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NOTICE OF PUBLIC MEETING PHOENIX CITY COUNCIL

FINANCE, EFFICIENCY, INNOVATION AND SUSTAINABILITY SUBCOMMITTEE Pursuant to A.R.S. Section 38-431.02, notice is hereby given to the members of the PHOENIX CITY COUNCIL FINANCE, EFFICIENCY, INNOVATION AND SUSTAINABILITY SUBCOMMITTEE and to the general public, that the FINANCE, EFFICIENCY, INNOVATION AND SUSTAINABILITY SUBCOMMITTEE will hold a meeting open to the public on Wednesday, September 19, 2012 at 10:00 a.m located at Phoenix City Hall, 1st Floor Atrium, Assembly Rooms A, B, and C, 200 West Washington Street, Phoenix, Arizona. The agenda for the meeting is as follows:

1. Call to Order Chairman Gates

2. Approval of Minutes of the June 20, 2012 Meeting

Page 4 Subcommittee members

3. Innovation and Efficiency Task Force Update – Bloomberg Innovation Grant Proposal This report provides an update to the Finance, Efficiency, Innovation and Sustainability Subcommittee on the status of the City of Phoenix Bloomberg Innovation Grant proposal. The City Council approved the request to submit the “Smartest Energy City in the World” proposal at its September 5, 2012 formal meeting. This report is for information only. No Council action is required. This item is for Information Only.

1 0 Minutes Mario Paniagua

4. Rightsourcing Update This report provides information to the Finance, Efficiency, Innovation and Sustainability Subcommittee on a Parks and Recreation Department rightsourcing initiative, and seeks the Subcommittee’s approval to implement the initiative. Additionally, this report provides an updated schedule of future rightsourcing initiatives for Subcommittee discussion and possible action. This item is for Discussion and Possible Action

Page 23 10 Minutes John Chan

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5. City Manager’s Performance Dashboard Project Update This report provides an update to the Finance, Efficiency, Innovation and Sustainability Subcommittee on the development of the City Manager’s Performance Dashboard. Staff seeks approval from the Finance, Efficiency, Innovation and Sustainability Subcommittee to implement a web-enabled, City Manager’s Performance Dashboard at no additional cost to the City. This item is for Discussion and Possible Action.

9 10 Minutes David Cavazos

6. Local Banking Deposit Program Update This report provides updated information on the City’s new local bank deposit program, whereby the City will deposit up to $50 million in federally-insured instruments of local banks. To date, nearly $6 million has been deposited in 24 local banks, yielding greater returns for the City and providing capital that can be loaned through the local banks. This report also requests authorization to accept bids from participating banks to place the remaining $44 million in a manner that meets State law and the City’s investment policy requirements. This item is for Discussion and Possible Action.

Page 35 10 Minutes Jeff DeWitt

7. Accounts Payable to Accounts Receivable Matching This report summarizes the efforts by City Auditor and Finance Department staff to maximize collection of vendor’s delinquent accounts with the City. This item is for Information and Discussion.

Page 41 5 Minutes Bill Green

8. New Way/Same Day – New to Blue Update This report provides an update to the Finance, Efficiency, Innovation, & Sustainability Subcommittee regarding summer 2012 efforts for New Way, Same Day also known as Same Day Collection Service of trash and recycling. This is for Information and Discussion.

Page 43 10 Minutes John Trujillo

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9. Employee Suggestion Program Update This report provides an update to the Finance, Efficiency, Innovation, and Sustainability Subcommittee on the City’s Employee Suggestion Program (ESP). This item was last heard at the October 19, 2010, Finance, Efficiency and Innovation Subcommittee. This report is for information only. This item is for Information and Discussion.

Page 45 10 Minutes Janet Smith

10. Marketing Partnership Program Update This report provides information to the Finance, Efficiency, Innovation & Sustainability Subcommittee on progress from the Marketing Partnership Program. This item is for Information and Discussion.

Page 47 5 Minutes Toni Maccarone

11. Call to the Public Chairman Gates

12. Future Agenda Items Chairman Gates

13. Adjournment Chairman Gates

For further information, please call Dennis Murphy, Management Assistant, City Manager’s Office at 602-495-5467. Persons paid to lobby on behalf of persons or organizations other than themselves shall register with the City Clerk prior to lobbying or within five business days thereafter, and must register annually to continue lobbying. If you have any questions about registration or whether or not you must register, please contact the City Clerk’s Office at 602-262-6811. For reasonable accommodations, call Dennis Murphy at Voice/602-495-5467 or TTY/602-534-5500 as early as possible to coordinate needed arrangements.

