HomeMy WebLinkAbout2017-09-20 Policy & Services Committee Agenda PacketPolicy and Services Committee
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Wednesday, September 20, 2017
Special Meeting
Community Meeting Room
6:00 PM
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PUBLIC COMMENT
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Call to Order
Oral Communications
Members of the public may speak to any item NOT on the agenda.
Action Items
1. Discussion of Re-aligning Terms on the Architectural Review Board, the
Historic Resources Board, the Parks & Recreation Commission, and the
Planning & Transportation Commission and Other Board and
Commission Changes
2. Continuous Monitoring Audit: Overtime
3. Fiscal Year 2018 Audit Work Plan
4. Staff Recommendation That the Policy and Services Committee
Recommend the City Council Accept the Status Update of the Palo Alto
Animal Services Audit
Future Meetings and Agendas
Adjournment
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CITY OF PALO ALTO OFFICE OF THE CITY CLERK
September 20, 2017
The Honorable City Council
Palo Alto, California
Discussion of Re-aligning Terms on the Architectural Review Board,
the Historic Resources Board, the Parks & Recreation Commission, and
the Planning & Transportation Commission and Other Board and
Commission Changes
Recommendation
Staff recommends that the Policy and Services Committee recommend the City Council
adopt an Ordinance to:
1. Extend fall term end dates on the Architectural Review Board, the Historic
Resources Board, the Parks & Recreation Commission, and the Planning &
Transportation Commission to May 31 to create an annual Spring Board and
Commission recruitment for all regularly-scheduled Board and Commission
vacancies. Terms currently scheduled to expire in December 2017 would be
extended to May 2018;
2. Remove the requirement that the election of the Planning & Transportation
Commission chairperson and vice chairperson occur in November;
3. Add, “gender identity” to the Human Relations Commission’s jurisdiction;
4. Update Human Relations Commission language to include gender neutral
language; and
5. Update Parks and Recreation Commission language to reflect name changes in
Community Services Department divisions.
Staff further recommends the Policy and Services Committee discuss and potentially
provide additional direction addressing unscheduled Board and Commission vacancies.
Staff proposes that the next step is to prepare an Ordinance reflecting the Committee’s
direction on these matters for Council review and adoption in October.
Discussion
1. Extending Board and Commission Terms
Currently, half of the City commissions have terms that end May 31 (Library
Commission, Human Relations Commission, Public Art Commission and Utilities Advisory
Commission), while the other half (Architectural Review Board, the Historic Resources
Board, the Parks & Recreation Commission, and the Planning & Transportation) end on
December 15. To fill regularly-scheduled vacancies, the Clerk’s Office conducts
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recruitments and schedules Council interviews two times each year, in April/May and
November/December.
Staff proposes adjusting commission terms so that all regular terms end on May 31.
Terms currently scheduled to expire in December 2017 would be extended to
May 2018. There are several reasons for this recommendation.
First, aligning term end dates of the Architectural Review Board, the Historic Resources
Board, the Parks & Recreation Commission, and the Planning & Transportation to
coincide with those of other Boards and Commissions would move the recruitment
process away from Council Member elections, which are regularly scheduled in
November of even-numbered years.
With Board and Commission terms for all City Boards and Commissions ending May 31,
City Council interviews with applicants could be scheduled in April, prior to the Finance
Committee Budget Hearings typically scheduled in May. This would allow newly elected
Council Members four months to become more familiar with their new role serving the
community and the roles of each Board and Commission.
Second, similar to the Utilities Advisory Commission’s review of the Utilities Department
budget, the Planning and Transportation Commission reviews the Proposed Capital
Improvement Plan prior to the Finance Committee’s review each May. This proposed
term change would ensure that experienced Planning and Transportation
Commissioners participate in this review, rather than asking new Commissioners, with
only a few meetings of experience, to perform this duty.
Third, given the number of applications the City is likely to receive with a combined
recruitment, two nights of applicant interviews may be necessary. If needed, providing
two dates for interviews would likely increase the chance each applicant is able to
participate in the interview process.
2. Planning and Transportation Commission Election
The Planning and Transportation Commission (PTC) elects a chairperson and
vice chairperson each November. The PTC is the only commission where a date for
election of officers is specified in the Municipal Code. Resignations and other
unscheduled vacancies on the PTC can occur at any time. The current requirement that
PTC elections occur in November can prevent the PTC from having a full leadership
team if the chairperson or vice chairperson resigns any time other than November.
Removing this requirement would give the PTC flexibility to schedule officer elections as
needed to meet the Commission’s needs, in the same manner as all the other
Commissions.
3. Addition to Human Relations Commission Jurisdiction
In December 2016, the City Council adopted Resolution 9653, reaffirming the City’s
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commitment to a diverse, supportive, inclusive, and protective community. Adding
“gender identity” to the jurisdiction of the Human Relations Commission (HRC) will
clarify the HRC’s role in supporting community members’ gender identity.
4. Removal of Human Relations Commission Gendered Language
In line with Recommendation 3 to add “gender identity” to the HRC’s jurisdiction, Staff
recommends terms such as “chairman” in the HRC portion of the Municipal Code be
replaced with gender neutral terms such as “chairperson.”
5. Update Community Services Division Names
The Municipal Code Section pertaining to the Purpose and Duties of the Parks and
Recreation Commission contains references to old Community Services Department
division names. Staff recommends updating these references to reflect the current
names of each division.
Unscheduled Vacancies on Boards and Commissions
Resignations by Board and Commission Members and other scenarios occasionally
create unscheduled vacancies on Boards and Commissions. Municipal Code Section
2.16.070 provides the City Council the option of including an unscheduled vacancy in
the next scheduled recruitment or directing Staff to conduct a special recruitment to fill
the unscheduled vacancy. Either waiting until the next scheduled recruitment or
conducting a special recruitment can lead to positions remaining vacant for an extended
period.
Staff suggests the Policy and Services Committee consider the following options for a
potential recommendation to the City Council as alternative methods to make
appointments to unscheduled vacant terms:
A. Applications for consideration:
i. Staff could continue the current process of conducting a new recruitment
and these applications alone would be considered for possible interview
and appointment;
ii. Staff could bring forward applications for the respective body who were
not appointed during the previous recruitment, and who remain interested
in serving, for potential appointment; or
iii. Staff could also include any applications received since the close of the
last recruitment for potential appointment.
B. Interviews:
i. Staff could continue the current process of scheduling new interviews for
all applicants; or
ii. Staff could schedule interviews only for those not previously interviewed.
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C. Manner of appointment:
i. Council could continue the current process of reviewing applications,
conducting interviews and making all appointments, including to fill
unscheduled vacancies, by vote of the entire Council.
ii. Could authorize the Mayor to review applications, conduct interviews and
make appointments to unscheduled vacant positions;
iii. Council could create a Council ad hoc committee that would review
applications, interview applicants and make appointment
recommendations to the full Council, for the unscheduled vacancies.
Background
On September 9, 2013, Council adopted Ordinance 5208 realigning terms of Boards and
Commissions to create a biennial recruitment process, with terms of each body aligning
with either a spring or fall recruitment. Terms included in spring recruitments expired
on April 30 of various years and terms included in fall recruitments expired on October
31 of various years.
On March 9, 2015, Council adopted Ordinance 5311 realigning terms associated with
fall recruitments to expire on December 15 of various years. This change was initiated
to separate fall recruitments from the Council Member election cycle.
On October 19, 2015, Council adopted Ordinance 5354 realigned terms associated with
fall recruitments to expire on May 31 of various years. This change was initiated to
allow experienced Utilities Advisory Commissioners to review the Utilities Department
budget.
