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HomeMy WebLinkAbout04-244 Resolution No.04-344 RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT WITH VIRCHOW KRAUSE & COMPANY, LLP FOR AN ANALYSIS OF CITY COSTS FOR PROVIDING OVERTIME COMPENSATION FOR POLICE AND FIRE SERVICES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that David M.Dorgan,City Manager,and Dolonna Mecum,City Clerk,be and are hereby authorized and directed to execute an agreement on behalf of the City of Elgin with Virchow Krause &Company, LLP for an analysis of city costs for providing overtime compensation for police and fire services,a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: December 15, 2004 Adopted: December 15, 2004 Vote: Yeas: 5 Nays: 1 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk Draft 11/16/04 AGREEMENT THIS AGREEMENT, made and entered into this /,msµ day of pcc 4en./3,bA1, 2004 , by and between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as "CITY" ) and VIRCHOW KRAUSE & COMPANY, LLP, a Wisconsin based limited liability partnership (hereinafter referred to as "CONSULTANT" ) . WHEREAS, the CITY desires to engage the CONSULTANT to furnish certain professional services in connection with an analysis of the CITY' s costs for providing overtime compensation for police and fire services (hereinafter referred to as the "PROJECT" ) ; and WHEREAS, the CONSULTANT represents that it has the necessary expertise and experience to furnish such services upon the terms and conditions set forth herein. NOW, THEREFORE, for and in consideration of the mutual undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the CITY does hereby retain the CONSULTANT to provide the services for the PROJECT as described herein, subject to the following terms and conditions : 1. SCOPE OF SERVICES CONSULTANT shall provide to the CITY the services for the PROJECT as set forth in CONSULTANT' s proposal for the PROJECT entitled "Proposal for City of Elgin, Illinois Analysis of the City' s Costs for Providing Overtime Compensation for Police Fire Services" dated August 20, 2004, revised October, 2004, a copy of which is attached hereto as Exhibit 1 . All work hereunder shall be performed by the CONSULTANT under the direction of the CITY' s Assistant City Manager Sean R. Stegall (hereinafter referred to as the "DIRECTOR" ) . 2 . PROGRESS SCHEDULE CONSULTANT shall perform the services and shall provide the PROJECT deliverables and on-site presentations according to the Project Timeline as set forth in Exhibit 1 . 3 . WORK PRODUCTS All work products prepared by the CONSULTANT pursuant hereto including, but not limited to, reports, deliverables, designs calculations, work drawings, studies, photographs, models and recommendations shall be the property of the CITY and shall be delivered to the CITY upon request of the DIRECTOR provided, however, that the CONSULTANT may retain copies of such work products for its records . 4. PAYMENTS TO THE CONSULTANT A. For services provided by the CONSULTANT pursuant to this agreement the CITY shall reimburse the CONSULTANT at the hourly rates for its personnel employed on the PROJECT as set forth in Exhibit 2 attached hereto, with the total fees and expenses to be paid to the CONSULTANT not to exceed $30, 000 regardless of the actual time expended or costs incurred by the CONSULTANT unless substantial modifications to the PROJECT are authorized in writing by the CITY. B. The CITY shall make periodic payments to the CONSULTANT based upon actual progress within thirty (30) days after receipt and approval of invoice. Full payments for each task shall not be made until the task is completed and accepted by the DIRECTOR. 5. INVOICES A. The CONSULTANT shall submit invoices in a format approved by the CITY. Progress reports will be included with all payment requests . B. The CONSULTANT shall maintain records showing actual time devoted and cost incurred. The CONSULTANT shall permit the authorized representative of the CITY to inspect and audit all data and records of the CONSULTANT for work done under this Agreement . The CONSULTANT shall make these records available at reasonable times during the Agreement period, and for a year after termination of this Agreement . 6 . TERMINATION OF AGREEMENT Notwithstanding any other provision hereof, the CITY may terminate this Agreement at any time upon fifteen (15) days prior written notice to the CONSULTANT. In the event that this Agreement is so terminated, the CONSULTANT shall be paid for services actually performed and reimbursable expenses actually incurred prior to termination, except that reimbursement shall not exceed the task amounts set forth under Paragraph 4 above. 7 . TERM This Agreement shall become effective as of the date the CONSULTANT is given a notice to proceed and, unless terminated for cause or pursuant to Article 6, shall be deemed concluded on the date the CITY determines that all of the CONSULTANT' s work under this agreement is completed. A determination of completion shall not constitute a waiver of any rights or claims which the CITY may have or thereafter acquire with respect to any term or provision of the Agreement . - 2 - 8. NOTICE OF CLAIM If the CONSULTANT wishes to make a claim for additional compensation as a result of action taken by the CITY, the CONSULTANT shall give written notice of his claim within 15 days after occurrence of such action. No claim for additional compensation shall be valid unless so made. Any changes in the CONSULTANT' s fee shall be valid only to the extent that such changes are included in writing signed by the CITY and the CONSULTANT. Regardless of the decision of the DIRECTOR relative to a claim submitted by the CONSULTANT, all work required under this Agreement as determined by the DIRECTOR shall proceed without interruption. 9 . BREACH OF CONTRACT If either party violates or breaches any term of this Agreement, such violation or breach shall be deemed to constitute a default, and the other party has the right to seek such administrative, contractual or legal remedies as may be suitable to the violation or breach; and, in addition, if either party, by reason of any default, fails within fifteen (15) days after notice thereof by the other party to comply with the conditions of the Agreement, the other party may terminate this Agreement . 