MINUTES
ORO VALLEY TOWN COUNCIL
Study Session
March 26, 2008
ORO VALLEY COUNCIL CHAMBERS
11000 N. LA CANADA DRIVE
 
CALL TO ORDER at 5:30 p.m.

ROLL CALL

PRESENT:
Paul Loomis, Mayor
Al Kunisch, Vice Mayor
Paula Abbott, Council Member
K.C. Carter, Council Member
Helen Dankwerth, Council Member
Barry Gillaspie, Council Member
Terry Parish, Council Member

1.

LEGAL DEPARTMENT MANAGEMENT STUDY FINAL REPORT BY STEVE BURKETT AND JOVAN GROGAN OF MANAGEMENT PARTNERS, INC. - PRESENTATION AND DISCUSSION


Management Assistant Tory Schlievert presented the Staff report and gave a brief history of the item.

Ms. Schlievert introduced Steve Burkett and Jovan Grogan of Management Partners, Inc. 

Mr. Burkett stated that the Town’s Legal department was one of the better departments they have reviewed. He noted that the management of the Legal Department was well led. He stated that customer satisfaction internally was high and that they provided good responsive service.

He noted that the project work included:
~Interviews with Mayor, Town Council and 15 employees
~Benchmarking with 10 other towns/cities
~Mapping/flowcharting specific work processes
~Review and analysis of many documents

The Executive Summary presented the following:
~Legal department customers report satisfaction with legal services provided.
~The Legal department was well-managed.
~The department has documented strategic plans, policies, procedures and performance measures, reflecting best practices for municipal law offices.
~Conflicts regarding roles and communication issues have been resolved.
~Current department staffing levels were appropriate based upon peer comparisons and the workload.
~Current staffing should be adequate to absorb increases in the Town population and 
workload.
~Opportunities have been identified to further improve the Request for Legal Services process
~Efficiency and effectiveness of the department could be improved through more effective use of technology
~Some performance measures have been identified; their use can be broadened and strengthened
~Use of external counsel was appropriate and based on sound policies and oversight.
~Town’s risk pool program requires additional oversight and evaluation

Mr. Grogan stated that the Town’s Legal department was in the median of the distribution for the ten peer cities surveyed. He noted that the department’s expenditures per capita were a little higher than peer cities though considered within the normal range. He noted that the expenses were in three primary categories:
~In-house counsel; attorneys and support staff.
~Outside counsel
~Risk pool
  *Workers compensation
  *Liability insurance

Mr. Grogan stated that:
~The number of Legal department staff was in line with peer cities.
~The ratio of support staff to attorneys was 1 support person per attorney.

Mr. Burkett discussed the department-wide observations regarding customer service. He stated that though turnover has been high in the Town Attorney’s position, customer satisfaction remains high. He noted that the reason for excellence in continuity was due to the efforts of Tobin Sidles as Acting Town Attorney during the interim.

His recommendation was to implement an annual customer service survey and track progress over time.

He presented his observations regarding roles & relationships:
~Prior confusion of roles and reporting relationships for the Town Attorney position.
~Prior communication, trust and teamwork issues existed among the Town Manager, Town Attorney and Town Council.

His recommendations were to:
~Clarify the roles of the Town Attorney, Town Manager and Town Council.
~Provide annual training for Council regarding the respective roles of the Town Attorney and Town Council in the risk management programs.
~Review quarterly litigation reports to the Town Council in executive session.

Mr. Burkett discussed his Staffing and Workload observations:
~Total expenditures were slightly higher than peer cities.
  *Considered appropriate for the level and nature of the Oro Valley workload.
~Overall staffing levels were in line with peer jurisdictions.

He stated that his findings determined that current staffing levels were appropriate and in line with peer benchmarks. 

Mr. Burkett stated his assessments of Management Systems:
~Department has sound strategic planning, goal setting policies and procedures documents.
~Department has a performance measurement framework but lacks a comprehensive performance measure system.

He recommended to:
~Revise existing performance measures and implement a performance measurement system that includes more measures for workload, effectiveness and efficiency.
~Automate the collection of performance measurement data with the installation of a legal office management system (software). 

Mr. Grogan presented his observations regarding technology:
~Department needs to implement a legal office management system for tracking cases, customer requests, and performance data.
~Civil staff was dissatisfied with Amicus software.

He recommended to:
~Release Request for Proposals (RFP’s) for legal case management program.
~Implement simple time tracking system for attorneys and paralegals.
~Implement a Town-wide electronic document retention system that links Legal Department document retention efforts with those of the Town Clerk’s office.

Mr. Burkett stated that regarding the Civil Division:
~Staffing was consistent per 1,000 population.
~Benchmarking showed that staffing, expenditures and organizational structure were not atypical.
  *No change recommended
~Town attorneys attended more Boards and Commission meetings than most peer counterparts. 

He recommended identifying which meetings were critical to attend and reducing the number of meetings attended by Civil Division attorneys.

Mr. Grogan presented his observations regarding the Requests for Legal Assistance process:
~Customer departments were pleased with the response time for legal requests.
~Departmental work assignments were assigned by support staff.
~Overall process was sufficient
~Informal requests were often not included in the workload tracking statistics.