Department Head: Beth Minor, City Clerk
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CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR
September 20, 2017
The Honorable City Council
Palo Alto, California
Continuous Monitoring Audit: Overtime
In accordance with the Fiscal Year 2017 Annual Audit Work Plan, the Office of the City Auditor
has completed the Continuous Monitoring Audit: Overtime. The audit report presents one
finding with two recommendations. The Office of the City Auditor recommends that the Policy
and Services Committee review and recommend to the City Council acceptance of the
Continuous Monitoring Audit: Overtime.
Respectfully submitted,
Harriet Richardson
City Auditor
ATTACHMENTS:
Attachment A: Continuous Monitoring Audit: Overtime (PDF)
Department Head: Harriet Richardson, City Auditor
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Attachment A
Continuous Monitoring Audit: Overtime
September 6, 2017
Office of the City Auditor
Harriet Richardson, City Auditor
Steve Hendrickson, Management Specialist
Yuki Matsuura, Senior Performance Auditor
Attachment A
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Attachment A
Office of the City Auditor ● 250 Hamilton Avenue, 7th Floor ● Palo Alto, CA 94301 ● 650.329.2667
Copies of the full report are available on the Office of the City Auditor website at:
[insert web link]
OFFICE OF THE CITY AUDITOR
EXECUTIVE SUMMARY
Continuous Monitoring Audit: Overtime
September 6, 2017
PURPOSE OF THE AUDIT
The purpose of this audit was to determine if implementing a continuous monitoring process for
overtime could improve the City’s oversight and management of overtime for optimal resource
utilization.
BACKGROUND
While overtime use is a normal and appropriate expenditure for meeting workload demands, it needs to be
closely managed and monitored to ensure resources are used in an optimal manner. Continuous monitoring
involves management’s proactive review of data at regular intervals, often through an automated process, to
identify errors or other issues. The results help management identify areas where its procedures can be
strengthened.
REPORT HIGHLIGHTS
Finding: Implementing a
continuous monitoring
process for overtime in
the new Enterprise
Resource Planning (ERP)
environment can help
the City improve its
resource allocation and
utilization
(Page 4)
Government organizations should manage overtime costs effectively to ensure
scarce resources are used optimally. In FY 2016, the City about $7 million in
overtime to Fire, Police, Utility, and Public works employees. The City uses a
number of methods to manage, monitor, and report overtime expenditures. While
some of these methods provide valuable management information, methods are
decentralized, require duplicate and manual entry, and lack sufficient cost
information. It is also difficult to aggregate department overtime data into a
citywide view of overtime usage and costs. By implementing a continuous
monitoring process for overtime in the new ERP environment the City can provide
departments with better tools and data to monitor their overtime usage,
understand the root causes, and manage their workforce.
Key Recommendations:
Explore the potential of developing a continuous monitoring process to provide
more detailed information on overtime usage so that management can better
manage and control overtime costs.
Form a work group consisting of main end users and stakeholders to design
shared system capabilities and standardized overtime management processes
in the new ERP environment.
Attachment A
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Attachment A
TABLE OF CONTENTS
Objective ................................................................................................................................................. 1
Background ............................................................................................................................................. 1
Scope ..................................................................................................................................................... 2
Methodology .......................................................................................................................................... 2
Finding:
Implementing a continuous monitoring process for overtime in the new Enterprise Resource
Planning (ERP) system can help the City improve its resource allocation and utilization ................ 4
Recommendations .......................................................................................................................... 12
Appendix 1: Overtime Factors .............................................................................................................. 13
Appendix 2: Administrative Services Department’s Public Safety Overtime Analysis ......................... 14
Appendix 3: City Manager’s Response ................................................................................................ 15
ABBREVIATIONS
ASD Administrative Services Department
ERP Enterprise Resource Planning
FLSA Fair Labor Standards Act
FTE Full‐time Equivalent
FY Fiscal Year
HR Human Resources
IT Information Technology
Attachment A
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Attachment A
Continuous Monitoring Audit: Overtime 1
INTRODUCTION
Objective The purpose of this audit was to determine if implementing a
continuous monitoring process for overtime could improve the
City’s oversight and management of overtime for optimal resource
utilization.
Background The City paid about $7.9 million in overtime in FY 2016 for almost
125,000 hours of work. While overtime use is a normal and
appropriate expenditure for meeting workload demands, it needs
to be closely managed and monitored to ensure resources are
used in an optimal manner. Fire, Police, Utilities, and Public Works
Departments represent 95 percent of the City’s overtime cost, as
shown in Exhibit 1.
EXHIBIT 1
The City’s Overtime Costs* (in millions) and Hours* From FY 2012 through FY 2016
Department
FY2012 FY2013 FY2014 FY2015 FY2016
Cost Hours Cost Hours Cost Hours Cost Hours Cost Hours
Fire** $3.4 61,681 $1.8† 31,645† $2.6 46,021 $2.2‡ 39,479‡ $2.6‡ 47,866‡
Police $1.6 23,56 $1.5 22,339 $1.7 24,201 $1.9 26,188 $2.0 27,368
Utilities $1.2 22,735 $1.5 26,815 $1.6 27,749 $1.8 26,551 $1.8 26,289
Public Works $0.5 10,928 $0.5 10,545 $0.6 11,328 $0.7 11,591 $0.7 11,232
Others $0.2 6,287 $0.3 6,575 $0.3 6,235 $0.4‡ 8,950‡ $0.7‡ 11,796‡
Total $7.0 125,196 $5.6 97,919 $6.8 115,535 $6.9 112,760 $7.9 124,551
* Includes accrued compensatory time balances cashed out in accordance with City policies and labor agreements.
** Includes Office of Emergency Services. While City employees generally work 2,080 hours annually, Fire Department’s
line personnel work in shift, amounting to 2,912 hours annually.
† The decrease is primarily due to closure of Station 7 at the Stanford National Accelerator Laboratory (SLAC), elimination
of vacant positions that were being backfilled by overtime, elimination of the citywide minimum staffing requirements,
and implementation of a flexible staffing model as recommended by the fire utilization study.
‡ In FY 2015, 9.22 positions in the Fire Department that primarily support development related activities were moved to
the newly created Development Services Department (DSD). The overtime costs associated with DSD operations for FY
2015 and FY 2016 were $0.1 million and $0.3 million, respectively, and are included under Others.
SOURCE: City’s financial records
Attachment A
2 Continuous Monitoring Audit: Overtime
Continuous monitoring and data
analytics
Monitoring is one of the five components of an effective internal
control system.1 Monitoring involves evaluating results so
management can take corrective action as necessary to achieve
organizational goals and objectives. Continuous monitoring
involves management’s proactive review of data at regular
intervals, often through an automated process, to identify errors
or other issues, such as noncompliance; duplicate invoices and
payments; missed cost savings; and potential fraud, waste, or
abuse. The results help management identify areas where its
procedures can be strengthened. Data analysis software is often
used to efficiently access business data and to develop and
automate monitoring processes.
Scope We reviewed the City’s overtime monitoring processes and related
financial and operational data for FY 2016 for four departments
that represent about 95 percent of the City’s total overtime cost:
Police, Fire, Utilities, and Public Works. We focused on identifying
what data departments track and use to manage their overtime.
Methodology To accomplish our objective, we:
Interviewed staff from the Human Resources (HR),
Administrative Services, Police, Fire, Utilities, and Public Works
Departments to understand the City’s overtime monitoring
procedures, systems used, and relevant data.
Reviewed federal and California laws, City policies, and labor
agreements to understand the laws, regulations, and
requirements related to City employees’ overtime.2
Reviewed the City’s Operating Budget, staff reports, SAP data,
and other departmental records.
Researched best practices for continuous monitoring of
overtime.
1 Internal control is the system of processes that an entity’s oversight body, management, and other personnel implement
to provide reasonable assurance that the organization will achieve its operational, reporting, and compliance objectives.
The five components are control environment, risk assessment, control activities, information and communication, and
monitoring. See U.S. Government Accountability Office, “Standards for Internal Control in the Federal Government,”
Washington, D.C., 2014, p. 9, available at http://www.gao.gov/products/GAO‐14‐704G.
