Finance and Personnel Committee of the Lee’s Summit City Council Minutes Wednesday, March 25, 2009 5:45 p.m. City Hall Chambers

Councilmembers: Councilmember Ed Cockrell, Chair – Present Councilmember Randy Rhoads – Present Councilmember Kathy Hofmann – Present Councilmember Jim Hallam - Present

Staff: Conrad Lamb – Finance Director Teresa Williams – City Attorney Steve Arbo – City Manager Brian Scott – Assistant City Manager Darlene Pickett – Assistant Finance Director Kari Holwick – Budget Officer Joe Piccinini – Police Chief Scott Lyons – Police Major I Michael Black – Police Captain Bill Ward – Purchasing Manager Randy Dickey – Chief Technology Officer Pam DeVault – Court Administrator

Chairman Cockrell opened the meeting at 5:45 p.m. Attendance was taken.

Item 1 – Presentation of the Enterprise Resource Planning (ERP) Requirement Analysis Findings

Randy Dickey stated the existing AS400 based Financial/HR/Utility billing software from New World Systems has been in place for over 20 years at the City. The system provides many key core services and also functions as a primary integration point for other related processes and systems. The vendor is on a path to migrate customers from the AS400 to a Windows based solution and the AS400 based software is no longer being upgraded and will likely be discontinued in the future.

Mr. Dickey also stated Schafer Consulting was selected as the vendor of choice to complete the Requirements Analysis for the replacement of the City’s Enterprise Resource Planning (ERP) system. Their findings and recommendations are as follows:

-Information is hard to access and share because the City currently uses several disparate systems.

F&PC Minutes 3-25-09 -It is costly and inefficient for employees to perform a significant amount of their work using manual processes. -The existing systems do not support processes that the users have identified as necessary.

-The existing systems do not meet the City’s reporting needs.

-Lack of System security and lack of audit trails.

-Work processes need to be improved.

It should be noted that the City’s potential search for a new ERP system is occurring at an opportune time where shifts in City service demands and the current economic climate may present real opportunities to capitalize on reallocation of resources to best realize savings from process improvements.

In addition to these financial benefits, many non-financial benefits could be realized. These include improved service to constituents, vendors, customers and City personnel, improved internal controls, improved data integrity, better analytical and reporting tools for decision making, more unified technology and seamless integration.

Schafer Consulting’s recommendation indicates that employees who work with the current version of New World System are relying on inefficient processes to complete their day-to-day tasks. Employees must frequently work around the system instead of working with it. Furthermore, there are significant gaps between the features users have stated the need in an ERP system as compared to what the current system can do. The results strongly indicate that the City should move forward with the purchase of a new ERP system. Schafer Consulting recommends Option 4 for the City to initiate a RFP process for the replacement of its existing New World System with an Enterprise Total Solution, which could provide the flexibility of reviewing multiple Tier 2 ERP vendors along with Point Solution vendors. This flexibility would minimize the risk of functional gaps, as many viable ERP vendors may score well overall, but may still lack the required functionality in certain modules.

Councilmember Hallam asked did it matter in terms of what training is going on and implementation of this type of project. Would it be better to do it when there is not much going on or better to do it when there is a lot going on? Mr. Dickey stated it would be better to do it during times when there are the least demands on the system.

Councilmember Rhoads asked if the system would be phased in or done all at once. Mr. Dickey replied it would be phased in, with a defined start and finish date.

Councilmember Hofmann asked how “user friendly” will it be for staff. Mr. Dickey stated on the long term basis it will be extremely more “user friendly” than the current system.

Presentation only.

At this time Chairman Cockrell asked that the purchasing items be presented next before the budget items. 2 F&PC Minutes 3-25-09 Item 3 – Award of Bid No. 09-075 for a One Time Purchase of (19) Rock River AR- 15 Assault Rifles and Ammunition in the Amount of $48,191

Chief Piccinini stated the Police Department would like to purchase 19 Rock River AR- 15 Assault Rifles and ammunition. The amount of ammunition has been reduced from 30,000 rounds in the amount of $8,480.10 to 10,000 rounds in the amount of $3,200. The total trade-in of miscellaneous firearms is $11,846 with a net cost of $31,065.50. Chief Piccinini stated the department had not purchased new assault rifles since 2000.

Bids were evaluated by staff from the Police Department and the Purchasing Department for the lowest and best responsive bid that met all specifications stated in the Invitation to Bid. The bid from Bear Creek Outfitters/Tactical offered the best responsive bid that met all minimum specifications and they are the low bidder overall.

By using funds obtained by trading in older weapons and supplementing that with funds from the law enforcement federal asset forfeiture account, the program could move forward and improve the PD’s capabilities without spending new tax dollars.

