March 13, 2004
SUBJECT: City Council Review and Prioritization of City Services
REPORT IN BRIEF
This is the first of two reports that the City Council will use to review and prioritize City services in light of the continuing financial problems facing Sunnyvale. This report describes a proposed process that Council may use at special meetings scheduled this month to review the services the City makes available to residents, businesses, and other customer groups. The report also includes Service Review Worksheets for these services. These worksheets provide information that is designed to clearly describe each City service. One intended result from these meetings is to insure that the public has a full and complete understanding of the various services provided by the City.
The services provided by the Finance, Public Safety, Information Technology, and Parks and Recreation Departments, and the Office of the City Manager, will be presented on March 13, 2004. Services provided by the remaining City departments (excluding the Department of Employment Development) will be addressed at a special meeting on March 20, 2004. A second, separate report will be provided for this meeting. This second report will include Service Review Worksheets for the services provided by the Public Works, Community Development, Human Resources, and Libraries Departments, and the Office of the City Attorney.
There are three objectives for the March 13th and March 20th meetings. First, the services described in the service review worksheets will be reviewed and assigned to service ranking categories by Council. Second, Council will be asked to identify service levels for existing City services that should be adjusted, for any new services that should be offered beginning next fiscal year, or for any existing services that should be examined for deletion next fiscal year. This will allow staff to identify the preliminary fiscal and service effects of these initial policy directions. Staff will provide this information as part of the preliminary, unbalanced budget and long-term financial plan that will be presented to Council in April 2004. Finally, these meetings will provide the public with an opportunity to comment on the proposed service category assignments, and on Council's discussion regarding changes to services or service levels.
BACKGROUND
Council expressed its interest to use a new process to review, to provide initial policy direction, and to approve the City's annual budget and long-term financial plan. Council adopted this new approach on February 3, 2004. The new approach adds four steps for preparing the recommended budget and long-term financial plan. They are:
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Prioritizing all City services as the recommended budget is being developed, rather than after the recommended budget has been presented to Council in May.
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Presenting an unbalanced budget in April, which will allow Council to provide preliminary policy direction on the options that City staff will examine and potentially use to prepare a balanced, recommended annual budget and long-term financial plan.
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Adding four Council meetings to the budget calendar to allow more and earlier Council involvement in the budget process.
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Providing public hearings at these additional budget meetings to encourage more public involvement and participation in the budget process.
The March 13th and March 20th meetings will be used by Council to review and to begin the process of prioritizing all services currently offered by the City. Two meetings have been scheduled in April (April 10th and April 17th) for Council to discuss its vision for the community, for staff to present the preliminary, unbalanced annual budget and long-term financial plan, and for Council to provide policy direction on methods for balancing the annual budget.
EXISTING POLICY
Fiscal Sub-Element of the General Plan
Goal 7.1B: Financial Practices: Maintain Sound Financial Practices Which Meet All Applicable Standards and Direct the City's Financial Resources Toward Meeting the City's Long Term Goals.
Policy 7.1B.5: Performance Budget system: Maintain and refine the Performance Budget system to assure its use for multi-year planning, full cost accounting, and budget monitoring.
DISCUSSION
All services currently provided by the City will be reviewed at the March 13th and 20th meetings, according to the following schedule:
| March 13, 2004 |
March 20, 2004 |
| Finance Department |
Community Development Department |
| Public Safety Department |
Libraries Department |
| Information Technology Department |
Human Resources Department |
| Parks and Recreation Department |
Public Works Department |
| Office of the City Manager |
Office of the City Attorney |
Services provided by the Department of Employment Development will not be reviewed because federal, state, and foundation grants are used to pay for service costs.
Staff has prepared a Service Review Worksheet for all City services. Each worksheet describes a specific service provided by a City department. Worksheets for the Finance, Public Safety, Information Technology, and Parks and Recreation Departments, and the Office of the City Manager, are included as Attachment A to this report.
Each worksheet includes the following information:
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A brief description of the service,
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Budgeted costs and revenues (if appropriate) that are associated with the service, and information comparing the cost of providing the service with the amount of revenues or fees generated from customers using the service,
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Information describing the type of customer(s) and the size of the customer group(s) that the service is offered to, and
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A suggested assignment of the service by staff to one of five categories.
The worksheets are grouped together by department. At the beginning of each department's worksheets is a Department Summary Worksheet. This worksheet summarizes the department's Service Review Worksheets, and will be used by Council during the special meeting.
Staff has provided a suggested process that Council may use in reviewing and prioritizing City services. This process is patterned after the process Council uses at the annual Study Issue Workshop. There are five parts to the proposed process.
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The department director will provide a brief overview of each service provided by the department.
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Next, Council will be asked to raise questions regarding the services provided by the department or to ask the department director to clarify information included on the Service Review Worksheet regarding the service. The intent of these clarifying questions or comments will be to better understand one or more specific service.
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At this part of the meeting, Council will be asked to provide suggestions or ideas regarding new services that could be provided by the department in the future. In addition, Council will be asked to indicate if service levels should be adjusted for any existing service provided by the department, or to have staff examine the effects of deleting a specific service. These new services, service level adjustments, and potential service deletions will be examined as part of preparing the preliminary, unbalanced annual budget and long-term financial plan.
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Next, the public will be offered the opportunity to comment on the department's service level worksheets or the preliminary policy direction on new services or revisions to existing services.