2 Labor agreements contain information about wages, hours, and fringe benefits, as well as the terms and conditions of
employment for classifications within the union or association's representation unit.
Attachment A
Continuous Monitoring Audit: Overtime 3
Compliance with government
auditing standards
We conducted this audit of Continuous Monitoring: Overtime in
accordance with our FY 2016 Annual Audit Work Plan and
generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We
believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
We would like to thank management and staff in the Human Resources, Administrative Services,
Police, Fire, Utilities, and Public Works Departments for their time, cooperation, and assistance during
the audit process.
Attachment A
4 Continuous Monitoring Audit: Overtime
Finding Implementing a continuous monitoring process for overtime in
the new Enterprise Resource Planning (ERP) environment can
help the City improve its resource allocation and utilization.
Summary Government organizations should manage overtime costs
effectively to ensure scarce resources are used optimally. In FY
2016, the City paid over $7 million in overtime to Fire, Police,
Utility, and Public Works employees. The City uses a number of
methods to manage, monitor, and report overtime expenditures.
While some of these methods provide valuable management
information, the methods are decentralized, require duplicate and
manual entry, and lack sufficient cost information. It is also
difficult to aggregate department overtime data into a citywide
view of overtime usage and costs. Implementing a continuous
monitoring process for overtime in the new ERP environment
would provide departments with better tools and data to monitor
their overtime usage, understand the root causes, and manage
their workforce.
Overtime use in City
departments is caused by a
variety of factors
Due to the nature of their job duties, government organizations
often use overtime to provide additional staff capacity and to
manage full‐time staffing needs. As shown in Exhibit 1 on page 1, a
majority of the City’s overtime costs are incurred by employees
from the Fire, Police, Utilities, and Public Works Departments.
Appendix 1 shows that use of overtime is influenced by a number
of factors, including service demands, resource constraints,
regulatory and contractual requirements, and various city policies.
As discussed below, these factors also influence when, why, and
where overtime is used.
Service demands are driven by requests for City services and
public expectation for the level and quality of services set by
public officials. Demands may also fluctuate depending on the
weather, economy, City initiatives or priorities, and other
external events. For example, winter storms could significantly
impact overtime of the Public Works Department staff, and
special events, such as dignitary visits, could impact overtime
of the Public Safety staff.
Resource constraints, including absences and vacancies due to
disability, required training, sick leave, vacations, and
recruitment challenges, require filling those positions with
Attachment A
Continuous Monitoring Audit: Overtime 5
other staff, often at overtime rates. Departments may also
have to hold certain positions vacant to meet budget reduction
targets, as the Police Department did in FY 2013 when it froze
six positions in traffic operations for one year and redeployed
those officers to field patrol.
Regulatory or contractual requirements significantly influence
how overtime is defined and when it is used. For example,
labor agreements outline work schedules and what constitutes
overtime, federal labor standards define who receives and
under what circumstances overtime is paid, and State workers
compensation laws restrict hiring of new employees to fill the
regular duty positions while employees are out on disability or
modified duties. Ongoing negotiation of a new Palo Alto
Stanford Fire Protection Agreement caused the Fire
Department to hold a number of sworn positions vacant to
absorb anticipated staffing reductions, which caused an
increase in overtime.
City policies guide staff to determine what level and quality of
services to provide and whether incurred overtime costs can
be recovered. For example, a majority of the overtime
expenses in municipalities are often incurred by public safety
departments to meet their minimum staffing requirements.
City policies may also define under what conditions overtime
costs can be recovered through service reimbursements or
through fee and rate charges.
To fully understand why overtime is used and how it can be
controlled requires consideration of detailed information and
context to identify the causes of overtime so management can
make strategic and operational decisions to control its use. In our
research, we found best practice examples of how organizations
can analyze overtime use and control costs:
Monitoring and contrasting overtime hours and expenses
incurred by similar work units can show outliers that identify
areas requiring attention. Explaining the underlying causes of
overtime growth could help decision makers understand
whether overtime cost increases are the result of additional
hourly use or increases in salary levels.
Monitoring overtime expenses by type of service, with related
fee revenues or reimbursement, would better inform the fee‐
Attachment A
6 Continuous Monitoring Audit: Overtime
setting or contract negotiation processes to improve cost
recovery.
Monitoring overtime hours by day of week and time of day and
comparing this to work schedules and shifts may provide
insights on how to change work schedules to increase or
decrease staff to better match service demands and reduce
overtime usage.
Monitoring overtime hours and vacancies by position may
identify a specific position with excessive overtime, thereby
alerting management of the need to expedite recruitment. For
example, public safety and utility dispatcher positions are
historically difficult to keep filled due to the combination of
demanding work schedules and required skills and expertise.
Tracking detailed vacancy data, such as number of days since
the position was approved to be filled, may inform the Human
Resource Department of the need for attention.
More detailed information on
overtime use can improve
workforce management
Therefore, to effectively monitor and manage overtime, the City
needs to first identify relevant data and establish a strong process
for recording, analyzing, and reporting the data to decision
makers.3 Implementing a continuous monitoring and data analytics
process would allow the City to set thresholds to automatically
trigger notification of anomalies, such as employees working more
than X hours of overtime. Supervisors and managers can take
immediate actions to address their overtime issues before they
become larger issues. Useful overtime data cited by the
departments we interviewed include:
Hours and expenses by cost center
Hours and expenses by employee
Hours and expenses by cause
Service output measures, such as calls for service and number of
service orders
Variance between the actual cost of overtime and the amount
billed and recovered
3 Monitoring is one of the five components of an effective internal control system. See U.S. Government Accountability
Office, “Standards for Internal Control in the Federal Government,” Washington, D.C., 2014, p. 70‐75, available at
http://www.gao.gov/products/GAO‐14‐704G.
Attachment A
Continuous Monitoring Audit: Overtime 7
The benefits of a comprehensive evaluation of City operations
have been demonstrated by the Fire Services Utilization and
Resource Study completed in January 2011. This study evaluated
the Fire Department with a view toward making recommendations
to improve its service delivery and efficiency. By implementing the
study’s recommendations to eliminate citywide minimum staffing
requirements and implement a flexible staffing model, the Fire
Department was able to reduce its overtime expenses in FY 2013,
as shown in Exhibit 1. A supplemental study, completed in January
2012, made additional recommendations specifically related to
Emergency Medical Services (EMS) operations and services
provided by the Fire Department.
Similarly, in 2013, the City commissioned the Utilities Department
Organizational Assessment. In this study, as well as in the Fire
Department studies, the consultants identified issues with the
City’s ability to collect and analyze data on its operations. The
departments have not been able to use the SAP system to
effectively implement certain recommended actions that would
facilitate improved data collection and analysis and workforce
management.
Current methods for monitoring
and reporting overtime have
limitations
The City’s SAP system captures limited overtime information
because it is not configured to provide certain functionalities.4 The
system captures overtime cost and number of hours, but does not
typically capture reasons of overtime in categories specific enough
to enable a complete understanding of why overtime was worked.
Employees record overtime on their timecards using various pay
codes, but the pay codes do not necessarily indicate the specific
reasons for the overtime. Although the City’s procedures require
employees to note the reason for overtime on their timecard, the
notes, where available, are not standardized to allow sorting or
extraction to be used for systematic analysis of the reasons.
Overtime hours recorded under service orders and work orders
may not be complete because the system does not validate entries
to prevent errors or omissions.
4 The City’s ERP system evaluation, completed in November 2014, identified various functional limitations in the City’s SAP
structure and processes. The evaluation results were presented to the City Council as a study session in February 2016. See
http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=7226.
Attachment A
8 Continuous Monitoring Audit: Overtime
In addition, the number and variety of negotiated benefits
included in labor agreements make accurate recording of the
specific type of overtime used complex and automation of
monitoring more challenging.