Councilmember Hallam asked if training was done with live ammunition. Chief Piccinini replied yes. Councilmember Hallam then asked if by reducing the amount of ammunition would that limit the amount of training officers received. Chief Piccinini replied no. Currently there is an ammunition shortage so the department is going to do a taking the longer turn-around time into consideration when ordering.

Councilmember Cockrell stated there were two bidders and it looked like B&R Guns were the lower bidder. Captain Black stated B&R Guns did not want to bid on ammunition. If they were required to do so, they would charge $.45 a rifle round whereas Bear Creek bid $.37 a round and on pistol rounds B&R would bid $.32 and Bear Creek bid $.28. Councilmember Cockrell asked that the bid table be modified to reflect these prices.

Councilmember Rhoads made a motion to approve Award of Bid #09-075 for a one time purchase of nineteen Rock River AR-15 Assault Rifles and ammunition less the trade in of miscellaneous firearms to Bear Creek Outfitters/Tactical. Councilmember Hallam seconded the motion. The vote was unanimous.

Item 4 – Award of Bid No. 09-091 for a Six Month Contract for Radio Feasibility Study for Police, Fire and various other City departments to Tusa Consulting Services in the amount not to exceed $46,478.75

Chief Piccinini stated the City’s current radio system is a conventional repeater system that has the following issues for consideration:

1. Technology is over 20 years old 2. System has dead zones 3. System does not have capabilities inside some buildings 4. Possibility for public safety hazard 5. No radio engineer on city staff 3 F&PC Minutes 3-25-09 6. Unable to meet Federal mandate on reducing radio bandwidth (2013) (25KHZ to 12.5 KHZ) 7. Unable to meet a future Federal mandate to further reduce the bandwidth (6.25 KHZ) 8. There will be a need for a coverage study to comply with the bandwidth reduction and a need to add radio towers 9. No interoperability capability 10.No seamless communications capability

Also, in order to meet Federal requirements, all systems and equipment recommendations must be consistent with the Dept. of Homeland Security P25/ISSI standards and SAFECOM requirements (redundancy and backup generators).

Chief Piccinini stated MARC’s goal is to have a system where each city can communicate seamlessly with each other.

Councilmember Hallam stated he felt some of the questions listed had already been answered and wouldn’t this eventually come back to the Committee in an RFP. Chief Piccinini stated yes, but with the study staff would be able to fill out the RFP with the knowledge of what exactly is needed.

Councilmember Cockrell stated when looking at the Tusa bid it looks like this is being bid in three phases and what staff is currently requesting is just Phase One which is $46,478.75. Then Phase Two would cost $7,477.80 and Phase Three would cost $38,655.90. Councilmember Cockrell stated staff should ask for the total amount instead of bringing each phase to the Committee and see if a better price could be negotiated for all three.

Bill Ward stated ultimately staff would like to gather information for the RFP by asking this firm to give answers to our questions. Major Lyons stated the City is not tied to using the same company for all phases and that this study is done in phases because they build upon each other. Councilmember Cockrell stated the City should spend whatever it cost and have one consultant do all the phases at once.

Councilmember Rhoads stated it may have been a case of staff trying to stay under budget. Councilmember Cockrell stated that could be, if so then staff needs to ask for more money for the project.

Chief Piccinini stated budget was the reason for bringing this survey to the Committee in phases and he would work with the Finance Department regarding the money needed.

No committee action taken at this time. This item will be presented again at a later date.

Item 5 – Approval of Contract with United Missouri Bank for Purchasing Card Services 4 F&PC Minutes 3-25-09 Bill Ward stated a Purchasing Card (P-Card) is a form of a company credit card that allows goods and services to be procured without utilizing a traditional purchasing process. It was designed to help agencies maintain control of small purchases while reducing the administrative cost associated with those purchases. P-Card users make their purchases for the goods and core services from the suppliers authorized by management. On behalf of the agency the bank pays the supplier with 72 hours and at the end of the month (billing cycle) the agency pays the bank the pass through amount.

The City has been using P-cards for over 10 years. The cooperative language in the State of Missouri contract with United Missouri Bank (UMB) allowed the City to use the contract without need of the competitive bid process. At that time a contract was signed by the then City Administrator with UMB. Two recent audits (one in Account Payable, the other in Purchasing) recommended that the City officially move from its “pilot” card program to an official P-card Program. In April 2008 the decision was made to transfer the day-to-day administrative control of the P-card Program from Finance to the Purchasing Division while the accounting functions would be retained by the Finance Division. Mandatory Purchasing Card training was conducted jointly by the Purchasing and Finance Divisions and new Purchasing Cardholder Agreement Forms were signed by all existing and new P-card holders as part of the training. The official transition date was July 1, 2008.