10 . INDEMNIFICATION To the fullest extent permitted by law, CONSULTANT agrees to and shall indemnify, defend and hold harmless the CITY, its officers, employees, agents, boards and commissions from and against any and all claims, suits, judgments, costs, attorneys fees, damages or other relief, including but not limited to workers compensation claims, in any way resulting from or arising out of negligent actions or omissions of the CONSULTANT in connection herewith, including negligence or omissions of employees or agents of the CONSULTANT arising out of the performance of this Agreement . In the event of any action against the CITY, its officers, employees, agents, boards or commissions, covered by the foregoing duty to indemnify, defend and hold harmless such action shall be defended by legal counsel of the CITY' s choosing. The provisions of this paragraph shall survive any completion, expiration and/or termination of this agreement . 11. NO PERSONAL LIABILITY No official, director, officer, agent or employee of the CITY shall be charged personally or held contractually liable under any term or provision of this Agreement or because of their execution, approval or attempted execution of this Agreement . - 3 - 12 . INSURANCE A. Comprehensive Liability. The CONSULTANT shall provide, pay for and maintain in effect, during the term of this Agreement, a policy of comprehensive general liability insurance with limits of at least $1, 000, 000 aggregate for bodily injury and $1, 000, 000 aggregate for property damage . The CONSULTANT shall deliver to the DIRECTOR a Certification of Insurance naming the CITY as additional insured. The policy shall not be modified or terminated without thirty (30) days prior written notice to the DIRECTOR. The Certificate of Insurance which shall include Contractual obligation assumed by the CONSULTANT under Article 10 entitled "Indemnification" shall be provided. This insurance shall apply as primary insurance with respect to any other insurance or self-insurance programs afforded to the CITY. There shall be no endorsement or modification of this insurance to make it excess over other available insurance, alternatively, if the insurance states that it is excess or prorate, it shall be endorsed to be primary with respect to the CITY. B. Comprehensive Automobile Liability. Comprehensive Automobile Liability Insurance covering all owned, non- owned and hired motor vehicles with limits of not less than $500, 000 per occurrence for damage to property. C. Combined Single Limit Policy. The requirements for insurance coverage for the general liability and auto exposures may be met with a combined single limit of $1, 000 , 000 per occurrence subject to a $1, 000, 000 aggregate . D. Professional Liability. The CONSULTANT shall carry CONSULTANT' s Professional Liability Insurance Covering claims resulting from error, omissions or negligent acts with a combined single limit of not less than $1, 000, 000 per occurrence . A Certificate of Insurance shall be submitted to the DIRECTOR as evidence of insurance protection. The policy shall not be modified or terminated without thirty (30) days prior written notice to the DIRECTOR. 13 . NONDISCRIMINATION In all hiring or employment made possible or resulting from this Agreement, there shall be no discrimination against any employee or applicant for employment because of sex, age, race, color, creed, national origin, marital status, of the - 4 - presence of any sensory, mental or physical handicap, unless based upon a bona fide occupational qualification, and this requirement shall apply to, but not be limited to, the following: employment advertising, layoff or termination, rates of pay or other forms of compensation and selection for training, including apprenticeship. No person shall be denied or subjected to discrimination in receipt of the benefit of any services or activities made possible by or resulting from this Agreement on the grounds of sex, race, color, creed, national origin, age except minimum age and retirement provisions, marital status or the presence of any sensory, mental or physical handicap. Any violation of this provision shall be considered a violation of a material provision of this Agreement and shall be grounds for cancellation, termination or suspension, in whole or in part, of the Agreement by the CITY. 14 . ASSIGNMENT AND SUCCESSORS This Agreement and each and every portion thereof shall be binding upon the successors and the assigns of the parties hereto; provided, however, that no assignment shall be made without the prior written consent of the CITY. 15 . DELEGATIONS AND SUBCONTRACTORS Any assignment, delegation or subcontracting shall be subject to all the terms, conditions and other provisions of this Agreement and the CONSULTANT shall remain liable to the CITY with respect to each and every item, condition and other provision hereof to the same extent that the CONSULTANT would have been obligated if it had done the work itself and no assignment, delegation or subcontract had been made . Any proposed subcontractor shall require the CITY' s advanced written approval . 16 . NO CO-PARTNERSHIP OR AGENCY This agreement shall not be construed so as to create a partnership, joint venture, employment or other agency relationship between the parties hereto. 17 . SEVERABILITY The parties intend and agreed that, if any paragraph, sub- paragraph, phrase, clause or other provision of this Agreement, or any portion thereof, shall be held to be void or otherwise unenforceable, all other portions of this Agreement shall remain in full force and effect . - 5 - 18. HEADINGS The headings of the several paragraphs of this Agreement are inserted only as a matter of convenience and for reference and in no way are they intended to define, limit or describe the scope of intent of any provision of this Agreement, nor shall they be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof . 19 . MODIFICATION OR AMENDMENT This Agreement and its attachments constitutes the entire Agreement of the parties on the subject matter hereof and may not be changed, modified, discharged or extended except by written amendment duly executed by the parties . Each party agrees that no representations or warranties shall be binding upon the other party unless expressed in writing herein or in a duly executed amendment hereof, or change order as herein provided. 