Departments typically monitor overtime and their workforce using
three types of SAP reports:
• Timecard report showing the number of overtime hours worked
by division, cost center, or employee
• Financial report showing the overtime expense by division or
cost center
• Vacancy report showing which budgeted positions have been
filled and when
Staff need to export each of these reports into Excel and manually
clean up the data to produce information that is understandable
and useful. Departments often maintain separate spreadsheets to
meet their informational needs.
Another limitation is that employees enter the number of total
overtime hours worked per day or shift, but not the start time or
end time. Not knowing the specific times when the hours were
worked limits management’s ability to understand what would
incur overtime, when, and how much it cost. For example, the
Utilities Department may have to schedule its work in downtown
after business hours if the work requires electricity to be shut
down. This would incur overtime, but the SAP system does not
capture the time of day when the overtime was worked. Such time
of day data may provide managers with helpful insight to forecast
overtime needs.
City departments have
developed decentralized systems
to manage overtime
Because the SAP system is not configured to provide detailed
information on overtime, departments developed various separate
methods to manage their overtime. For example, the Fire
Department implemented a separate scheduling software,
TeleStaff, to better manage its workforce, including overtime.5
Similarly, the Police Department implemented InTime/ISELINK,
another scheduling software, in its Technical Services Division.
These software applications are specifically designed for public
5 TeleStaff is not used to track overtime of Fire inspectors.
Attachment A
Continuous Monitoring Audit: Overtime 9
safety organizations and allow scheduling based on predefined
rules to ensure that assignments are consistently validated against
those rules. The rest of the Police Department, as well as the
Utilities and Public Works Departments, use various tools at their
division level, such as an overtime approval form, Excel
spreadsheets, and SharePoint, to schedule and track the reasons
for overtime. The Police Department and the Utilities
Department’s Water, Gas, and Wastewater Operations took those
spreadsheets a step further and developed an internal overtime
dashboard using Tableau visualization software and SharePoint,
respectively.
While decentralized departmental systems can be useful for
scheduling and managing overtime, they may not provide
sufficient and accurate information to minimize overtime
effectively. Exhibit 3 shows the primary causes of overtime based
on the records provided by the Fire and Police Departments. This
data provides good information on why overtime was approved
but little else that is useful to control the overtime, as explained
above.
EXHIBIT 3
Primary Causes of Overtime in FY 2016
Dept Primary Causes OT Hours %
Fire Meeting minimum staffing requirements* 43,844 83.4%
Foothills Fire Station #8 staffing during summer months 4,184 8.0%
Strike teams (mutual aid responses, fully reimbursed) 2,302 4.4%
Mandatory Training (instruction or off‐shift training) 2,080 4.0%
Special event (Stanford football games, offset by Stanford contract revenue) 173 0.3%
Police Meeting minimum staffing requirements in Communication* 7,602 30.3%
Special events (partially offset by Police Service Fees) 4,504 17.9%
Meeting minimum staffing requirements in Patrol* 3,162 12.6%
Held over due to a busy shift, report writing, or follow‐up work 2,810 11.2%
Crime investigations 1,714 6.8%
Mandatory Training 1,566 6.2%
Other (called out to a major incident, court, etc.) 3,756 15.0%
* To backfill for vacancies, disability, training, vacation, sick leave, and other leaves.
SOURCE: Department records
Attachment A
10 Continuous Monitoring Audit: Overtime
In addition, the Utilities and Public Works Departments do not
track data that can provide a department‐wide or division‐wide
view of what is causing overtime. They explained that this is
because their overtime is primarily tied to service orders or work
orders, and each order is recorded in either the SAP system or
Maintenance Connection, the City’s asset management software.
Although supervisors manage each service or work order with
overtime as one component, these departments currently do not
have the ability to collect, analyze, and forecast overtime needs
and determine optimal staffing levels in a single system.
The software or spreadsheets used by departments are not
interfaced to SAP timecards, resulting in inefficient business
processes. Employees have to enter or review schedule and actual
time worked in two separate places, and departments often have
to have another employee regularly reconcile the two to identify
unauthorized overtime or other errors. Such redundant data entry
and manual reconciliation processes are inefficient and can be
costly. Also, these manual workarounds are often highly
dependent on only one or two employees. As departments
experience turnover, knowledge of current procedures and
available tools may be lost, making their process prone to errors,
omission, or inconsistency.
Current overtime reporting is
limited to Public Safety and does
not provide sufficient insight into
root causes
The Administrative Services Department (ASD) includes in its
quarterly financial reports to the Finance Committee a section on
Public Safety’s overtime analysis, as shown in Appendix 2. The
Committee does not receive similar overtime information for other
departments, other than through the City’s budget documents.
ASD started reporting this overtime in 2004, in response to an
audit recommendation.6 The original report included a table
showing budgeted and actual overtime expenses for all General
Fund departments, explanation of significant budget‐to‐actual
variances, and five‐year analysis of Public Safety’s overtime. The
report changed to its current format in 2012, and no longer
includes overtime information for nonpublic safety departments.
The report has never included Utilities Department’s overtime
expenses, which comprises more than 20 percent of the City’s
total overtime cost.
6 Audit of Overtime Expenditures, issued by the Office of the City Auditor on November 18, 2003, available at
http://www.cityofpaloalto.org/civicax/filebank/documents/7260.
Attachment A
Continuous Monitoring Audit: Overtime 11
Additionally, the methodology for compiling the overtime analysis
is not always documented or disclosed, which limits the readers’
ability to interpret the numbers in a meaningful way. For example,
the number of days of department disabilities is reported using
one shift, which could be 24 hours for Fire and 10 or 11 hours for
Police, as one day, but this is not transparent to the readers.
Staff also rely on a manual, time‐consuming process of gathering
information from multiple departments to compile the report, due
to the SAP limitations described above. External entities reimburse
some of the City’s overtime expenses, but these reimbursements
are often recorded together with other revenues, and staff have to
manually segregate them to determine the amount associated
with overtime.
New ERP system is an
opportunity to collect and report
better information to manage
and control overtime
The planned procurement of a new ERP system is an opportunity
for the City to automate or streamline many of the existing manual
processes and implement integrated monitoring capabilities that
all departments can leverage to manage their overtime. Taking
advantage of this opportunity would require the City to identify
the kinds of information, reporting tools, and staff development
needs that would be useful to continuously monitor overtime in
the ERP environment, such as:
The types of overtime data, source of data, and reporting tools,
such as dashboards and drill‐down reporting capabilities, that
allow users to analyze pertinent overtime factors shown in
Appendix 1
Opportunities to automate manual data collection and other
related processes, such as reimbursements and billing for
overtime costs
Roles and responsibilities for collecting, monitoring, and
reporting overtime information
Training needs and ongoing requirements to maintain and
improve the system
Building internal staff capabilities to configure and administer
continuous monitoring of overtime in the ERP environment to
avoid relying on external contract services.
Implementing shared system capabilities and standardized
processes in the new ERP environment may disrupt operations
Attachment A
12 Continuous Monitoring Audit: Overtime
unless the changes are carefully managed. Staff may revert back to
the manual processes or develop new workarounds if the new
system limits their ability to do their jobs. Maximizing ERP
utilization requires a cross‐functional group of end‐users and
stakeholders with appropriate authority to identify common
business needs, improve processes, and enforce change and
conformity through communication and training.
Without a clear assignment of roles and responsibilities for
collecting, monitoring, and reporting overtime data, requirements
necessary for overtime management may not be completely
captured and defined in the City’s ERP contract, and may result in
needed capabilities not being designed, implemented, or
maintained.