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CITY OF PHOENIX CITY COUNCIL FINANCE, EFFICIENCY, INNOVATION AND SUSTAINABILITY SUBCOMMITTEE

SUMMARY MINUTES June 20, 2012

Subcommittee Room Phoenix City Hall 200 West Washington Street Phoenix, AZ 85003 Council Members Present Councilman Bill Gates, Chair Councilman Michael Nowakowski Vice Mayor Michael Johnson Councilman Tom Simplot City Staff Present David Cavazos Felipe Moreno Haley Lowrence Spencer Self Evelyn Castillo Kara Kalkbrenner Mario Paniagua Christine Smith Jessica Amend Jerome Miller John Trujillo Dennis Murphy Debra Stark Bob Kahn Carolyn Bristo Rick Naimark Penny Parrella Cassandra Tice Aaron Mertz Public Present Bob Goodwill Sally Lara Thelma Ross Mike Holt Jake Hinman Brunn Roysden Shelly Hayes Gwen Andrew 1. Call to Order

Chairman Bill Gates called the meeting to order at 10:08 a.m. with Councilman Tom Simplot, Councilman Michael Nowakowski and Vice Mayor Michael Johnson in attendance. 2. Approval of Minutes of the May 16, 2012 Meeting

Councilman Simplot made a motion to approve the May 16, 2012 meeting minutes. Councilman Nowakowski seconded the motion, which was approved unanimously.

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3. Innovation and Efficiency Task Force

This item was for information only.

4. Rightsourcing Initiative Update Chairman Gates requested an update on a pilot program for outsourcing janitorial services. He noted the large number of rightsourcing items set to be reported on at the October meeting. City Manager David Cavazos explained city departments would be undergoing annual reviews throughout the summer, and updates from the reviews were expected to be ready in October.

5. Charitable Dropbox Regulations

Planning and Development Director Debra Stark discussed a variety of issues related to charitable dropboxes. Ms. Stark noted concerns voiced by residents about dropbox appearance and placement. She stated dropboxes are currently regulated through the city’s blight ordinance, but that some cities issue permits for dropboxes. She requested subcommittee direction on the issue. Councilman Nowakowski noted dropboxes can become overfilled during certain times of the year and they often do not have contact information on them to be picked up. He expressed support for the registration of dropboxes, including a small fee. He asked how dropboxes could be removed from a property. Ms. Stark explained each box could display a permit, including contact information or authorization from the property owner. She also stated the registration could be done on an annual basis if desired. Chairman Gates noted this issue had come up during neighborhood revitalization efforts. He asked whether dropboxes could be limited to use by non-profit organizations only. Ms. Stark stated dropbox use could not be limited to non-profit organizations only, but that any use required the authorization of the property owner. Councilman Simplot asked whether a new regulation would allow the city to authorize all dropboxes. Ms. Stark indicated she was unsure about retroactive authorization of dropboxes but stated staff would look into it. Chairman Gates indicated the issue was worth researching further, noting industry support for it.

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Deputy City Manager Jerome Miller asked about enforcement requirements. Ms. Stark stated staff was working with the Neighborhood Services department on this. Councilman Simplot explained the need for giving property owners a way to ensure enforcement. Chairman Gates indicated staff should move forward with a text amendment. He then opened the floor for public comment. Mr. Bob Goodwill expressed concern about potential city regulation of dropboxes. Mr. Michael Holt also expressed concern about city regulation of dropboxes. He noted the state already has legislation in place. He also discussed the difficulty of non-profit versus for-profit designations on dropboxes, noting his organization, American Textile Recycling Services, is a for-profit organization that manages dropboxes on behalf of non-profit organizations. He indicated the regulations created by the towns of Gilbert and Goodyear were not overly restrictive, and he expressed support for non-restrictive regulations in Phoenix as well. Chairman Gates suggested Mr. Holt work with Ms. Stark and staff on the issue. Ms. Stark affirmed staff’s desire to make a user-friendly process and noted the support of the International Council of Shopping Centers. Chairman Gates noted the speaker cards of Ms. Thelma Ross and Ms. Sally Lara, both in opposition but not wishing to speak.

6. Fire Department Ambulance Service Billing

Fire Chief Bob Kahn provided a brief history of ambulance service and billing practices. He stated the city began providing ambulance service in 1986 and had always used a contractor for billing services until 2006. Deputy Fire Chief Kara Kalkbrenner explained that since billing was in-sourced in 2006, collection rates have increased from 60-65% to over 80%. Ms. Kalkbrenner noted this represented an additional $12 million in revenue to the city, funding for 125 firefighters. Councilman Simplot asked whether the city bills insurance companies directly. Ms. Kalkbrenner explained the city bills the insurance companies directly, although residents still may receive a bill if they have a co-pay. Chairman Gates asked about the use of new technology to improve the process.