20 . APPLICABLE LAW This Agreement shall be deemed to have been made in, and shall be construed in accordance with the laws of the State of Illinois . Venue for the resolution of any disputes or the enforcement of any rights pursuant to this agreement shall be in the Circuit Court of Kane County, Illinois . 21. NEWS RELEASES The CONSULTANT may not issue any news releases without prior approval from the DIRECTOR, nor will the CONSULTANT make public proposals developed under this Agreement without prior written approval from the DIRECTOR prior to said documentation becoming matters of public record. 22 . COOPERATION WITH OTHER CONSULTANTS The CONSULTANT shall cooperate with any other consultants in the CITY' s employ or any work associated with the PROJECT. 23 . INTERFERENCE WITH PUBLIC CONTRACTING The CONSULTANT certifies hereby that it is not barred from bidding on this contract as a result of a violation of 720 ILCS 5/33E et seq. or any similar state or federal statute regarding bid rigging. 24 . SEXUAL HARASSMENT As a condition of this contract, the CONSULTANT shall have written sexual harassment policies that include, at a minimum, the following information: - 6 - A. the illegality of sexual harassment ; B. the definition of sexual harassment under state law; C. a description of sexual harassment, utilizing examples; D. the vendor' s internal complaint process including penalties; E. the legal recourse, investigative and complaint process available through the Illinois Department of Human Rights, and the Illinois Human Rights Commission; F. directions on how to contact the department and commission; G. protection against retaliation as provided by Section 6- 101 of the Human Rights Act . A copy of the policies must be provided to the Department of Human Rights upon request 775 ILCS 5/2-105 . 25. WRITTEN COMMUNICATIONS All recommendations and other communications by the CONSULTANT to the DIRECTOR and to other participants which may affect cost or time of completion, shall be made or confirmed in writing. The DIRECTOR may also require other recommendations and communications by the CONSULTANT be made or confirmed in writing. 26 . NOTICES All notices, reports and documents required under this Agreement shall be in writing and shall be mailed by First Class Mail, postage prepaid, addressed as follows : A. As to CITY: Sean R. Stegall Assistant City Manager City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 B. As to CONSULTANT: e Virchow Krause & Company 225 N. Michigan Avenue, 11th Floor Chicago, IL 60601-7601 - 7 - IN WITNESS WHEREOF, the parti hereto have entered into and executed this Agreement as of /S , 2004 . FOR THE CITY: FOR THE CONSULTANT: By y �c�,, B "= City Manager Attest : Ci y Clerk F:\Legal Dept\Agreement\VirchowKrause-Consulting.doc - 8 - Proposal for City of Elgin, Illinois Analysis of the City's Costs for Providing Overtime Compensation for Police Fire Services //1416, VirchowKrause &company 225 N.Michigan Avenue, 11th Floor Chicago,IL 60601-7601 800.362.7301,ext.2329 www.virchowkrause.com Michael Ley,CMC,Partner 608.240.2329 800.362.7301,ext.2329 mley@virchowlcrause.com August 20,2004 Revised October ,2004 EXHIBIT 1 Table of Contents TRANSMITTAL LETTER PART I: INTRODUCTION: FIRM QUALIFICATIONS AND EXPERIENCE 1 A. About Virchow,Krause&Company,LLP 1 B. Why Virchow Krause is Unique 2 C. Independence 3 D. Understanding of Project 3 PART 2: SCOPE OF SERVICES 5 A. Project Approach 5 B. Work Plan Tasks—Project Methodology 6 C. Project Deliverables and On-Site Presentations 8 D. Expectations of the City 9 E. Project Timeline 10 PART 3: EXCEPTIONS—ALTERNATIVES TO SCOPE OF SERVICES 11 PROJECT REFERENCES AND RELEVANT EXPERIENCE 12 TEAM QUALIFICATIONS 15 PART 4: REQUIRED FORMS 19 RESUMES 20 Virchow Krause &company Your Most Valued Advisor virchowkrause.com Virchow Krause &company TRANSMITTAL LETTER August 20,2004 Ms.Gail Cohen,Purchasing Director City of Elgin 150 Dexter Court Elgin,Illinois 60120 Dear Ms. Cohen: Virchow,Krause&Company,LLP(Virchow Krause)and its law enforcement specialist subcontractor,Stanley Klein,and fire services specialist subcontractor,David Berousek,are pleased to submit this proposal to provide an analysis of the city's costs for providing overtime compensation for police and fire services for the City of Elgin. This proposal is in response to the city's request for proposals(RFP 04-081). Given the commitment of resources for police and fire services and the large expenditure of personnel related costs in these important public safety areas,we commend the City of Elgin for considering an independent review of police and fire department overtime utilization and practices. It is our understanding that the purpose of this study is to review and make recommendations related to an analysis of budgeted funds and actual costs for police and fire department overtime,with overtime utilization categorized by type. Additionally,we understand the city is interested in learning whether the police and fire departments are effectively utilizing personnel time,and whether policies or practices could be revised to reduce overtime expenditures. We believe that we are uniquely qualified to perform this analysis,and that our recommendations will present creative,yet practical and cost-effective solutions to address city's specific needs and circumstances. As the city considers which firm is best able to provide these services,we believe there are several factors that distinguish Virchow Krause: Commitment: Virchow Krause has a long-standing tradition and solid reputation for providing high quality consulting,auditing,and accounting services to local government. To illustrate that commitment,we have a separate Public Sector Consulting Group dedicated to providing quality-consulting services to our public sector clients. We demonstrate this commitment to quality services through the high caliber of our work products and our project management,along with many additional client assignments. Experience: We understand the needs and pressures facing local law enforcement agencies. Our firm's continuing relationships with hundreds of governmental clients provides a strong foundation to meet its management consulting needs. Our project team has extensive public sector experience,both in a direct service and consulting