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Finally, each Council member will be asked to review the proposed category assignments for the services provided by the department. If a Council member agrees with the category assignments, no changes to the Departmental Summary Worksheet will be needed. If a Council member disagrees with a category assignment for one or more services, the service should be assigned to one of the following categories:
Legally mandated service or required by contract: this category should be used for services that the City is legally required to make available by another governmental agency, by City Charter, or by ordinance. It should also be used for services that the City has a contract obligation to make available.
Core external service: this category should be used for services that are considered to be the minimal, essential services that would be made available to City residents, businesses, or other customer groups even if the City was facing a financial bankruptcy.
Core internal service: this category should be used for services that are considered to be the minimal, essential internal support services that are required by City employees to deliver services. These services are required even if the City was facing a financial bankruptcy. These services are essential for the effective and efficient operation of the City organization.
Expected/traditional service: this category should be used for services that Sunnyvale residents, businesses, and other customer groups have come to expect Sunnyvale to provide or make available to them. Other cities would also be expected to provide these services to their residents, businesses, and other customer groups. This category can also be used for services called for by the General Plan or a sub-element of the General Plan. Or, this category can be used for services that address the health or safety of the public, or for services that are provided to maintain minor City infrastructure systems. Finally, this category can also be used for services that contribute to the quality of life, or that support service delivery that is designed to maintain or improve the quality of life in Sunnyvale.
Optional service: this category should be used for services that contribute to Sunnyvale's reputation as one of the best-managed cities in the country. These services go beyond the expectations of residents and businesses in other cities, and the internal support provided by internal support departments in other cities. However, in Sunnyvale, residents, businesses, and other customer groups expect the City to make these services available to them. These services, and the quality or the level of service that they are provided at, contribute to the City's continued high results in customer satisfaction, and financial and operational performance. Currently, these services may be provided or made available at higher levels of service than expected.
Staff had the option of assigning a service to more than one category. This option was used especially for those services that are legally mandated or required by contract. In addition, some services could be assigned to either the Expected/Traditional Service or Optional Service categories. Staff exercised judgement in assigning a service to one of these categories. Staff used the Optional Service category when a reasonable case could be made that the specific service could be assigned to either the Expected/Traditional Service or Optional Service categories.
Two copies of a summary of department services (photocopied on blue copy paper) are included with this report (listed as Attachment B). Council members should use one copy if they want to assign a service to a different category other than the category suggested by staff. A Department Summary Worksheet will be collected from each Council member. The second Department Summary Worksheet may be used and retained by the Council member. Staff will tabulate the Council's category assignments for each service provided by the department. The tabulated results will be reported as part of the April 10, 2004 special meeting.
It is suggested that a majority vote of Council be used for assigning a specific department service to a specific category. The category assignment will begin the process of ranking or prioritizing City services. At the special meetings scheduled in April, and as a preliminary, unbalanced budget is presented, Council may further discuss and prioritize City services that have been assigned to one or more categories. Council may also provide other preliminary policy direction on issues or approaches that it wants staff to explore in preparing the recommended annual budget and long-term financial plan.
If adopted by Council, the same five-step process would be used for the City services that will be reviewed at the March 20, 2004 special meeting.
FISCAL IMPACT
There is no direct fiscal impact from assigning City services to categories, or beginning the process of prioritizing City services. There will be a fiscal impact if Council provides policy direction as part of the service review process to change a service level for an existing City service, to add a new service, or to begin the process of deleting an existing service. These fiscal impacts will be developed by City staff, and included as part of the recommended budget and long-term financial plan.
PUBLIC CONTACT
The public was notified of this item through publication of the Council Agenda (public hearing items) in the San Jose Mercury News and the posting of the Council Agenda and Report on the City of Sunnyvale internet home page. Some City Boards and Commissions have expressed an interest in providing Council with input as part of the service review process. This input will be made available to Council at either the March 13, 2004 or March 20, 2004 meetings. Staff will also use the following methods to publicize Council's review and prioritization of City services: issuing news releases, providing KSUN announcements, including articles on the City's Web site, providing copies of Reports to Council at the Library, and making announcements at neighborhood outreach and City Council meetings.
ALTERNATIVES
There are three alternatives for Council to consider.
Alternative 1.
A. Use the five-step process described in this report to assign City services to one of five service ranking categories as part of the process to prioritize the services that the City makes available to residents, businesses, and other customer groups.
B. Use the majority vote of Council members to assign City services to service ranking categories if one or more Council members disagree with the proposed category assignment. A majority vote will be determined by tabulating category assignments made by Council members on the Department Summary Worksheet for a specific City service.
Alternative 2.
Modify either the process for assigning City services to the service ranking categories, or use some other approach other than a majority vote of Council members, and use the modified process and/or approach for assigning City services to service ranking categories during special meetings scheduled for March 13, 2004 and March 20, 2004.
Alternative 3.
Direct City staff to explore some other process and approach other than majority vote to determine Council agreement for assigning City services to service ranking categories, and present the alternative process and approach at a future City Council meeting. This alternative will require scheduling one or more additional Council meetings to assign City services to service ranking categories.
RECOMMENDATION
It is recommended that the City Council approve Alternative 1.
Prepared by:
Charles J. Schwabe
Deputy City Manager
Approved by:
Amy Chan
Interim City Manager
Attachments
A. Service Level Worksheets