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Chief Kahn discussed the use of iPads to expedite the process, as well as testing to determine how to better integrate with Arizona Department of Health Services technology. Chairman Gates asked about any prospects for outsourcing. Chief Kahn indicated staff was looking at several options, with their main focus remaining on maximizing collection rates. 7. Efficient Parking Enforcement Vehicles

Assistant Public Works Director Carolyn Bristo provided a PowerPoint presentation on parking enforcement vehicles. She explained several vehicles were in need of replacement and staff had researched several alternatives, ultimately deciding on Smart Cars. She noted that while the cars do still run on gasoline, they are 40% cheaper than the previous type of vehicle used for enforcement. Councilman Simplot asked about the difference between a Smart Car, a golf cart, and the previous enforcement vehicles, the GO-4. Public Works staff member Don Brown explained the GO-4 vehicle was gas powered and heavier duty than a golf cart. He also noted golf carts do not meet the safety needs required for enforcement vehicles. Deputy City Manager Rick Naimark added the Smart Cars feature electric windows, which provide additional security for enforcement staff, as well as air conditioning. He stated the bid award would be on the July 3 Formal Agenda. 8. Solid Waste Program Study Acting Public Works Director John Trujillo explained staff would like to hire a consultant to conduct a study of the solid waste program. Mr. Trujillo indicated the study would look at potential budgetary efficiencies, operations and organization structure, evaluation of the program’s CIP process, strategies for a 40% diversion rate, and maximizing revenue while maintaining an equitable fee structure. Councilman Nowakowski noted homeowners’ associations do not allow bulk trash pickup. He wondered if a discount could be given to such customers. Mr. Trujillo stated staff would look into the issue. He also noted other benefits of the study, including continued efforts to not increase fees. Councilman Simplot asked about the city’s diversion rate for multi-family housing. Mr. Naimark stated the city does not collect commercial solid waste. He also noted the impact of collecting vegetation on diversion rates.

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Councilman Simplot asked whether the study should look at non-customers as well. Mr. Trujillo stated the study could do this. Chairman Gates asked whether the study would look at green waste issues. Mr. Trujillo indicated it would and stated staff felt there were opportunities for better diversion practices in this area. Chairman Gates asked about potential cost savings from the study. Mr. Cavazos explained that historically the studies had paid for themselves due to increased efficiencies. Mr. Trujillo added that savings increase as landfill use decreases. Mr. Cavazos emphasized the lack of rate increases for solid waste services and the continued focus on innovation and efficiency. 9. Recycling and Waste Reduction at City Owned Facilities Mr. Trujillo provided an overview of recycling and waste reduction at city owned facilities. He noted that 73% of the 214 city owned facilities have a recycling/diversion program. He stated the diversion rate was 15%. He also discussed challenges regarding recycling and diversion. He listed staff recommendations, including all city facilities with diversion programs by 2015, a 40% diversion rate by 2020, and improved reporting to diversion procedures are adequately documented. Chairman Gates expressed disappointment with the state of recycling at city facilities. He suggested moving up the 2015 date for all city facilities to have a recycling program. He affirmed the city should lead by example in the area of recycling. Mr. Naimark stated the 2015 goal may be able to be moved up. 10. Plastic Bag Recycling Program Update Mr. Trujillo discussed the five-year anniversary of Bag Central Station, the city’s plastic bag recycling program. He explained the program, its scope, and its growth and successes. He noted the importance of the public/private partnership with the Arizona Food Marketing Alliance (AFMA), as well as the program’s recognition by several organizations as an award-winning model for plastic bag recycling. Councilman Simplot noted that in Washington, D.C., a fee is charged to use plastic bags.

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AFMA representative Trisha Hart stated that an unintended consequence of bans on plastic bags can be an increase in the purchase of plastic bags. She said the goal of the program is to reduce plastic bag use. AFMA President Tim McCabe discussed the strong demand for plastic bag recycling, based on the increasing uses for recycled plastic bags. Councilman Simplot asked whether, from an environmental standpoint, it was better to recycle or reuse plastic bags. Ms. Hart stated the program was comprehensive, focusing on reducing, reusing, and recycling plastic bags. Councilman Nowakowski asked whether there was a way to include plastic bags in residents’ regular recycling bins. Public Works staff member Terrence Gellenbeck explained sorting systems at city recycling facilities were harmed by plastic bags. Councilman Nowakowski stated increased convenience for residents would be helpful. Mr. Trujillo stated staff would look at alternative recycling methods. Councilman Nowakowski suggested the possibility of leaving bag recycling containers in parking lots, similar to dropboxes. Chairman Gates expressed support for the voluntary nature of the program. 11. Call to the Public None. 12. Future Agenda Items Councilman Nowakowski requested a review of city technology and possibilities for increased efficiencies in this area. 12. Adjournment Chairman Gates adjourned the meeting at 11:22 a.m.