capacity,and includes individuals with extensive backgrounds in law enforcement and fire management and administration, including over 30 years of direct hands-on and consulting experience with our law enforcement specialist subcontractor, Stanley Klein, and over 25 years with our fire services specialist subcontractor,David Berousek. Additionally,members of the proposed project team have performed similar studies for the Wisconsin Counties of Dane and Waukesha and have performed numerous operational and management reviews of police and fire operations in northern Illinois and throughout Wisconsin. Approach: We constantly strive to be fair and objective in our approach to management consulting services. The city's commitment to having an overtime analysis study performed shows an interest in ensuring optimization of city resources in meeting law enforcement and fire prevention needs. In performing our review,we are not only interested in identifying those areas where opportunities for cost containment and improvement exist,but also believe that it is important to note what is working well within the organization. 225 N. Michigan Avenue• 11th Floor• Chicago, IL 60601-7601 •Tel: 312.819.4300 • Fax: 312.819.4343 •www.virchowkrause.com Virchow,Krause&Company,LLP • Certified Public Accountants&Consultants •An Independent Member of Baker Tilly International • Ms.Gail Cohen,Purchasing Director City of Elgin,Illinois August 20,2004 Page 2 Communication: We believe that regular communication between the project team and the city is critical to an effective study. To facilitate communication and coordination of this study effort,Virchow Krause will assign a project manager to serve as your principal point of contact for this overtime analysis. All project team members, including the partner in charge,will be available to the City of Elgin and the Overtime Analysis Committee for consultation throughout the project. We will also work closely with the city's project manager to assist the project team in coordinating logistical arrangements and serving as a contact point for questions and concerns related to the review. We believe that our project team of senior level consultants and subcontractors,with hands-on management and administrative experience in local law enforcement and fire prevention,is uniquely qualified to serve as your independent advisor. Collectively,our project team has the necessary mix of analytical and organizational skills to provide you with a quality analysis with recommendations that,when implemented,will enhance operations. Given the depth and breadth of experience we bring to this project,we appreciate the opportunity to respond to your request for proposals. We look forward to presenting our proposed project approach and qualifications to you and other city officials. This proposal represents a valid offer for 90 days from the proposal opening date. If you have any questions or need additional information,please contact me at 608.240.2329. We look forward to working with the city on this important project,the results of which will help you balance your commitment to quality services and your dedication to delivering them in the most efficient manner. Sincerely, VIRCHOW,KRAUSE&COMPANY,LLP t‘i ciuSciA Michael Ley,CMC,Partner State and Local Government,Public Sector Consulting Group ML/jas Part I. Introduction: Firm Qualifications and Experience A. ABOUT VIRCHOW, KRAUSE& COMPANY, LLP At Virchow,Krause&Company,LLP,our goal is to help clients succeed both today and in the future. As a full service accounting and consulting firm,we have a long history of commitment to our clients and strive to ensure your complete satisfaction. Our staff responds to your needs by carefully listening and evaluating your particular situation. We go beyond the services of a traditional CPA firm to find innovative solutions and offer useful suggestions to strengthen your organization. Truly,our mission is to serve as your most valued advisor. Virchow Krause is one of the Midwest's largest and oldest certified public accounting firms,originating in 1931. The staff today includes 123 partners and approximately 907 total staff located throughout our 12 Midwest offices. The 2003 Public Accounting Report ranked us as the 13th largest certified public accounting firm in the United States. In 2001,they also rated us as the fastest growing accounting firm in the United States. We have established ourselves as a comprehensive service provider by not only being proficient in our core competencies of accounting,auditing,and tax,but also with our consulting services. Our mission is to serve as our clients'Most Valued Advisor. We strive to achieve this by providing value-added advice and guidance throughout many aspects of your organization. Our goal is to establish an enduring relationship with you that you will count on for years to come. As a full service accounting and consulting firm,we have a long history of commitment to our clients and strive to ensure your complete satisfaction Within our Public Sector Group,Virchow Krause has taken a unique approach to providing public sector services. We are specialized into teams serving municipalities,school districts,utilities,colleges,and other areas. Why do we do this? Because the specialization allows us to more deeply understand the unique issues affecting various areas of the public sector. This means our people bring more knowledge on issues directly affecting you and can help guide your future. Services provided to our public sector clients include staffing studies,budget analysis,operational analysis,human resources consulting,information systems analysis,utility consulting,and accounting and auditing among others. In all engagements,our clients are welcome to consult with all levels of staff, including the partner in charge. Our devotion to the public sector is illustrated by our commitment to inform and instruct our clients about important public sector issues. Annually,we speak at accounting,financial,and management seminars and workshops. In addition, we author two newsletters,Municipal Lines and Utility Lines,which provide clients timely information on relevant topics. VirchowThe Public Sector Group,with staff from our Madison office,will conduct this jproject. &company Your Most Valued Advisor virchowkrause.com 1 Part I: