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HomeMy WebLinkAboutEmail - Efficiency Initiative MemoGallastegui, Elvi From: Castaneda, Frank Sent: Thursday, June 07, 2012 11:28 AM To: Gallastegui, Elvi; Martinez, Johnny; Regalado, Tomas (Mayor) Cc: Gort, Wifredo (Commissioner); Diaz, Placido Subject: District 1 Blue page item June 28th City Commission Meeting Attachments: Efficiency Initiative Memo.doc From: Casanova, Christina M. Sent: Thursday, June 07, 2012 11:17 AM To: Castaneda, Frank Subject: Efficiency Initiative Memo.doc CITY OF M AMI INTER -OFFICE MEMORANDUM TO: Honorable Mayor Regalado DATE: June 6, 2012 Commissioner Marc Sarnoff Commissioner Frank Carollo Commissioner Francis Suarez Commissioner Michelle Spence- Jones Priscilla Thompson, City Clerk FROM: Commissioner Wifredo Gort SUBJECT: Efficiency Initiative It has been a pleasure for my office to work hand in hand with the administration over the past two years. During my tenure, we have focused on analyzing all aspects of the city including but not limited to operations, finance, procedure, efficiency and department's city wide. We have discovered several issues that need to be addressed. Below I have enumerated a summary of the issues, recommendations and the resulting positive impact to the city after implementation. In analyzing the Capital Improvements department and the related bond issuances we found that administrative costs were being funded from the general fund. This was a problem since the majority if not all of the funding should come from the bonds themselves as they provide for a percentage of administrative costs. This was brought to the attention of the administration at the time and certain adjustments were made (approximately $1,600,000.00) and a portion of those monies impacting the general fund were recovered thereby offsetting a portion of the deficit. During the same analysis we discovered that the builders risk policies for new construction being funded by the bonds were indirectly being paid from the general fund using Risk Management as a pass thru. For example, the Builders Risk Policy for the Marlins Garage in the amount of $625,000.00 was being funded through the General Fund. These monies, according to the administration at the time, were reimbursed and created yet another significant reduction to the existing deficit. In analyzing the Community Development department and related operations, practices, and procedures we found several issues that impacted the city and provided analysis and recommendations to the administration. We analyzed the fiscal year used for purposes of federal funding and found that an adjustment of the fiscal year period would result in a huge one time injection to the city and save many programs that would have otherwise been left without funding. Among those that would have been impacted were elderly services and housing. A receptive Community development department implemented our recommendations and shifted the fiscal year; Resulting in a onetime infusion to the City of approximately $5,000,000.00. Separately the City and the administration were faced with a reduction in funding from the Federal Government from what originally was believed to be ten percent across the board in Community Development. It was later found that the cuts would be much deeper, roughly thirty four percent. This meant that any contingency the City had made to offset the reduction was rendered ineffective. We immediately began to analyze rationale behind the drastic cuts. We discovered it came down to the manner in which the calculations were made and a result where and how the monies were allocated. We found the use of the figures used by the Department of HUD were skewed as a result of not only the census but how overcrowding was used in the formula to compute the allocations. We immediately brought the discrepancy to the attention of the Administration and worked to rally support from our Federal Representatives, Senators, and the United States President. We worked closely with the Mayor in an effort to get the Presidents attention on this matter and drafted a letter to Congress and the President of the United States. This letter was hand delivered and the effort to correct the discrepancy, which as it turn out its a nationwide problem, it became apparent to us that the communities hardest hit were those that were suffering the most from the collapse of the housing bubble. In addition we found that certain monies were slated to be re -paid to HUD from the general fund. ($1,900,000.00). Those monies were in fact in a separate Affordable Housing Fund already slated for the re -fund to HUD; Resulting positive impact on the general fund for an equal amount. We have worked closely with Risk Management staff to identify certain efficiencies and lack thereof in their department. We found the certain outside service providers were billing the City of Miami as much as $150,000.00 per month. Gallagher & Bassett provided ten employees dedicated to City services. Roughly $15,000.00 per employee per month. In the past we found that the City handled similar services internally and in addition provided for 24 hour on call response. Gallagher & Basset only provided regular business hours of operation and the balance of the 24 hour day was left to an automated voice mail. The total annual expenditure for said services is $1,800,000.00 for (10) ten employees. Another provider handling managed care was being paid $230,000.00 annually. We could not find any justification for this practice nor could we find any other governmental agency within Miami -Dade County currently using similar services. In further analyzing data provided us we found that all of our insurance procurement was being billed by Brown & Brown for an amount of $106,000.00 annually. The amount may seem insignificant for the unintended consequence of such practice provides for little motivation to get the City the best rates. By grouping all of the policies and not allowing for competition the City would be paying a huge premium for properties that are deemed high risk and the same factor would be applied across the board; translating to HIGHER PREMIUMS FOR ALL INSURANCE. Our review of the Employee Relations department, working closely with management, we found several issues that needed to be addressed. A large number of city temps had been temps for many years with the City paying a premium to the temp agency for their service. This discovery led to a change in policy and an effort to convert the agency temps to City temps. We also found flaws in the hiring practices of the temp agencies as well, in one instance a temp who was a convicted felon had been working within the city in a sensitive area. Our review also uncovered a lack of an evaluation process for employees had manifested itself over the years and in some cases the review practice had stopped all together. Lead to lack of accountability, performance, and/or motivation. The administration training is being offered to correct this practice and educate