I.         Introduction

The City Council asked staff to prepare a Program and Financial Performance Exception Report for its review.  The purpose of this report is to provide an "early warning" for program and financial performance that may not meet the goals or expectations of the City Council.  This early warning report will replace the Program Performance Report that the City Council received on a trimester basis last fiscal year.

This report lists the program outcome measures and performance indictors that staff projects may fall below the performance goals set by the City Council.  Since we are so early in the fiscal year, no explanations are being provided regarding the first quarter performance results for the measures or indicators included in this report.  Rather, staff will watch these measures and indicators carefully during the FY 03/04 second quarter (October 1 to December 31, 2003) to see if the lower than expected performance continues.  Responses to continued performance problems will be included in the exception report for the second quarter of FY 03/04. 

This report is organized by each of the 10 departments that report to the City Manager.  Only program outcome measures and performance indicators that may not meet annual performance goals are listed.

II.                Financial Performance

The City's overall financial performance is affected by economic conditions, actions taken by the State Legislature and agencies, and expenditure patterns.  Staff continues to watch three factors very carefully to determine the effects they are having on the City's financial condition, both in the short and long-term.

Major General Fund Revenues:

As of Accounting Period 4, revenues for the General Fund's top revenues are performing slightly below projections based on payment schedules and past trends.  Several key revenues will require close monitoring.  For example:

·         Sales Tax: revenues are down about 10% as compared to this period last year.

·         Vehicle License Fees: revenues are projected to be about $1.5 million lower than expected because of the State's decision to withhold revenues.  This amount can be offset by savings generated last fiscal year.

·         Transient Occupancy Tax: revenues are down about 23% for the first quarter of the fiscal year.

·         Construction Tax: revenues are at about 42% of budget.  There have been several large construction projects (mostly residential), which accounts for the increased level of revenue as compared to budget for both construction taxes and permits and licenses.

·         Permits and Licenses: revenues are at 50% of budget.

·         Property Tax: the first large installment will be received in mid-December.

Employee Base Wage Rates and Benefit Costs

Annual salary surveys for both SEA and PSOA employees have been completed.  The FY 03/04 salary increase for SEA employees was roughly the same as the funding included in the budget for these costs.  The FY 03/04 salary increase for PSOA employees has not been presented to City Council for approval.  The initial analysis of salary survey results indicates that the cost for the PSOA increase will be higher than the funding included in the budget.  Council will be asked to provide policy direction regarding wage issues when collective bargaining agreements are renegotiated.   The City has just received the CAL PERS Actuarial Valuation for FY 04/05.  Staff has begun to review the report.  Preliminary indications are that the PERS rates for miscellaneous employees are in line with budget projects.  PERS rates for safety employees are slightly higher than budget projections.

Reductions in State Provided Revenues  

The State began its fiscal year with an $8 billion budget deficit.  This figure may grow as the year progresses.  The deficit will need to be closed through the State's budget process.  The newly elected Governor has pledged to reduce motor vehicle license fees.  A portion of these revenues goes to cities and counties.  It is not clear how or whether the State will meet its obligation to continue to backfill VLF revenues to cities and counties.

A copy of the Financial Report for Accounting Period 4 is enclosed.

III.             Program Performance Results

Forty-six outcome measures out of total of 417 outcome measures and performance indicators may not meet annual performance goals.  This total does not include performance indicators for the Department of Employment Development, which will be available after January 1, 2004.  Staff will carefully monitor these measures and indicators during the second quarter to see if negative performance trends are continuing.   

A.                 Community Development Department (CDD)

CDD is managing five programs this fiscal year.  There are a total of 37 outcome measures for these programs.  Two outcome measures may not meet their annual performance goals.  They are:

Economic Prosperity Program

·         40% of Sunnyvale residents perceive the downtown area as an attractive shopping and/or entertainment destination.

Neighborhood Preservation Program

·         88% of active neighborhood associations rate the neighborhood partnership's service as good or better. 

B.                 Department of Employment Development (DED)

DED managed nine programs that were grants that it received from various governmental agencies and private foundations.  Many of these grants were awarded on a calendar year basis.  The department will not know the number of programs or grants for this fiscal year until after January 2004.  This information along with the number of performance indicators will be reflected in the second quarter exception report.

C.                 Finance Department

The department is managing seven programs this fiscal year.  There are a total of 42 outcome measures for these programs.  Two outcome measures may not meet their performance goals.  They are:

Compensation Management

·         The budget/cost ratio is at 1.0.

Treasury/Cash Management

·         The budget/cost ratio is at 1.0.

D.                 Human Resources Department (HRD)

The department is managing five programs this fiscal year.  All programs remain on the performance measurement budget format, so only performance indicators are used.  There are a total of 42 performance indicators for these programs.  Seven performance indicators are not expected to meet performance goals at this time.  They are:

Employee Selection Program

·         The average number of days (20) that it takes to begin recruitment from receipt of personnel action notice requesting that a position be filled.

·         The number of requests for new hires (50) and the percent of time (55%) that recruitment activity begins within 30 days of receipt of personnel action notice requesting a new hire. 

Insurances, Retirement, and Incentives Program

·         Percent of total payroll.

·         Number and percent of employees given awards for suggestions.

·         Number and percent of training workshops listed on the approved fiscal year management organizational development training schedule that were accomplished.