Introduction: Firm Qualifications and Experience B. WHY VIRCHOW KRAUSE IS UNIQUE We are much more than an audit and accounting firm. Consulting has become a major part of the work we do for state and local government clients in the mid- west during the past 12 years. With seasoned,professional consultants in our Chicago,Wisconsin,Minnesota,and Michigan offices,we have the capability to assist our clients in addressing and resolving the difficult and complex problems they face in providing services to the public. The key to the success of a study such as that sought by the City of Elgin is the quality of personnel assigned to the project team. As you can see from the resumes contained later in this proposal,the staff assigned to this review have extensive experience conducting reviews similar in scope to that desired by the village. Through this experience,we have developed a proven approach that will allow us to perform a highly efficient study with recommendations that are responsive to your needs and that,when implemented,will position the city to proactively address overtime issues. The specialized focus of the proposed project team means that the individuals assigned have the expertise necessary to perform a quality study that anticipates pertinent issues within law enforcement and fire service staffing and management. The staff assigned to this project have extensive experience in performing staffing reviews,organizational structure,and benchmarking analysis as well as expertise in labor negotiations. Demonstrating our commitment to providing service responsive to your needs, we are fortunate to have enlisted the services of Stanley Klein and David Berousek. Mr.Klein served as a senior law enforcement executive and manager for sixteen years in the capacity of Chief Deputy for three elected sheriffs with the Dane County Sheriffs Office. As a deputy sheriff,he served in the capacity of jailor,dispatcher,investigator,evidence technician,and was active in numerous law enforcement organisations. Since his retirement,Mr.Klein has served as a senior level consultant on numerous law enforcement related projects in Illinois,Wisconsin,and Minnesota. In his role as sub-consultant and project advisor,he will leverage their substantial knowledge of law enforcement staffing and organization to maximize the benefits to the city. Mr.Berousek has extensive fire service command experience in Illinois and Wisconsin. A graduate of Southern Illinois University with a degree in fire service administration,he currently serves as Chief of the North Shore Fire Department. Mr.Berousek will also serve as a sub-consultant and project advisor on fire service matters. At Virchow Krause,our specialized municipal experience includes service to more than 175 municipalities. This experience includes numerous operations and organizational studies,as well as municipal audit and accounting services. Because of this experience,we have extensive knowledge of public sector issues PI as they relate to a multitude of service areas. In addition,members of our consulting staff have extensive experience as senior managers and elected officials at the local level;we understand the political environment of local V IrCI IVW KAugovernment and change management in the public sector. &company Your Most Valued Advisor >. virchowkrause.com 2 Part I. Introduction: Firm Qualifications and Experience We have an extensive public sector consulting practice,headed by a partner who has conducted over 150 reviews for municipalities and public sector clients in nine states(Illinois is one of them),including 25 law enforcement and public sector agencies. Over the past 15 years,Virchow Krause has built this practice through a demonstrated commitment to providing the highest quality management consulting services to our public sector clients. Because of our commitment,mid-west communities are increasingly turning to us to meet their management consulting needs. As individuals with direct public sector experience,we understand the complexities and challenges unique to the public sector. While all members of the proposed project team have direct law enforcement and fire/EMS management-consulting experience the inclusion of David Berousek and Stanley Klein will ensure that our perspective is enhanced by direct law enforcement and fire service executive and management experience at the local level. C. INDEPENDENCE • The project team members assigned to this review are an important part of the firm's public sector consulting group,one that is a key part of the firm but is also separate and distinct from the audit and accounting practice. This consulting group specializes in organizational and operational reviews and provides a fresh perspective to municipal government decision-makers and executives. D. UNDERSTANDING OF PROJECT The City of Elgin seeks professional assistance to review and calculate the expenses of its police and fire department overtime compensation paid. The review is to include an analysis of the funds budgeted for the departments and the actual costs incurred by the city. Specific categories of overtime expense are to be established based on the functions/activities/causes generating the overtime. Some overtime for police officers and firefighters working for public safety agencies is inevitable and necessary. There is no way to predict or schedule for staffing of homicide investigations and major fires,for example. However as actual costs for overtime increasingly and consistently exceed the amounts budgeted,municipal executives and governing bodies often find themselves challenged and frustrated with overtime issues and how to minimize the costs of premium-rate overtime while providing public safety services the public expects. Accordingly they are looking for different and creative ways to make changes in current practices. We have assisted other municipalities and counties to address and resolve these issues. In addition,the city has required a survey of ten surrounding,peer communities as an integral part of the review. It wishes to know the annual budget for each of the peer communities'Fire and Police Departments,what is causing the overtime,and what alternatives to overtime are effective. VirchowI jause &comFany Your Most Valued Advisor vi rchowkrause.com 3 Part I: Introduction: Firm Qualifications