His recommendations were to:
~Improve technology to increase efficiency.
~Assign intake review and calendaring responsibility to the legal secretary.

Mr. Burkett stated that the amount of money spent on the risk management pool was almost as much as the amount spent for the entire Legal department.

He noted his observations as:
~The need for a shared legal philosophy and level of risk tolerance.
~The oversight and management of Risk Pool activities was limited.

His recommendations were to:
~Provide annual training for the Council regarding the respective roles of the Town Attorney and Town Council in the risk management programs.
~Obtain regular reports from the Risk Pool.
~Revise the budget document to identify the amounts paid by the Town to the Risk Pool for premiums, deductibles and shared costs.
~Periodically conduct a detailed cost benefit analysis of Risk Pool experience.
~Explore alternatives to use of Risk Pool counsel.
~Create a Risk Manager position to monitor the Risk Pool contracts.
~Establish a targeted risk loss prevention program to attempt to minimize numbers of liability and workers compensation claims.
~Adopt a risk management protocol for communication between the Town and the Risk Pool when incidents occur which may give rise to claims against the Town.

Regarding the use of external counsel, Mr. Burkett observed:
~Outside counsel standards and procedures were appropriate.
  *Department has a thorough system of determining usage, acquiring, monitoring and evaluating outside counsel.
~Rates for city-initiated counsel were within reasonable range for services provided.

He recommended to:
~Request qualifications from legal counsel in areas where external counsel was anticipated or used repetitively and establish a list of providers with negotiated rates.
~Assess the usage of external counsel every three years and when staff expertise changes in order to provide reasonable estimates of need for external counsel.
~Provide estimates for budgeting based on a three-year experience rate and provide sufficient contingency for unanticipated litigation.
~Assign a Civil Attorney to be responsible for monitoring and evaluating both the performance of the Risk Pool and external counsel.

Mr. Grogan noted that the Prosecution staffing per 1,000 population was at average. He stated that the annual cases filed per 1,000 population were at mean and median. He noted that the Driving Under the Influence (DUI) cases filed per 1,000 population was at average. He stated that the prosecution clearance rates were also at average. He noted that the terminated cases per Full Time Employee (FTE) were at mean and median.

Mr. Grogan noted that the workload has increased. He stated that the number of DUI’s had significantly increased since 2004. He stated that the increased numbers in drugs and DUI’s were significant as those areas required more Staff time.

Regarding the Prosecution Division’s workload and staffing, he observed the following:
~Workloads were near the average of peers.
~Organizational structure and staffing were appropriate based on peer comparisons.

Mr. Grogan stated that no change in staffing was recommended.

Regarding Management Systems, he stated that:
~Processes should be documented and clarified for current and future staff.
~Management systems reflect best practices.
~There was a need to balance support staff workload.

He recommended to:
~Record Prosecution Division internal support processes and create process maps to retain organizational knowledge.
~Identify Prosecution Division duties that can be transferred from the Senior Paralegal to the Legal Assistant. 

He stated that the paralegal was working at high capacity.

Mayor Loomis thanked Mr. Burkett and Mr. Grogan for the report. He also noted that ownership was taken by the Legal Department as was demonstrated by the attendance of 95% of the Legal staff this evening. He noted that they were a committed group and that kudos have been well earned by all of them.

Council Member Carter stated he was pleased with the results of the report and that he was glad that the Town Attorney and Town Manager have established a system for regular communication.

Mayor Loomis noted that the Legal Department would take the recommendations to heart. He stated that once the new council members came aboard that a presentation from the Risk Pool could be scheduled.

Council Member Parish suggested that copies of the statutory requirements regarding self insurance be distributed to Council to provide a better understanding of what to look for.

Town Manager David Andrews stated that the Risk Pool was created in the 1980’s and that private insurance was reviewed 10 years ago and it could be time to re-assess self insurance.

It was noted that the creation of a Risk Management Manager could be reviewed during the upcoming budget sessions.

Council Member Dankwerth stated that it was gratifying to see a glowing report of the Legal Department.

Discussion ensued regarding:
~Evaluating the cost effectiveness of the risk pool
~Enterprise fund
~Insurance
~The purpose of a Risk Management manager
  *Perform training of staff
  *Would examine risks to Town
  *Could reduce the amount of money spent on the Risk Pool
~Re-evaluating the Amicus system

Mayor Loomis called for a recess at 6:33 p.m. The meeting resumed at 6:42 p.m.

2.

BENEFITS INSURANCE ALTERNATIVE FUNDING SOURCES - PRESENTATION AND DISCUSSION


Human Resources Director Sandra Abbey stated that to remain competitive in the job market, benefits must be kept competitive.

She noted that insurance claims were rising faster than wages.