In review of the existing contract with UMB, it was determined that a new contract was appropriate. Additionally in as much as the pass through amount is now bordering a million dollars annually, it is considered prudent that the Council be notified of the contract at this juncture. The State of Missouri Contract for this service is good through February 2016. Our agreement allows the City to terminate the contract with 30 days written notice.

During FY07-08 the pass through amount paid to UMB was $901,940.13. Pass through payments so far in FY08-09 are $719,216.94 with four months remaining.

Councilmember Cockrell asked if there was policy with the bank that this card could only be used for goods or services. Conrad Lamb stated each card can be set with dollar limits and types of purchases; which has been done.

Councilmember Hallam made a motion to recommend to the City Council approval of the Contract with United Missouri Bank for Purchasing Card Services for the City of Lee’s Summit. Councilmember Hofmann seconded the motion. Vote was unanimous.

Budget Presentation – Police

Chief Piccinini presented the FY2009-2010 Proposed Budget Presentation for the Police Department.

Significant Changes and Initiatives include:  Facilitate the implementation of technological advances in order to improve the effectiveness and efficiency of police services by completing the migration of in- 5 F&PC Minutes 3-25-09 car video cameras to digital and installing wireless PC cards on all mobile data terminals (MDT’s) in each patrol car.  Institute community-oriented policing philosophy through district realignment, training and tracking foot patrol, saturation patrol and neighborhood watch  Continue to work toward full accreditation from the Commission on Accreditation for Law Enforcement Agencies (CALEA).  Provide the community with upgraded animal control services  Seven new police officers and one communication specialist are included in Police’s fiscal year 2009-2010 budget.

Budget Overview – Total Expenses FY 2010: $18,143,250 Percentage Increase/Decrease from FY2009 Budget: 6.3% Percentage Increase/Decrease from FY2009 Projection: 6.3%

Forecasted Personnel Needs for Future Years – This is year two of a four year plan to increase the number of Police Officers.

Major Expenses over $30,000 – Complete migration of video in-car cameras from 8mm to digital (year 3 of 3-yr plan $47,600)

Budget Presentation – Municipal Court

Pam DeVault presented the FY 2009-2010 Proposed Budget for Municipal Court.

Significant Changes include:  Enhanced prisoner review process, including 48-hour review, reducing costs of pre-trial confinement  Utilization of CourTools, including public and court staff surveys, identifying areas needing improvement as well as areas of success  Implementation of Division 263 all day dockets, improving customer service and enhancing the administration of justice  Implementation of x-ray and screening devices, resulting in a safer, secure environment in the courtroom  Utilization of bi-lingual public defender as well as enhanced application process, resulting in more efficient and cost effective operation  Expand part time Chief Bailiff to full time Court Security Officer to increase safety during court hours of operation rather than only during court sessions

Budget Overview – Total Expenses FY2010 - $821,295 Percentage Increase/Decrease from FY 2009 Budget – 3% Percentage Increase/Decrease from FY 2009 Projection – 2%

Personnel, Capital and ITS Expansion Requests –

6 F&PC Minutes 3-25-09 Converting part-time Bailiff to full time Court Security Officer effective April 2010 – annual cost of $41,873, less annual cost for current part time Bailiff of $9,380. Net additional cost for 2010 is $8,123.

Forecasted Personnel Needs for Future Years – Additional Probation personnel as program grows and expands

Schedule of Fees; Additions, Changes, Increases or Decreases – Increase court costs by $.50 as allowed by law, to round to the nearest dollar.

Budget Presentation – Law Department

Teresa Williams presented the FY 2009-2010 Proposed Budget Presentation for the Law Department.

Significant changes include –  Update and finalize the law Department’s Procedures Manual to correspond with current practices.  Continue to review and update existing ordinances for more effective enforcement.

The Law Department’s budget has decreased 10% over the FY 2008-2009 amended budget. The largest decrease (-25%) is in the Professional fees expense with the anticipated increase usage of in-house legal services. Travel, training and subscription expenses have been reduced over 20% each.

Budget Overview – Total Expenses FY 2010 – $1,132,084 Percentage Increase/Decrease from FY 2009 Budget – -10% Percentage Increase/Decrease from FY2009 Projection – -4%

Major Expenses over $30,000 – Total professional fees are $206,250 and are allocated as follows: $153,750 for MOPERM litigation; $37,500 for legal compliance and $15,000 for land use/support to development program.

Significant Department Changes include reduction of one Assistant City Attorney which was replaced by a paralegal position and the addition of a part time receptionist in the Civil Division. The department will begin to ensure timely processing of collections, maintain a contract tracking system and more litigation will be handled in house.