Recommendations We recommend that the City Manager:
1. Explore the potential of developing a continuous monitoring
process to provide more detailed information on overtime
usage so that management can better manage and control
overtime costs. A continuous monitoring system could include
data analytics to extract data on service demands, absences
and vacancies, and elements of city policies and contractual
requirement that could be useful in identifying opportunities
to reduce overtime costs.
2. Form a work group consisting of main end users and
stakeholders to design shared system capabilities and
standardized overtime management processes in the new ERP
environment by:
Identifying useful overtime data including their source, and
user interface (e.g., dashboard with drilldown and reporting
capabilities) that allow users to analyze pertinent overtime
factors shown in Appendix 1 in a comprehensive manner.
Identifying manual data collection and auxiliary processes
(e.g., billing, reimbursement) that can be automated.
Reviewing applicable ERP system requirements to ensure
needed capabilities are included in the City’s ERP contract.
Attachment A
Continuous Monitoring Audit: Overtime 13
APPENDIX 1 – Overtime Factors
Attachment A
14 Continuous Monitoring Audit: Overtime
APPENDIX 2 – Administrative Services Department’s Public Safety Overtime Analysis
Attachment A
Continuous Monitoring Audit: Overtime 15
APPENDIX 3 – City Manager’s Response
Attachment A
16 Contunious Monitoring Audit: Overtime
The City Manager has agreed to take the following actions in response to the audit recommendations in this report. The City Manager will report
progress on implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been
implemented.
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree and
Target Date and Corrective Action Plan
Status
Finding: Implementing a continuous monitoring process for overtime in the new Enterprise Resource Planning (ERP) environment can
help the City improve its resource allocation and utilization.
1. Explore the potential of developing a
continuous monitoring process to provide
more detailed information on overtime
usage so that management can better
manage and control overtime costs. A
continuous monitoring system could
include data analytics to extract data on
service demands, absences and vacancies,
and elements of city policies and
contractual requirement that could be
useful in identifying opportunities to
reduce overtime costs.
ASD Concurrence: Partially Agree
Target Date: 4th Quarter 2018
Action Plan: ASD will work with departments that do
not have a separate system for tracking overtime to
explore the potential of developing a continuous
monitoring process for overtime. Depending on
system capabilities the process may partially address
this recommendation.
2. Form a work group consisting of main end
users and stakeholders to design shared
system capabilities and standardized
overtime management processes in the
new ERP environment by:
• Identifying useful overtime data
including their source, and user
interface (e.g., dashboard with
drilldown and reporting capabilities)
that allow users to analyze pertinent
overtime factors shown in Appendix 1 in
a comprehensive manner.
• Identifying manual data collection and
auxiliary processes (e.g., billing,
reimbursement) that can be automated.
• Reviewing applicable ERP system
ASD Concurrence: Partially Agree
Target Date: 4th Quarter 2018
Action Plan: ASD will work with departments that do
not have a separate system for tracking overtime to
determine shared needs for overtime in the new ERP
system. Depending on system capabilities the new ERP
system may partially address this recommendation.
Attachment A
17 Continuous Monitoring Audit: Overtime
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree and
Target Date and Corrective Action Plan
Status
requirements to ensure needed
capabilities are included in the City’s
ERP contract.
CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR
September 20, 2017
The Honorable City Council
Palo Alto, California
Fiscal Year 2018 Audit Work Plan
RECOMMENDATION
The Office of the City Auditor recommends that the Policy and Services Committee review and
recommend to the City Council approval of the Fiscal Year (FY) 2018 Proposed Audit Work Plan.
BACKGROUND
The Palo Alto Municipal Code requires the City Auditor to submit an annual work plan to the
City Council for review and approval. The proposed FY 2018 audit work plan is based upon
Council priorities, risk, and the City Auditor’s professional judgment. The attached report
presents the proposed audit work plan for FY 2018.
NEXT STEPS
As audit work proceeds, we will issue quarterly reports summarizing the status and progress of
each of the approved assignments. The quarterly reports will be issued to the City Council and
discussed with the Policy and Services Committee as defined in the Palo Alto Municipal Code.
Respectfully submitted,
Harriet Richardson
City Auditor
ATTACHMENTS:
Attachment A: Fiscal Year 2018 Audit Work Plan (PDF)
Department Head: Harriet Richardson, City Auditor
Page 2
Attachment A
Fiscal Year 2018 Audit Work Plan
Office of the City Auditor
“Promoting honest, efficient, effective, economical, and fully
accountable and transparent city government”
Attachment A
Fiscal Year 2018 Audit Work Plan 2
Overview
The Palo Alto Municipal Code requires the City Auditor to submit an annual audit work plan to the City
Council for approval. This proposed audit work plan represents ongoing administrative responsibilities
of the Office of the City Auditor, as well as required audit responsibilities. It estimates approximately
9,000 hours of direct time1 for six full‐time staff.
The proposed audit work plan considers risk factors that, if addressed, will provide opportunities to
mitigate those risks and improve operations:
Financial – Is there an opportunity to improve how the City manages, invests, spends, and
accounts for its financial resources?
Operational – Are City programs/activities performed and City services delivered in the most
efficient, effective, and economical manner possible, and do they represent sound business
decisions, including appropriate responses to changes in the business environment?
Regulatory – Do City programs and activities comply with applicable laws and regulations?
Health and Safety – Are City services delivered in a manner that protects our residents and
employees from injury or unnecessary exposure to factors that can affect an individual’s
health?
Information Security – Is City, resident, and employee information (electronic or physical)
protected against unauthorized access, use, disclosure, disruption, modification, inspection,
recording, or destruction?
In addition, the proposed audit work plan considers several factors:
Relevance – Does the audit have the potential to affect Council or City management decision‐
making or impact City residents?
Best Practices – Does the audit provide the opportunity to compare current performance to
best practices?
Return on Investment – Does the audit have the potential for cost savings, cost avoidance, or
revenue generation?
Improvement – Does the audit have the potential to result in meaningful improvement in how
the City does its business?
Actionable – Is it likely that the audit will produce actionable recommendations that are
feasible and practical?
Manageable – Is the audit scope narrow enough to ensure it is completed in a timely manner?
Staff Capacity – The number of audit staff hours available to do the work.
The audit work plan also considers risks related to major functions within the Utilities Department, as
identified through a 2011 Utilities Risk Assessment and a 2013 Utilities Organizational Assessment that
were conducted by external consultants, as well as prior audits.
1 The estimated hours consider available time after accounting for holidays, vacation, required training, administrative time, and a
position vacancy.
Attachment A
Fiscal Year 2018 Audit Work Plan 3
Nonaudit Services and Special Projects
The following table lists nonaudit services and special projects for the FY 2017 audit work plan:
Project Scope Planned Hours
Annual Performance
Report
Annual. The annual performance report provides the City Council, City staff,
Palo Alto residents, and other stakeholders with relevant information and data
regarding the performance of City programs, functions, and activities.
325
Annual Performance
Report Transition
One Time. Provide training and assistance to departments on how to develop
relevant and meaningful performance measures and work with the City
Manager’s Office to develop a reporting process in preparation for
transitioning performance reporting to the City Manager’s Office.
125
Annual Citizen
Centric Report
Annual. A four‐page report that highlights key financial data and data from the
annual Performance Report, and provides an overview of our City's economic
outlook. The Citizen Centric Report follows the Association of Government
Accountants' recommended format, which is designed to provide information
to the public about Palo Alto’s financial condition and performance in an easy‐
to‐understand and visually appealing format.
20
National Citizen
Survey
Annual. The National Research Center (NRC) conducts The National Citizen
Survey™ on behalf of the City of Palo Alto. The survey contains a series of
standardized questions that the NRC uses to benchmark Palo Alto residents’
opinions of City services against other jurisdictions, as well as several custom
questions. In addition to the NRC’s report, we tabulate the results in Tableau
software to allow users of the Palo Alto Open Data website to perform an
interactive analysis of the results (e.g., how people within different
demographic categories answered a question).