·         Number and percent of individuals who rate training received as being "satisfactory" or higher.

Self-Funded Liability and Property Program

·         Total claims paid and number of claims paid.

E.                 Information Technology Department

The department is managing two programs this fiscal year.  Both programs remain on the performance measurement budget format, so only performance indicators are used.  There are a total of 46 performance indicators for these programs.  Eight performance indicators may not meet annual performance goals.  They are:

·         Percent of City's print requests produced in-house.

·         Number and percent of requests for installing or moving equipment that were accomplished as scheduled.

·         Number and percent of staff trained on new equipment and applications within two weeks of equipment or software installation.

·         Number of requests for individual assistance and percent responded to within one working day of request.

·         Number and percent of in-house repairs made within 4 hours of notification.

·         Percent of in-house press request charges which are competitive with or less than private sector rates according to the annual sample.

·         Number and percent of City staff who use central computer applications in their work.

·         Number of new equipment installations and percent of the installed base.

In addition, some customer satisfaction performance indicators may not be met.

F.                 Libraries Department

The department is managing four programs this fiscal year. There are a total of 25 outcome measures for these programs.  It should be noted that Council approved the new outcome measures as part of a program restructure for SC[I]3.  These new measures will become effective next fiscal year, but results will be reported this year.  Two outcome measures may not meet their annual performance goals.  They are:

SC[I]3 Program:

·         The revenue to operating expense ratio is equal to 100%.

Library Learning Environment Program:

·         83% of library users believe that the library's hours of operations meet their needs.

G.                 Office of the City Manager (OCM)

OCM is managing eight programs this fiscal year.  There are a total of 54 outcome measures for these programs.  All outcome measures are expected to meet performance goals at this time.

H.                Parks and Recreation Department

The department is managing eight programs and supporting one program (Columbia Neighborhood Center) during the fiscal year.  There are a total of 48 outcome measures for the eight programs managed by the department.  Seven outcome measures may not meet their annual performance goals.  They are:

Parks and Recreation Management Program

·         80% of customers whose concerns are addressed through the Parks and Recreation Division are satisfied with the resolution of their concern and the manner in which staff treated them.

Leisure Services Program

·         There are 3,220,540 participant hours of leisure activities combined from Program 640 (including facilities), Program 642 (including co-sponsored groups), and Program 644.

·         Average cost per participant hour (a) $2.45 for total combined leisure activities (not including revenue).  Average cost to the General Fund per participant hour (b) $1.45 for total combined leisure activities.

Leisure Services for Non-Dependent Populations Program

·         There are 897,900 participant hours of directly provided or brokered non-dependent leisure services.

·         Average cost per participant hour is $1.52 for non-dependent populations (not including revenue). 

Golf Course Operations and Services Program

·         The revenue/budget ratio is 1.0.

·         The golf rounds/played ratio is 1.0.

I.                   Public Safety Department (DPS)

DPS is managing five programs this fiscal year.  There are a total of 39 outcome measures for these programs.   Four outcome measures may not meet their annual performance goals.  They are:

Fire Services Program

·         A response time to emergency calls for assistance of 6.2 minutes from receipt of call by dispatch is achieved 90% of the time.

·         A three-year average patient survivability rate of 20% in viable defibrillation cases is achieved.

Public Safety Administration and Technical Services

·         Emergency fire and EMS calls are processed and dispatched within average (mean) of 60 seconds.

·         All requests for property and evidence are completed within mandated laws and policies.

J.                  Public Works Department

The department is managing 11 programs this fiscal year.  Nine programs have migrated to the outcome management system.  These programs have a total of 59 outcome measures.  Eleven outcome measures may not meet their annual performance goals. 

Two programs remain on the performance budget format.  These programs have a total of 25 performance indicators.  Three performance indicators may not meet their annual performance goals. 

Transportation Operations Program

·         The Vehicle Collision Rate (accidents per million miles of travel) is at the base year of FY 1999/2000.

·         Emergency traffic signal repairs are completed within one hour of notification 90% of the time.

·         Street light outages are completed within 24 hours 90% of the time.

·         A Customer Satisfaction Rating of 90% is achieved for the safety and reliability of traffic operations.

·         The Budget Cost Ratio (planned divided by actual cost) is at 1.0.

          Public Works Support Services Program

·         Occupancy rates for City owned rental properties equal the Industrial Office Index for Sunnyvale.

·         The charge for collection of refuse in Sunnyvale is 98% of charges for comparable services in similar local cities.

Wastewater Management Program

·         Sewer and storm emergencies are responded to within 30 minutes 90% of the time.

·         Sewer main plugs are reduced five percent compared to the average of the last three years.

·         City sewer rates, weighted by user category, are five percent less than rates of comparable local agencies.

Provision of Vehicles and Motorized Equipment Program

·         The Budget Cost Ratio (planned divided by actual cost) is at 1.0

Parking District Landscaping Program

·         Percent of Downtown Parking District trees which are replaced for various reasons within two months of notification determined by Divisional plant material replacement forms. 

·         Percent of Downtown Parking District shrubs which are replaced for various reasons within two months of notification determined by Divisional plant material replacement forms. 

·         Percent of Downtown Parking District groundcover plants which are replaced for various reasons within two months of notification determined by Divisional plant material replacement forms. 

Attachment

FY 2003/2004 Financial Report for Accounting Period 4, Ended October 25,2002