Budget Presentation – Rollover Budget Amendment Kari Holwick presented an ordinance approving Amendment No 1 to Ordinance No. 6638 which adopted the budget for Fiscal Year ending June 30, 2009, by revising the authorized budget expenditures of the Capital Project funds, Internal Service funds and the Road & Bridge Escrow fund of the City of Lee’s Summit, Missouri.

Each fiscal year’s budget ordinance includes only the funding amounts for that year’s operations and funds needed for new construction projects or subsequent phases of 7 F&PC Minutes 3-25-09 previously funded projects. Typically capital projects require more than one year to complete and to accurately include all funding available an adjustment is necessary to roll the unexpended portion of previously funded capital projects to the new fiscal year.

This budget amendment consists of:

Capital project rollovers totaling $129,083,890 and includes 82 capital improvement projects and 1 road & bridge escrow project.

32 open ITS projects totaling $1,098,837

6 fleet items totaling $436,349. Fleet purchases to be rolled include two ambulances, one spray rig (for grass rig) and three animal control boxes (for cab & chassis).

The total Budget Amendment for all funds is $130,619,076.

Councilmember Hofmann made a motion to recommend City Council approval of Amendment No. 1 to Ordinance No. 6638, which adopted the budget for fiscal year ending June 30, 2009 by revising the authorized budget expenditures of the Capital Project funds, Internal Service funds and the Road & Bridge escrow fund of the City of Lee’s Summit, Missouri. Councilmember Hallam seconded the motion. The vote was unanimous.

Councilmember Cockrell asked if the Mayor and Council’s budget was included in the Administration Budget presentation. Mr. Lamb replied yes. Councilmember Cockrell stated he would like those numbers pulled out of the budget and given to the Committee in a segregated format.

Item # 6 Discussion of 2009 Property Tax Estimate

Conrad Lamb stated last year Senate Bill 711 was signed by the Governor amending Section 137 RSMo revising the calculation of property tax rates and became effective for the 2009 Property Taxes. One of the provisions of the bill requires all political subdivisions in a first class county with a charter form of government to project a nonbinding tax rate estimate for the year and return the projected tax rates to the County Clerk no later than April 8th. The county will then include an estimate of the actual property taxes along with the reassessment notices that will be sent out in late April.

Mr. Lamb stated if the City did not comply with this requirement, the City would automatically be subject to a 20% reduction in our levies.

Jackson County sent the City a preliminary 2009 Notice of Assessed Valuation of $1,605,728,065 net of New Construction ($11,963,901). This is $27,909,318 or 1.7% less than the finally equalized AV of $1,633,637,383 set in August for the 2008 tax year. The county did not provide an estimate for 2009 Personal Property or State Assessed property but instead used the 2008 amounts. These amounts could further impact the final tax levy.

8 F&PC Minutes 3-25-09 Per the amended Section 137 RSMo and Senate Bill 711 the City is entitled to roll the levy up in a year that we have incurred a decrease in assessed evaluation. The City could also take a voluntary reduction and hold the levy at the current rate which is what the City did last year.

Staff is recommending that the City roll up not only the General Fund levy which equates to a levy increase of $.0148 but also $.0026 for the Park levy. This equates to approximately $240,000 in General Fund taxes and $42,000 in Park taxes. The Debt Service Levy would be held constant to comply with the provisions of the “No Tax Increase” bond election.

Councilmember Cockrell stated because the City is not bound to this, he would not roll the levy up. Councilmembers Hofmann and Hallam agreed. Councilmember Hallam stated he would like to study the numbers further and have a full debate on the subject before he decided to roll the levy up.

Mr. Lamb stated when the budget was prepared the City anticipated receiving the same amount of revenue in the General Fund from property taxes. Steve Arbo stated staff anticipated some level of reduction (10%) in the assessed values when the budget was presented. Mr. Arbo stated if we wait until August staff should have a better idea of the impact on the budget.

Mr. Lamb emphasized that with Senate Bill 711, if a decision is made to do a voluntary roll back this year it will be permanent and the only way to change it would be by a vote of the people. Mr. Lamb stated staff is looking for direction on which rate to put in the resolution to be turned into the County Clerk by April 8 th. Councilmember Cockrell stated at this time show the same rate as last year. Then any changes will be made by August.

Councilmember Hofmann asked if this will happen again next year. Mr. Lamb stated this only applies in reassessment years which are in odd number years.

All Committee members agreed not to roll the levy up at this time.

Next meeting: Tuesday, April 7, 2009 at 5:45 p.m.

Meeting was adjourned at 7:30 p.m.

9 F&PC Minutes 3-25-09