and Experience In the end the city wants to know what activities of police officers and firefighters are generating overtime costs,and whether the identified activities are a valid and effective use of personnel time. It also wants an analysis of the existing policies and procedures of the two departments and what changes should be made to reduce overtime costs. Furthermore,based on the peer city survey and analysis,it seeks practical,feasible recommendations about how to curtail the expense accrued by overtime costs. Finally,the city seeks suggested innovations or best management practices that will also reduce overtime costs. V it ChO Kraue &comPany Your Most Valued Advisor virchowkrause.com 4 Part 2: Scope of Services A. PROJECT APPROACH We will examine the Police and Fire Departments' overtime expenses with a focus on the causes,the current policies and procedures in place governing the build-up in the number of overtime hours,whether controls are effectively managed by supervisors, and whether there is an effort to maximize overtime to meet minimum staffing requirements or labor contract provisions. In addition, we will provide you with recommendations that balance the needs for providing effective law enforcement and fire services with controlling costs. Our review will focus on the major Department programs that usually incur the greatest number of overtime hours and consume the greatest dollar amount of overtime budget appropriations(e.g.,patrol,firefighting,detective services, training,sick leave,vacancies,etc.). More specifically,we will: 1. First compare each department's(including a breakout by division) overtime ratios with national best practices benchmarks to determine the depth and extent of each department's issues. We will use the 8%- 10%standard(if we find that the number of overtime hours worked expressed as a percentage of regular hours worked is beyond 10%, there is a significant problem crying out for reform;if the ratio is below 8%,the problem is more manageable;if the ratio falls within the benchmark range,that is normal,but there may be a need for additional or more effective controls). 2. Compare the two departments'overtime ratio with ten(10)Illinois peer communities specified in the RFP. The analysis will include the identification of major factors unique to each community affecting overtime rates. 3. Identify new methods or alternatives available that will help the city replace or eliminate overtime usage that is cost effective and maintains better control of overtime hours and costs. The main issue to be examined is a)whether controls/policies are in place,b)if yes,are they being regularly adhered to by all officers and supervisors,and c)if no, where is tighter administration needed or what new,effective controls need to be adopted and enforced. 4. Identify departmental practices and review pertinent FLSA,labor contract language, State Statutes,and other legislation(Family Leave Act,etc.)that may have a significant effect on the use and cost of department overtime. 5. Identify and analyze the causes for overtime and ways to remedy or limit exceeding budgeted amounts. 6. Review the number of staff assigned to the major functions/divisions and determined how they are staffed. We will want to learn whether u C OV �u minimum staffing requirements,turnover,type of leave taken,and company work schedules are influencing overtime and, if so,to what extent. Your Most Valued Advisor virchowkrause.com 5 Part 2: Scope of Services 7. Develop a comparison of overtime versus straight-time personnel costs. 8. Review and analyze overtime resulting from extending hours versus call in events,such as homicide investigations and major fires,for example. 9. Interview Police and Fire Department management regarding departmental operations and procedures. 10. Observe operations of selected program areas. B. WORK PLAN TASKS—PROJECT METHODOLOGY We will conduct the following work plan tasks in carrying out the assignment. Our work plan is characterized by frequent interaction with client staff and management and an in depth analysis that will spotlight where the problems are and what alternative solutions will achieve the city's objectives of reducing or stabilizing the number of overtime hours and their cost. Task 1: Obtain detailed data from the appropriate city source(s)that will enable us to conduct our review including: ✓ Number of overtime hours worked and leave hours taken by individual police officers and firefighters in each of the two departments for the years 2001,2002,2003,and 2004(through September 30),rolled up into division subtotals,and reasons for overtime by category ✓ Number of regular hours worked by the police officers and firefighters for the years 2001,2002,2003 and 2004(through September 30) ✓ Police and Fire Department and Human Resources Department policies,procedures,and controls governing the working of overtime hours by department personnel ✓ Minimum staffing requirements for each of the two departments ✓ Regular salary expenses incurred for the years 2001,2002,2003, and 2004(through September 30) ✓ Regular salary expenses budgeted for the years 2001,2002,2003, and 2004(through September 30) ✓ Overtime expenses incurred for the years 2001,2002,2003,and 2004(through September 30) ✓ Overtime dollars budgeted for the years 2001,2002,2003,and 2004(through September 30) ✓ Sworn officers and firefighters collective bargaining agreements ✓ Police and Fire Department written annual reports(2001-2003) ✓ Police and Fire Department organization charts ✓ Complete Police and Fire Department personnel rosters and designation of supervisors responsible for approving overtime -_. V Police and Fire Department personnel seniority lists ✓ Police and Fire Department actual revenues and expenditures /: ►. (2001,2002,2003 and 2004 through September 30) ✓ Overtime expenses offset by revenues(e.g.,for special events that VlrchOWI; Part 2: Scope of Services ✓ Work schedules for sworn officers and firefighters ✓ Description/listing of posts and patrol beats by shift for both departments ✓ Turnover data for sworn officers and firefighters,for 2001,2002, 2003,and 2004(through September 30)by program area Task 2: Conduct interviews and observe selected Department program operations. Using the data obtained and analyzed during and following Task 1,we will