04-244 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