175
Custom Citizen
Survey
One Time. The City Council added $20,000 to the City Auditor’s FY 2018
budget to conduct, through the NRC, a one‐time custom survey that focuses
on code enforcement and the built environment, including housing. The NRC
will provide the raw data and we will summarize the results.
150
Sales Tax Allocation
Reviews
Ongoing. We identify misallocations and underreporting of local sales and use
tax through in‐house monitoring and a contract with an outside vendor
(currently MuniServices, LLC). We also look for opportunities to receive direct
allocation of sales and use tax on large commercial construction projects. We
report sales and use tax recoveries in quarterly reports to Council, and also
provide a quarterly sales and use tax information report which includes
information from MuniServices, LLC.
120
Fraud, Waste, and
Abuse Hotline
Administration and
Training
Ongoing. We receive notification of complaints filed through the hotline, reply
to the complainant, route and monitor cases for investigation, and convene
the Hotline Review Committee (City Manager, City Attorney, and City Auditor)
to determine the routing of cases and their closing upon completion of an
investigation. The hours include time to work with staff in Human Resources
(HR) to develop guidance for reporting issues to the hotline vs. the employee
advice line that (HR) is developing, as well as a module for the new employee
orientation.
75
Attachment A
Fiscal Year 2018 Audit Work Plan 4
Project Scope Planned Hours
Annual External
Financial Audit
Annual. The Palo Alto Municipal Code requires the Office of the City Auditor to
contract with an independent certified public accounting firm (currently
Macias, Gini, & O’Connell, LLP) to conduct the annual external audit of the
City’s financial statements. The firm also conducts the federally required Single
Audit. We coordinate those efforts between the Administrative Services
Department and Macias, Gini, & O’Connell, LLP.
30
Enterprise Resource
Planning (ERP)
Advisory Project
Ongoing. Provide advisory services to the Department of Information
Technology regarding its planning of a new ERP system.
300
Review and Monitor
the Implementation
Status of Prior Audit
Recommendations
Ongoing. Review and provide feedback to departments on their reports of the
implementation status of prior audit recommendations. We include a
summary of the status in our Quarterly Reports.
95
Office of the City
Auditor Quarterly
Reports
Quarterly. Prepare and issue quarterly reports to the City Council to provide
the status and progress toward completion of our annual work plan, as
required by the Palo Alto Municipal Code.
40
Advisory Roles Ongoing. The City Auditor is a nonvoting, advisory member of the Utilities Risk
Oversight Committee, the Information Technology Governance Review Board,
and the Information Security Steering Committee.
10
Total Hours for Special and Ongoing Projects 1,465
Performance Audits
The following audits from our FY 2017 audit work plan are in progress and will continue into the
FY 2018 audit work plan. The hours shown represent hours already used in FY 2018 and the additional
hours expected to be used in FY 2018.
Audit Department Audit Objective(s) Planned Hours
Utilities Customer
Service: Water Rate
and Billing Accuracy
Utilities
Department
Evaluate whether the Utilities Department properly
implements rates and accurately bills customers for water
services.
300
Analytic Development
and Continuous
Monitoring: Overtime
Citywide Determine if implementing a continuous monitoring
process for overtime could improve the City’s oversight
and management of overtime.
90
ERP Planning: Data
and System
Governance
Information
Technology
Evaluate the adequacy of data and system governance in the
current SAP system and make recommendations to ensure
that any identified deficiencies are corrected for the new
ERP system.
650
ERP Planning:
Segregation of Duties
Information
Technology
Evaluate the adequacy of segregation of duties for various
activities in the current SAP system and make
recommendations to ensure that any identified deficiencies
are corrected for the new ERP system.
650
ERP Planning: Data
Integrity, Reliability,
and Standardization
Information
Technology
A series of audits to evaluate the integrity, reliability, and
standardization of data in SAP and make recommendations
to ensure that any identified deficiencies are corrected prior
to transferring data to the new ERP system.
1,800
Attachment A
Fiscal Year 2018 Audit Work Plan 5
Audit Department Audit Objective(s) Planned Hours
Code Enforcement Planning and
Community
Development
Evaluate code enforcement policies and practices for
responsiveness, consistency, and follow‐up, particularly for
repeat offenders and complex cases.
1,000
Total Hours for In‐Progress Performance Audits 4,490
The following audits are proposed for the FY 2018 audit work plan; some of these may not be completed until
FY 2019:
Audit Department Preliminary Audit Objective(s)2 Planned Hours
Utilities: Accuracy of
Gas and Electric
Billings
Utilities
Department
Evaluate whether the Utilities Department properly
implements rates and accurately bills customers for gas and
electric services.
1,150
Contract Risk and
Oversight
Administrative
Services
Department
Develop a systematic, data‐driven process to identify high‐
risk expenditures and revenues that occur under formal
contracts. Audit selected high‐risk contracts to determine if
the City has received the goods and/or services it paid for
and/or the revenues to which it is entitled, that the contracts
are needed and do not result in unnecessary overlaps in
services, and that potential contract extensions are
appropriately disclosed in the original contract documents.
700
Nonprofit Services
Agreements
Various Evaluate whether nonprofit organizations that receive City
funding are achieving the outcomes we expect from the
funding we provide.
600
Business Registry
(limited scope)
City Manager Evaluate the rules and processes used to establish the
business registry and make recommendations to help clean
up the data and ensure accuracy in the future.
150
Public Safety:
Civilianization of
Sworn Positions
Police and Fire Evaluate if the City can reduce costs by converting certain
sworn public safety positions to nonsworn positions without
increasing risk to an unacceptable level. Audit will include
benchmarking with other public safety organizations.
450
Total Hours for New Performance Audits 3,050
Other Suggested Audit Topics Not Included Above
We have excluded topics from previous audit work plans that were not started and suggestions
previously received for other audit topics, which are listed below for which we do not have capacity to
do during FY 2018:
Utilities Asset Management
Utility Meter Routes
Utilities Staffing
Public Benefits
Procurement Processes
Mobile Device Usage and Security
Impact Fees
2 The preliminary scope and planned hours may change after completing the planning phase of the audit.
Attachment A
Fiscal Year 2018 Audit Work Plan 6
Payroll Processes
Facilities Management
Parking Assessment District
Transfer Development Rights
Planning Codes
Financial Condition Report
Long‐term Liabilities, Including Infrastructure
Analysis of Revenue vs. Expenditures and Reserves
City of Palo Alto (ID # 8494)
Policy and Services Committee Staff Report
Report Type: Action Items Meeting Date: 9/20/2017
City of Palo Alto Page 1
Summary Title: Status Update of Audit Recommendations for Palo Alto
Animal Services
Title: Staff Recommendation That the Policy and Services Committee
Recommend the City Council Accept the Status Update of the Palo Alto
Animal Services Audit
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends the Policy and Services Committee recommend that the City Council accept
the attached Status of Audit Recommendations for the Audit of Palo Alto Animal Services.
Background
The City Auditor’s Office previously issued an audit with objectives to determine the
appropriate areas of focus for the City Council and management based on Palo Alto resident
and animal shelter customer opinions regarding: a) the overall adequacy of Palo Alto Animal
Services (PAAS), b) demand for local animal sheltering services, and c) resident willingness to
financially support PAAS and improvements, including facilities. Additionally, a) whether there
are opportunities to increase PAAS revenues and decrease expenditures, b) whether Palo Alto
effectively and efficiently planned and executed upgrades to the PAAS facility in order to meet
sheltering goals and objectives and c) the appropriateness of PAAS’ organizational structure.
Discussion
The City Manager’s Office, Police Department and Community Services Department have
completed eight of the eight open recommendations. The recommendations and their status
are listed in the attached document.
On August 21, 2017 the City Council approved of a Letter of Intent with Pets In Need, a
Redwood City based animal rescue shelter, to develop a financing study including public and
private financing for a new animal shelter facility and committed up to $60,000 for the study.