interview the following individuals: ✓ Police and fire chiefs ✓ Assistant/deputy fire and police chiefs ✓ Division commanders ✓ Selected sample of 8 officers,4 from each department(1 meeting each per department to be held in a focus group setting of representative staff) ✓ City Manager ✓ Budget Director ✓ City labor relations officer ✓ City Human Resources/Personnel Director ✓ Chair of City Council Finance Committee Task 3: Obtain data from ten(10)peer communities(or as many as will agree to provide information)to derive their Police and Fire Department overtime ratios and compare them to City of Elgin ratios and national benchmarks. Virchow Krause will develop the survey questionnaire template for review and approval by the Overtime Analysis Committee. Once the questionnaire template has been approved,the City of Elgin will designate a staff member to administer the survey with oversight provided by the Virchow Krause project manager. Survey administration tasks to be performed by the City of Elgin include: ✓ Developing the list of peer communities to be surveyed and obtaining necessary contact information ✓ Contacting peer communities to request cooperation in responding to the survey ✓ Sending the survey questionnaire to the cooperating peer communities ✓ Collecting survey responses and entering data into an Excel spreadsheet or other agreed upon database ✓ Performing follow-up with the responding peer communities to clarify or obtain additional information VirchowK rause &Cony Your Most Valued Advisor virchowkrause.com 7 Part 2: Scope of Services Task 4: Compile and present an issues list to the city project manager. We will submit an issues list that summarizes our initial fmdings from our work during Tasks 1,2,and 3,that lists the work to be completed, and lists the alternative solutions to be analyzed in further depth. This step is suggested to keep you informed of our progress and status of the project and to begin to discuss our preliminary recommendations from a management and fiscal perspective. It will serve as a reality check mechanism that ensures there are no surprises later in the project. Task 5: Prepare draft report and obtain city comments regarding suggested revisions. The draft report will contain necessary background information;findings from our interviews,observations,and analysis of the data;alternative solutions to problems identified;advantages and disadvantages of the alternatives;and our recommendations for reducing or stabilizing the cost of Police and Fire Department overtime. We will attend one meeting for the purpose of discussing the draft report and obtaining suggested revisions and editorial changes. Task 6: Prepare and submit the final report. We will prepare 10 copies of the final bound report and one camera ready original PDF file copy for the city to make additional copies if needed. Task 7: Present the fmal report. We will attend not-to-exceed three meetings of the City Council to discuss the report,and will attend meetings of the City's Overtime Analysis Committee during the project's duration. C. PROJECT DELIVERABLES AND ON-SITE PRESENTATIONS Throughout the course of our analysis,and included in the proposed project fee, Virchow Krause will provide the city with the following: • Project Deliverables: - Written and oral status updates as necessary throughout the course of the study. - Preliminary issues list to be reviewed by the Overtime Analysis Committee(OAC). - A written draft report to be reviewed by the Overtime Analysis Committee and other key city officials as appropriate. - A written final report. This document and any presentation materials will also be provided to the city in an Adobe Acrobat file (PDF)for reproduction. -- • On-Site Presentations: - Three meetings with the city council to present and/or discuss the final report. Vrchow use - Status Update Meetings with OAC. {� &comIany Your Most Valued Advisor virchowkrause.com 8 Part 2: Scope of Services D. EXPECTATIONS OF THE CITY During the study,Virchow Krause will rely on the city to perform the following: • Appoint a Project Liaison to coordinate scheduling,data collection,and other logistical arrangements. • Provide space for interviews with police and fire department staff and other city officials. • Make staff available for fact-finding interviews. These meetings will normally last up to one hour,and will be scheduled so they do not affect delivery of service or create overtime. • Provide timely responses to requests for information and review of project deliverables. • Appoint a staff member to administer the peer community survey. • VivthoWIiause &c ►w Your Most Valued Advisor virchowkrause.com 9 Part 2: Scope of Services E. PROJECT TIMELINE The project team will continually monitor the work plan and project deadlines to ensure the timely and effective completion of this study by the city's specified date of July 1,2005. In addition,the city's assignment of a project liaison will greatly facilitate efficient communications and requests for information between our project team and the police and fire departments. We agree to all of the milestones in the city's timetable as specified in the RFP. The following table shows a tentative project timeline based on these assumptions. We will discuss specific dates and confirm the schedule upon being awarded the contract for performing services. Project Commencement 12/15/2004 12/15/2004 Od _ Prepare S Deliver Document I .Reqs 12/17/2004 12/17/2004 1d Project Kickoff Meeting with 0 Overtlme Analysis Committee(OAC) 1/52005 1/52005 1d ▪ Cd Rev • MaReview Requested • terials 1/5/2005 1/13/2005 7d _ • On-site Interviews/Observations and 1/17/2005 2/25/2005 30d Follow-up Dwelop Survey rovalQu.stlonnalre I 1202 /24 005 12005 3d Obtain C Survey Peer Communities S Analyze 1/25/2005 225/2006 24d 111111111111111111 t-Results ire-.!Analysis of Issues 2/28/2005 3!4/2005 5d 1111 9 Deliverable 01:Preliminary issues 3/9/2005 3/9/2005 Od • Presentation to OAC '4O Prepare Draft Report 3/10/2005 3/25/2005 126 - ▪ Deliverable 02:Draft Report Presentation to OAC 3/30/2005 3/30/2005 Od • 12 Prepare Final Report 3/31/2005 4/15/2005 12d Deliverable entation 83:to FinalOAC Report 4/202005 4/20/2005 Od • Deliverable e4:Presentations to City - - - - - DeliverableCouncil(3 maximum) 4/27/2005 7/1/2005 48d This proposed timeline is an