Ms. Abbey noted that the Human Resources department was developing a long term benefit strategy to review current programs for alternatives to more efficiently fund benefits. She stated that three areas were identified in order to link this to the Town’s Strategic Plan. She noted the focus areas as:
~Financial Sustainability
~Quality of Life
~Leadership Communication

She stated that the first step toward developing the benefits strategy was to identify goals to control benefits costs while maintaining high quality programs for employees. She stated that controlling the cost of claims was important due to the fact that 80% of the cost was for claims; while 20% were administrative costs. She stated the following goals:
~Promote employee wellness
~Increase education and communication regarding the field of health care and health care insurance
~Develop smarter consumer practices and behaviors among employees.
She noted that these goals were identified based on the number of claims. 

Ms. Abbey noted that the purpose of the study session was to present the goals for alternative funding for benefits and to examine the pros and cons of the options presented. 

Ms. Abbey introduced the Town’s benefits consultants from Lovitt and Touche, Chris Helin and Mary Whaley to present the options.

Ms. Helin stated that Council should keep in mind that the more control and flexibility that is offered in a benefits plan the greater the risk.

Ms. Whaley presented a PowerPoint presentation. She stated that there were several options for funding benefits for Council to consider:
~Fully insured
  *Purchase private health insurance for employees
  *Town currently participates in this option
  *Set premiums in advance
    -Tied to group’s experience and the carrier’s pool.
~Fully Insured - Association
  *Set premiums in advance
  *Tied to association or group, all renew same date
  *League of Cities & Towns recently developed a health risk pool.
~Fully Insured - Retention
  *Set premiums in advance
  *+1-3% margin
    -Surplus or deficit handling differs per carrier
  *If claims decrease, the Town would receive a rebate
  *Premiums usually higher
~Self-Funded with Stop Loss
  *Set premiums for Administration and Stop Loss
  *Claims funded as paid by administrator
  *Maximum claims set at 25% above expected
~Self-Funded without Stop Loss
  *1,000+ minimum enrolled employees

Ms. Whaley stated that risk was limited when fully insured, fully insured with an association or retention accounting due to the advanced knowledge of the premium for the coming year.

She stated that the self funded with stop loss category both increased and decreased the risks. She noted in her example that if it was a good year, the premiums would be lower, however if there were numerous claims, then the premiums would increase. She clarified that during the first year only when there is a transition from a fully insured plan to a self funded plan, there would be a one time cash advantage. She stated that the Town would not pay premiums but rather the administrative fees and claims for people that have open claims.

Ms. Whaley stated that Benefit Plan Design would allow the Town to determine items such as the cost of co-payments and deductible amounts; the plan could be built according to Town specifications.

She stated that H-Pact organizations had four predetermined plans and allowed companies to choose two of them. She noted that they lack flexibility and variety.

She stated that with Self Funded Stop Loss there was more flexibility.

Discussion ensued noting the following:
~When benefits are self-funded, the Town would be bound only by Federal mandates and would not need to comply with State mandates regarding insurance.
~Cash flow incentives
~Clarification on the impacts to the employee
  *Risks and costs
~Town could control employee costs through Benefit Plan Design

It was clarified that:
~Council Members wanted to know the bottom line of each category.
~The initial negotiations with Aetna Health Insurance Company (the Town’s current provider) called for a 30% increase for the coming year.
~Other providers were reviewed
  *Some premiums would be a 40% increase
  *One provider’s premium warranted a 17% increase 
~The Town’s claims were on the rise. 
  *Utililization has been in the high 80’s to low 90’s
    - Insurance companies prefer claims at 75

3.

CONSUMPTION AND/OR SALE OF ALCOHOLIC BEVERAGES ON TOWN OWNED PROPERTY - PRESENTATION AND DISCUSSION


Parks and Recreation Director Ainsley Reeder stated that currently alcohol was prohibited on Town park properties, though allowed on other Town properties. She stated that the Parks and Recreation Advisory Board (PRAB) researched this issue. She informed Council that they found an increase in the number of cans and bottles in park trash receptacles which indicated unregulated alcohol consumption has occurred.

Ms. Reeder informed Council that the Greater Oro Valley Arts Council (GOVAC) would like to sell alcohol at their functions that take place on Town property.

Ms. Reeder stated that the City of Tucson sells beer permits for their ramadas. She noted that for City-sponsored events, special contracts were made with vendors with appropriate licenses to sell alcohol.

She noted that the Town of Marana sold permits when renting ramadas. She stated, however, that the Town of Marana had gravitated toward sponsoring more family events without alcohol vending.

It was clarified that:
~25% of people who rent ramadas inquired whether alcohol consumption was permitted.
  *Typically those customers choose to have their event elsewhere.
~The liability related to alcohol consumption would be held by those who furnish the alcohol.
~The Town would not be liable so long as the Town was not the vendor of the alcohol.

Council Member Carter stated that he wanted liability insurance fully researched prior to proceeding further.

Council Member Parish left the meeting at 8:02 p.m.

Mayor Loomis suggested that PRAB review the issues raised as well as the elements in the PRAB report; then recommend to Council whether an ordinance should be initiated. 

ADJOURNMENT

MOTION: A motion was made by Council Member Carter and seconded by Vice Mayor Kunisch to adjourn at 8:08 p.m.

MOTION carried, 6-0.