The Letter of Intent also outlined a process and timeline for negotiating an operating
agreement and interim improvements for the current animal shelter. This action was a notable
City of Palo Alto Page 2
milestone in the City’s ongoing commitment to animal care services, thus leading to the
completion of many of the outstanding audit recommendations.
Attachments:
Attachment A - Status of Audit Recommendations
STATUS OF AUDIT RECOMMENDATIONS
POLICE DEPARTMENT: PALO ALTO ANIMAL SERVICES – ISSUED 4/22/15
PAGE 1
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
Finding: Palo Alto Animal Services (PAAS) faces challenges that are unlikely to be resolved if it continues operating as solely a city‐managed function without a significant
increase in general fund subsidy, donations, and/or revenue‐generating contracts
1. Recommend to the City Council that it make a
policy decision for management to explore
options, and based on the results, develop a
recommendation for the best approach for
retaining Palo Alto Animal Services as a
regional animal shelter facility.
City
Manager’s
Office
Concurrence: Agree
Target Date: April, May, and June 2015
Action Plan: The City Manager concurs with the
recommendation. The financial condition of the
animal services program along with the audit
finding and community feedback make it clear
that staff must explore a range of options. Council
direction to do so is not required—the state of
animal services is so dire‐‐ but near term and
ongoing engagement with Council and the
Finance Committee will be essential.
Completed August 2017 Management Update:
On September 9, 2016, City Council directed
staff to proceed with exclusive negotiations
with Pets In Need, to provide animal care
services and develop a plan for animal shelter
facility construction or rehabilitation. On
August 21, 2017, City Council approved a Letter
of Intent with Pets In Need to develop a
financing study including public and private
financing for a new animal shelter facility and
outline a process and timeline for negotiating
an operating agreement and interim
improvements for the current animal shelter.
Expected Completion Date: Completed
March 2016 Management Update:
On June 8, 2015 City Council approved the
Fiscal Year 2016 budget and directed staff to
conduct a review of alternative service models
including the allocation of $250,000 to assist
with the assessment and provide funding to
transition to a new model for service delivery.
In order to develop a recommendation for the
best approach, the City issued a Request for
Proposal for Animal Services and Shelter
Operations which is scheduled to close on
March 18, 2016.
Expected Completion Date: June 30, 2016
2. Identify and assign someone with
management skills to immediately begin
working at Palo Alto Animal Services to learn
the management side of the shelter
operations and carry PAAS through its
transition into the future after the acting
superintendent retires. This can be either a
City
Manager’s
Office
Concurrence: Agree
Target Date: July 2015
Action Plan: Due to the range of issues‐departing
staff, a losing business proposition in the current
form, facility conditions, and the need for more
capacity and agility in improving services and
Completed August 2017 Management Update:
The Palo Alto Police Department has promoted
the Lead Animal Control Officer as Acting
Superintendent. A Police Captain is also
assisting with day to day operations and
management support. Additionally the Sr.
Management Analysts from the City Manager’s
STATUS OF AUDIT RECOMMENDATIONS
POLICE DEPARTMENT: PALO ALTO ANIMAL SERVICES – ISSUED 4/22/15
PAGE 2
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
current or new City employee, but should be a
person with an understanding of the
challenges currently facing PAAS. The person
selected should be retained in the position
until a clear direction is developed regarding
the future of PAAS and the skills and
experience needed for a director or
superintendent position are known and
recruitment can take place, if appropriate. As
part of this process, determine whether to
temporarily move animal services to a
function under the Office of the City Manager
until a permanent decision is made regarding
the long‐term direction for providing animal
services.
raising funding, intervention and a “triage” based
near term approach is required. The City Manager
will share with Council how this near term
intervention leadership will be provided. Initial
discussion of directions can take place during this
Audit discussion, with more refinement during
the budget process with Finance in May. This
recommendation in conjunction with several
other recommendations in the audit will increase
city costs over the next year.
Office, Community Services Department,and
Police Department continue to play a key role
in operations and the public‐private partnership
with Pets In Need. Finally, the Assistant City
Manager, Deputy City Manager, Interim Police
Chief, Community Services Director, Human
Resources Director, and staff from their
departments are supporting the assessment
and audit recommendations. This staffing
model will continue until the operating
agreement with Pets In Need is approved by
City Council.
Expected Completion Date: Completed
March 2016 Management Update:
The City Manager’s Office has designated an
Assistant City Manager and Sr. Management
Analyst to provide leadership and
organizational support for departments
involved with assessment and ongoing
operations. As of this audit update, the City has
not received a retirement notice from the
current superintendent. In the event of a
retirement, the City Manager’s Office will
pursue an interim plan to staff the shelter with
a transitional manager. The decision to move
animal services will be decide within the post
RFP phase.
Expected Completion Date: June 30, 2016
3. Conduct a staffing analysis to determine an
appropriate staffing level to continue
performing shelter operations during the
transition period without the assistance of the
ACOs. Include an analysis of potential
expanded hours, including variations of
extended weekday, weekend, and holiday
hours and the potential increase in revenues
City
Manager’s
Office
Concurrence: Agree
Target Date: May 2015
Action Plan: This staffing analysis will be
conducted and appropriate recommendations
brought to Council as funding is needed.
Completed August 2017 Management Update:
As mentioned under No. 2, management has
completed the staff analysis for staffing during
the transition period. Management has also
decided to keep hours and schedule consistent
until the operating agreement with Pets In
Need is approved by City Council.
Expected Completion Date: Completed
STATUS OF AUDIT RECOMMENDATIONS
POLICE DEPARTMENT: PALO ALTO ANIMAL SERVICES – ISSUED 4/22/15
PAGE 3
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
as a result of expanded hours. Seek budget
funding from the City Council to hire the
appropriate staff based on the analysis and
recruit for the necessary positions.
March 2016 Management Update:
Tasks will be done as part of post RFP process
within the possible contract development and
negotiations with a new services provider.*
Expected Completion Date: June 30, 2016
After implementing Recommendations 1‐3:
4. Engage in discussions with nonprofit
organizations and/or other animal shelters for
strategies to operate Palo Alto Animal
Services or provide specific services that
would enhance current animal shelter services
under a long‐term partnership agreement
with the City, including potential assistance in
raising funds to build a new shelter. Present
the results to the City Council for a policy
decision on the direction to take for pursuing
either the long‐term future of PAAS, including
the possibility of continued general fund
support, or closure of the facility if no strategy
is feasible from both a financial and
operational perspective.
City
Manager’s
Office
Concurrence: Agree
Target Date: June 2016
Action Plan: Conversations with various entities
have occurred in some form over the past two
years. Conversations with representative
stakeholders are currently under way. The City
Manager believes that a new model is essential
for continuation and improvement of the animal
shelter in Palo Alto. This effort will occur
concurrent with the triage staffing
recommendations in 2‐3. Staff will have a better
schedule for timeline for Council discussion
before the Council summer break.
Completed August 2017 Management Update:
On September 9, 2016, City Council directed
staff to proceed with exclusive negotiations
with Pets In Need, to provide animal care
services and develop a plan for animal shelter
facility construction or rehabilitation. On March
29, 2017, the City agreed to pay to up to
$50,000 to Pets In Need to complete their due
diligence and develop conceptual plans for
construction or rehabilitation of an animal
shelter facility. The results of the conceptual
plans provided the City and Pets In Need with
several scenarios ranging between $9 million to
$20 million, the total cost of a new or
remodeled shelter. On August 21, 2017, City
Council approved a Letter of Intent with Pets In
Need to develop a financing study including
public and private financing for a new animal
shelter facility and commit up to $60,000 for
the study, and outline a process and timeline
for negotiating an operating agreement and
interim improvements for the current animal
shelter.
