommended can be finalized by early January. This will allow for
integration into the 1999-2001 Proposed Budget.
ENVIRONMENTAL ASSESSMENT
This is not a project under the California Environmental Quality Act (CEQA).
CMR:330:98 Page 3 of 4
ATTACHMENTS
Attachment A Draft Scope of Services for Selection of Consultant to Assist in a
Review of the Impact Measures Used in the Mission Driven Budget
PREPARED BY:Gigi Harrington, Budget Manager
Miki Caldwell, Senior Financial Analyst
APPROVED BY:
CITY MANAGER APPROVAL:
Director, ACdministrative Services
Assistant City Manager
CC: n/a
CMR:330:98 Page 4 of 4
Attachment A
Draft Scope of Services for Selection of Consultant to Assist in a Review of Impact
Measures Used in the Mission Driven Budget
Project Background
The City of Palo Alto implemented Mission Driven Budgeting (MDB) as a new budgetary
process in.fiscal year 1995-96. Under the concept of MDB, departmental budgets are divided
into areas of service provision called "functional areas." Each functional area contains
groupings of programs called "major activities." Mission statements were developed at each
of these levels: department, functional area and major activity. "Key plans" are used to
measure accomplishments at the functional area level, and "impact measures" are used to
measure the quantifiable results of each major activity. This format allows the City Council
and the public to review separate costs for individual activities (areas of services provision)
and to make decisions about the value of specific programs to the community.
Key plans are major projects or plans for a specific fiscal year, usually one-time in nature,
which set priorities for a functional area. Impact measures are ongoing and provide a measure
of results to be achieved in each major activity across fiscal years. These measures provide
employees with clear goals and objectives for the services they provide to other departments
and to the public. Evaluation of programs is based on the accomplishment of both key plans
and impact measures.
During the fiscal year 1998-99 budget process, the Council Finance Committee provided
feedback to staff on the information presented in current impact measures. Some of the
Committee comments were:
Impact measures should pass the "so what" test.
Impact measures should focus on the accomplishment of the mission related to the
major activity.
Impact measures should provide a sense of how the data is collected and provide a
measure of reliability.
Impact measures should define the terms used to eliminate confusion over what is
being measured.
Impact measures should be adjusted to identify changing or changed conditions.
Impact measures should provide some background as to the significance of an
accomplishment.
Based on Finance Committee input, the objectives ofthis study are to develop a definition of
an impact measure, to develop guidelines for staff to revise impact measures, and to assist
specific departments in the development of impact measures.
Scope of Work
Phase 1
Working in conjunction with the Budget Division, the consultant will review the draft
definition of an impact measure below and recommend revisions to clarify the definition for
use by a layperson.
A possible draft definition of an impact measure is:
An impact measure should be an indication of the continued or changed level of
expenditures by major activity, and how those expenditures relates to the departments’
ability to achieve a mission through provision of the service or activity.
The consultant will also review the cun’ent budget structure, mission statements and impact
measures, and develop guidelines for the improvement of impact measures. Revised impact
measures should:
Focus on the accomplishment of the missions,
¯Be easily understood by the layperson,
°Define the accomplishment of objectives in easily measurable terms,
°Present information on the value of each program to the community and,
.Translate the funding levels into the service levels provided by the City.
Phase 2
In conjunction with the Budget Division and representatives from the Police, Fire, and
Administrative Services Departments, the consultant will:
°Review budgets of the three selected departments and make recommendations for the
implementation of the citywide impact measure guidelines developed in phase 1.
2
Facilitate the implementation of impact measure guidelines in the three selected
departments.
Ensure that impact measures relate to mission statements throughout these three
departments.
Ensure that measurement criteria provide meaningful information concerning the
value, quality and effectiveness of services that are provided to other departments,
citizens and other consumers of City services.
Ensure that measurement information collection is realistic and can be compiled in an
efficient manner.
Phase 3
Work with the remaining City departments to facilitate the implementation of impact measure
guidelines developed in phase 1.
City issues RFP:
Optional Bidders Conference:
Target Schedule
The following are approximate key dates for this study:
August 11, 1998
Tuesday, August 18 at 1:30 p.m. in the Council Conference
Room, first floor of City Hall, 250 Hamilton Avenue,
Palo Alto, CA
Proposals due:
Award of Contract:
Tuesday, September 1, 1998
October 2, 1998
Progress Reports:
Meetings:
Weekly, upon project initiation, Oct. 12, 1998
Upon request by either party
Phase 1 to Budget Manager:
Phase 2 draft of impact measures
in test departments:
Phase 2 complete:
Phases
Four weeks from project initiation
November 30, 1998
December 7, 1998
Responders should provide two separate bids, one to accomplish phases one and two and one
for phase three.
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