supervisors in how to conduct performance evaluations. In addition we found that in some areas SOP's (Standard Operating Procedures) were either outdated or non-existent and are working with the administration have identified those areas. The next issue ties in directly to the latter evaluation process and lack thereof. In monitoring the Civil Service Board Hearings, for the better part of the last two years, we found that part of the problem in the disciplinary process is not entirely the Civil Service Board. In numerous cases the City was clearly not prepared. This can be attributed to lack of evaluation process, documentation, and preparation. One settlement has already been accepted and the rest are to follow. Our review of the Finance Department and several revenue generating components within included the parking surcharge and the collections resulting from them. We found that the scope of responsibility for the enforcement and tracking was contracted out to a private entity resulting unaccountability. There was a lack of accountability and it was costing the City substantial amounts of money in revenue. The administration was made aware and corrective measures were to be taken that would increases revenues significantly. The next department we looked at was the Solid Waste Department. This department under the current management has taken our findings and in turned them into a substantial revenue generating component. We found that in most instances the Solid Waste haulers were paying less than actually due. A figure originally thought to amount to at least $2,000,000.00(annually) in lack of collections; now estimated to be closer to $9,000,000.00 combined amongst all haulers. The smaller companies were being bought out and not all reporting was taking place post the buyouts. Additionally replacement of the roll off construction containers was in some cases not being paid; they paid the City for one container and not each additional exchange. We also had the opportunity to identify certain issues that were the cause of the city spending additional monies for the replacement of garbage bins. It was found that somehow the hydraulic arms on the pickup vehicles were being modified, resulting in the bins being damaged. Working closely with the new Solid Waste Director the issue is being addressed and will save the City a substantial amount of money. We had the opportunity to field numerous complaints from Directors past and present as to the effectiveness of the Civil Service Board, we have viewed numerous cases brought for action in front of the board. This in turn led us to the conclusion that the board may not necessarily be the problem but the lack of preparation on the part of the city. In further dialogue with the administration we found a systemic breakdown in the evaluation process City wide. In the past, Employee Relations, the keeper of records for employees, was tasked to ensure annual evaluations were conducted based on the individual employees' anniversary date. The Employee Relations department has strayed from this process in part because if no pay increase is involved and an incorrect assumption was made that the evaluations are not needed. An example of the problems resulting from this is the case of Merideth Nation where she had stellar evaluations. Adverse accounts of performance and negative evaluations that had not been documented. Ultimately led to a defeat for the administration before the Board. This led us to work with administration and ultimately a program was created to educate the administrators in the evaluation process and establish accountability. We have also explored the USAI and USAR grants and found the below possible revenue enhancements and/or savings derived from the grants: UASI: 1. The funding for the ongoing maintenance of the helicopter, purchased with UASI funds, along with the fuel costs can be funded from the grant. 2. The funding for the ongoing maintenance of the Fireboat, purchased with UASI funds, along with the fuel costs can be funded from the grant. 3. USAI will occupy space at the MRC therefore rent can be paid to the city from the grant. 4. As a result of the USAI program being based at the MRC then security at the MRC can be funded from the grant since this can be considered critical infrastructure and security for the same is crucial. 5. The grant can be used for non-traditional policing activities so long as we are not supplanting; Therefore, The possibility exists that the city may no longer be able to fund, nontraditional policing operations, such as Aviation, Marine Patrol, and the Fire Boat. This void may be able to be filled by the grant. The fact is that the City of Miami has several critical infrastructure sites, that either lie within are abut, the jurisdiction. We have in the least the port of Miami and related waterways along with the Miami River. In this case then a suggestion that was put on the table is a cross trained unit that would be funded from UASI. The unit can be trained in a three to four month period using regional monies in advance preparation in the event that we go in this direction. This measure would be in anticipation of the City not being able to fund these units and the UASI proposal for the following fiscal year include the component for funding. The verbiage in the grant provides for funding of non-traditional activities. 6. The grant also cites funding for security at critical infrastructure sites. In the event the city could no longer fund the security guards there numerous facilities that we may be able to use the monies for. USAR: 1. Currently USAR is based in the City and pays approximately in rent annually. of $97,073.16. If space is available at the MRC the program may be moved to the MRC and the revenues would be to the City. This would also provide for a unification of efforts and better lines of communications since the current Chief of Fire overseeing USAI and USAR is one in the same. The current Assistant Chief will benefit by having a consolidation of locations and will also have certain benefits to both grants by freeing up some of the overhead funding including but not limited to utilities, and maybe some staff. The combined effort in the reconciliation of the two programs will net the city approximately $500,000.00 in recurring offset expenditures from the general fund and an additional recurring revenue increase of approximately $194,000.00. I may also add that these are just the significant figures and do not include issues such as the elimination of court reporting services that also led to a recurring cost saving of $50,000.00 per year. Financial issues aside we have also been working diligently on identifying deficiencies in Miami 21, Civil Services Rules and Regulations, and the City charter. In addition our office has also been working on the Annexation of certain areas bordering the City. In summary our office has managed to put forth ideas and concepts that have resulted in approximately $17,000,000.00 of positive financial impact to the City.