Expected Completion Date: Completed
March 2016 Management Update:
On October 15, 2015 the City issued a Request
for Proposal for Animal Services and Shelter
Operations with the goal of identifying a
partner who could provide professional services
for animal care operations to include, but not
STATUS OF AUDIT RECOMMENDATIONS
POLICE DEPARTMENT: PALO ALTO ANIMAL SERVICES – ISSUED 4/22/15
PAGE 4
Recommendation
Responsible
Department Original Target Date and Response
Current
Status
Implementation Update and
Expected Completion Date
limited to, tracking all animals intake, billings,
budget monitoring, financial reporting, annual
audits, computerized financial system, report
preparation, recruiting and training staff, and
implementing volunteer services program,
community education program, fundraising,
facility management, facility improvement, and
disaster preparedness.
On December 11, 2015 the RFP closed. Seven
organizations registered: Placer County
Contractors Association, Humane Society
Silicon Valley, Friends of Palo Alto Animal
Shelter, Pets In Need, Peninsula Humane
Society & SPCA, Silicon Valley Animal Control
Authority, TracSoftware, LLC. One of the seven
organizations, Pets In Need, submitted a
response to the RFP. Due to the low response
and as part of best practices associated with
local government procurement processes, city
staff conducted debrief sessions with the local
organizations who registered, but did not
submit a response, to better understand
current market conditions. The debrief sessions
were conducted in January 2016.
The results of the debrief sessions lead to a new
RFP with a broader scope. The prior scope was
prescriptive and detailed. Organizations
preferred a broader scope to allow for flexibility
with alignment with their existing service
models. The new RFP closes on March 18, 2016.
Staff will update the Policy & Services
Committee on March 22, 2016 about the
current status the RFP.
Expected Completion Date: June 30, 2016
5. As part of the discussion in Recommendation City Concurrence: Agree Completed August 2017 Management Update:
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4, analyze the feasibility of separating the ACO
activities from the shelter activities. If
appropriate, transition the ACO function out
of PAAS so it becomes solely a Police
Department function or part of another
regional animal services organization with
ACOs dedicated to the Palo Alto service area,
including Los Altos and Los Altos Hills, to
continue providing the level of response time
service that PAAS currently provides.
Depending on the outcome, engage in
discussions with other jurisdictions to
promote the City’s competitive response
times and consistently high customer
satisfaction ratings to potentially enter into
agreements with the City of Palo Alto for
animal control services as the jurisdictions’
current agreements expire.
Manager’s
Office
Target Date: June 2016
Action Plan: This will be done. At this time, the
City Manager presumes that bifurcation of the
duties will be our future approach, maintaining
ACO operations within the City and spinning the
shelter off to a non‐profit entity in the longer
term. This assumes shelter will remain in Palo
Alto.
The Animal Control Officers will continue to
remain a division of the Police Department.
Currently all shelter operations are within the
management control of the Police Department.
Upon approval of an operating agreement with
Pets In Need, shelter operations will transition
to the Community Services Department. Animal
Control Officers will continue to stay a division
of the Police Department.
Expected Completion Date: Completed
March 2016 Management Update:
The City Manager’s Office continues to support
this recommendation. Per City Council
direction, the City will retain ACO functions.
Upon completion of the RFP, a
recommendation about this finding will be
brought forth to City Council.
Expected Completion Date: June 30, 2016
6. Develop and implement a strategy to market
Palo Alto Animal Services to both residents
and nonresidents. Marketing efforts should
focus on promoting awareness of all available
services, as well as the cost savings available
to customers for using PAAS’ services. Engage
nonprofit organizations, volunteers, and other
animal shelters to assist in marketing PAAS’
services to a larger group of potential
customers.
City
Manager’s
Office
Concurrence: Agree
Target Date: June 2016
Action Plan: Staff will develop a plan to increase
and improve the website, database and other
marketing materials to promote awareness about
services during the triage period. The new long
term model will need to ensure successful
marketing to be successful.
Completed August 2017 Management Update:
The City has sought assistance from Friends of
Palo Alto Animal Shelter (FoPAAS) and Palo Alto
Humane Society (PAHS) to assist in marketing
programs and services. Specifically
management has requested the nonprofit
organizations to begin to create a database of
foster care families and additional volunteers to
increase outreach and capacity while reducing
costs. As part of the City Council’s action on
August 21, 2017, the City received letters of
support from FoPAAS and PAHS.
Expected Completion Date: Completed
March 2016 Management Update:
Further work will need to occur with marketing
and promotions post the RFP phase. The RFP
will evaluate prospective services providers and
their capabilities to effectively market and
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promote services. Staff at the animal shelter
continue to market services to residents and
non‐residents. Additionally, our local
stakeholders continue to assist with marketing
and outreach efforts. Staff and stakeholders
have increased the use of social media.
Expected Completion Date: June 30, 2016
7. Review the work that has already been done
related to building a new animal shelter.
Assess the feasibility of obtaining sufficient
funding through fundraising, public/private
partnerships, general fund subsidies, or a
bond initiative, to build a new animal shelter
that meets modern‐day standards for animal
care and safety, including animals’ physical
and behavioral needs, as established by the
Association of Shelter Veterinarians or a
comparable standard. Explore the potential
revenue that can be generated from including
new features in a new facility, such as a
community and education center. Involve the
Public Works Department in this assessment
as necessary. Based on the results, present a
proposal to the City Council for a decision on
whether to move forward with pursuing
construction of a new animal shelter and the
funding source.
City
Manager’s
Office
Concurrence: Agree
Target Date: June 2016
Action Plan: The improvement of the Animal
Shelter is key to the long term viability of our
program. This work will be done as an integral
part of the assessment of alternative models and
a presumed eventual decision to transfer shelter
operation to a new entity.
Completed August 2017 Management Update:
On September 9, 2016, City Council directed
staff to proceed with exclusive negotiations
with Pets In Need, to provide animal care
services and develop a plan for animal shelter
facility construction or rehabilitation. On March
29, 2017, the City agreed to pay to up to
$50,000 to Pets In Need to complete their due
diligence and develop conceptual plans for
construction or rehabilitation of an animal
shelter facility. The results of the conceptual
plans provided the City and Pets In Need with
several scenarios ranging between $9 million to
$20 million, the total cost of a new or
remodeled shelter. On August 21, 2017, City
Council approved a Letter of Intent with Pets In
Need to develop a financing study including
public and private financing for a new animal
shelter facility and commit up to $60,000 for
the study, and outline a process and timeline
for negotiating an operating agreement and
interim improvements for the current animal
shelter.
Expected Completion Date: Completed
March 2016 Management Update:
Two options exist for constructing a new shelter
or remodeling the existing shelter. Either have a
new service provider fundraise and complete a
project or have the City finance the project
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through existing infrastructure funds or a bond
measure. At this stage, staff believes that the
RFP needs to be completed before any further
exploration of this topic.
Expected Completion Date: June 30, 2018
8. Seek future opportunities to provide animal
licensing services to the County of San Mateo
when its current contract expires in 2016.
City
Manager’s
Office
Concurrence: Partially Agree
Target Date: June 2016
Action Plan: Initial staff review suggests that the
County’s licensing services would not provide
profit to the operation. However, staff will
reassess the opportunity and provide those
results to as part of the audit update. Other
opportunities to increase revenue in the near
term appear quite limited. Staff presumes that
the long term plan will need to expand services to
be successful.
Completed August 2017 Management Update:
As part of negotiations with Pets In Need, for a
possible public‐private partnership, the City will
retain the revenues from animal licensing to
offset costs associated with Animal Control
Officers. If the City Council does not authorize
the partnership with Pets In Need, staff will
review all revenue streams including licensing.
Expected Completion Date: Completed
March 2016 Management Update:
Task will be conducted along with evaluation of
new service model.
Expected Completion Date: June 30, 2016