estimate based on our experience with similar projects. If it is necessary to modify this timeline due to factors we may not be currently aware of,we are willing to discuss this with the city and make changes that best meet its needs. Clearly,our ability to meet this or any other mutually agreed upon timeline is dependent upon the availability of appropriate city officials and personnel and on our ability to access relevant information. During this project,we will make the city's project liaison aware of any issues that affect our ability to meet the completion date for the project. We will work with the city to resolve any of these issues in a timely manner. VirchowKraLse &convany Your Most Valued Advisor virchowkrause.com 10 Part 3: Exceptions — Alternatives to Scope of Services For clarification,we wish to comment on our interpretation of the RFP's requirement for a survey of surrounding communities and what we propose to do to meet your objectives. Using a written survey and follow up interviews, we will obtain available information from as many of the ten communities'police and fire departments as possible,subject to data being readily available and each of the communities' willingness to share it with us and the City of Elgin. We will not go into the depth and detail for the survey communities as we will for the City of Elgin regarding internal operational and management practices and collective bargaining contract provisions leading to the use of police and fire overtime.However,to the extent we find best practices and innovations that Elgin should adopt,we will describe them in our reports. We take no other exceptions to the specifications contained in the RFP. VirChOWKrause &company Your Most Valued Advisor > virchowkrause.com 11 EXHIBIT 2 HOURLY RATES OF CONSULTANT' S PERSONNEL - 10 - PROFESSIONAL FEES Professional fees for the scope of services outlined in the proposal submitted by Virchow Krause are based on the hourly rates of staff that will be assigned to this project. The following hourly rates will be used for billing purposes: Hourly Rate Staff Level Partner $200 Manager $190 Senior Consultant $165 Project Advisors $75 • 0OFf< ` G. City of Elgin Agenda Item No. no 4'4 TED Fk% October 8, 2004 L G TO: Mayor and Members of the City Council N FROM: David M. Dorgan, City Manager 1;,41,�43 Sean R. Stegall, Assistant City Manager SAFE COMMUNITY RuthAnne K. Hall, Management Analyst SUBJECT: Analysis of City Costs for Providing Overtime Compensation for Police and Fire Services PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to award a contract for professional services to Virchow, Krause & Company, LLP to complete an analysis of City costs for providing overtime compensation for police and fire services. RECOMMENDATION It is recommended that the City Council award a contract for professional services to Virchow, Krause & Company, LLP in the amount not to exceed $30,000 to complete an analysis of City costs for providing overtime compensation for police and fire services. BACKGROUND A RFP requesting an analysis of City costs for providing overtime compensation for police and fire services was drafted and released/advertised on July 28, 2004. The purpose of the analysis is to determine the specifics of how the overtime costs are generated from both the Police and Fire Departments and to determine, whether or not, the services generating the overtime costs are an effective use of personnel time and, whether or not, the costs associated could be reduced through proposed changes to existing policies and practices. The consultant will work with the City staff, including representatives from the Police and Fire Departments, to collect the relevant data and present a final report that shall separately address activities which are presently, or potentially, generating the overtime costs for both the Police and Fire Departments. The report shall analyze these activities and make a determination as to whether these activities are a valid and effective use of personnel time. This report shall also analyze the existing policies of both departments and make an assessment as to whether or not costs associated with overtime could be reduced through policy changes. Included in this section shall be a comparative analysis of the administrative policies of the surrounding communities surveyed. Finally,the report shall address the results of the survey and provide viable recommendations to curtail the expense accrued by overtime costs. • Analysis of City Costs for Providing Overtime Compensation for Police and Fire Services rib' October 8, 2004 Page 2 Four responses were received on August 23, 2004 and were evaluated by members of the City Manager's Office, Finance, Purchasing, Police and Fire Departments. It was the consensus of the reviewers that Virchow Krause and Company (VK) should be retained to provide the services. This firm is large and diverse with smaller specialized teams in place to service municipalities and the public sector. The proposal submitted by the firm included a commitment from its law enforcement specialist subcontractor, Stanley Klein, and fire services specialist subcontractor, David Berousek. Mr. Kelin and Mr. Berosek both have extensive professional experience in law enforcement and fire service executive and management experience at the local government level. Together with Vichow, Krause & Company they bring a wealth of knowledge to the project and staff is confident that they would be the most qualified team to meet the requirements of the project. In their proposal, VK originally proposed an amount of $39,000 to complete the work. After negotiations with staff VK has indicated that they will complete the project within the approved $30,000 budget and without any changes to the project scope. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED Nofte. r v,„_____ FINANCIAL IMPACT Sufficient funds are budgeted ($30,000) and are available ($30,000) in the Riverboat Fund, account number 275-0000-791.30-99 (project number 039582) in order to enter into the agreement with Vichow, Krause & Company. f LEGAL IMPACT \:\j1\ 1\/ An agreement will need to be prepared. ALTERNATIVES 1. Award the contract to Virchow, Krause & Company, LLP as recommended. 2. Award the contract to another vendor. Respectfully submitted for Council consideration. rkh r