Respectfully Submitted, Aaron Mertz Budget and Research Department

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Finance, Efficiency, Innovation and Sustainability, September 19, 2012, Agenda Item 3

CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: Mario Paniagua

Budget and Research Director

SUBJECT: INNOVATION AND EFFICIENCY TASK FORCE UPDATE – BLOOMBERG INNOVATION GRANT PROPOSAL

This report provides an update to the Finance, Efficiency, Innovation and Sustainability Subcommittee on the status of the City of Phoenix Bloomberg Innovation Grant proposal. The City Council approved the request to submit the “Smartest Energy City in the World” proposal at its September 5, 2012 formal meeting. This report is for information only. No Council action is required. THE ISSUE The Bloomberg Philanthropies Organization is offering five grants, a $5 million grand prize and four awards of $1 million each, to the five U.S. cities who submit the boldest “innovative local solutions to national problems”. The funding is to jumpstart implementation of the initiatives. The deadline to submit a proposal is September 14, 2012. Bloomberg Philanthropies challenged all U.S. cities with at least 30,000 residents for the best ideas that tackle one or more of the following areas:

• address a major social or economic issue, • improve customer service for citizens or businesses, • increase efficiency, and/or • enhance accountability, transparency and public engagement.

Bloomberg reported that 394 eligible cities, including Phoenix, responded to the challenge. According to Bloomberg Philanthropies, the grant selection committee will consist of judges who are funders, as well as experts in innovation and public problem solving. The panel will be co-chaired by Shona Brown, VP and head of Google.org and Ron Daniel, Bloomberg Philanthropies board member and Former Managing Partner at McKinsey & Company. Based on the selection process timeline, all applications will be judged by the end of third quarter 2012. The top 20 finalists will be announced and finalist cities will be invited to send their teams to “Bloomberg Ideas Camp” for two days on November 12th and 13th in New York City. The Bloomberg Foundation will cover

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the cost for 3 representatives from each city to attend. During the second quarter of 2013, the 5 winners will be announced.

In response, City of Phoenix departments and functions were asked to submit an innovative proposal for consideration as the City's best idea to help improve the community. The Innovation & Efficiency Task Force formed a subcommittee to review and evaluate the proposals and ideas. See Attachment 1 for the list of Subcommittee members. Attachment 2 provides a list of the ideas submitted by City departments, individual employees, and by members of the Task Force subcommittee. Some departments submitted more than one proposal while other departments and functions teamed up to submit joint proposals. The subcommittee reviewed and evaluated each proposal using the Bloomberg grant application criteria listed below:

• Bold, visionary thinking that ignites innovation and inspires

• A thoughtful implementation plan that will ensure excellence in execution

• Feasibility of replication in other cities

• A strong argument for why this idea will achieve measurable impact and improve lives

Each city may submit only one idea. After much debate and discussion, the subcommittee determined to combine several of the proposals into the “The World’s Smartest Energy City”. The subcommittee was impressed with all of the ideas submitted for consideration and recommended that the City evaluate the potential to also implement the other proposals. OTHER INFORMATION An application outlining “The World’s Smartest Energy City” proposal will be submitted to the Bloomberg organization on September 14, 2012. The proposal is described as transforming Phoenix into the World's Smartest Energy City by creating citizen-driven "smart energy districts" that improve neighborhoods, reduce the urban heat island, increase energy efficiency and turn waste into energy. Each renewable energy district is represented by the city’s Village Planning Committees. The committees will select from a menu of services for each area based on energy audits and assessments as well as the unique priorities and local needs of the district. The City would work with local businesses, nonprofit organizations and community members to implement the proposal. The City of Phoenix is very appreciative for all of the time and efforts of our volunteer citizens, as well as city staff that have participated. This process has resulted in several great ideas proposed, all of which will be evaluated for future implementation.

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RECOMMENDATION This report is for information only.

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Attachment A

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Subcommittee Members

• Toni Maccarone, Public Information Director, Chair

• Don Hamill, Community member

• Roger Peck, Community member

• Richard Rea, Community member

• Marty Shultz, Community member

• David Tierney, Community member

• Steve Kreis, Assistant Fire Chief

• Penny Parrella, City Council Office Chief of Staff

• Ron Ramirez, City of Phoenix Coalition of Unions

• Colin Tetreault, Mayor’s Office

• John Trujillo, Acting Public Works Director

• Assistance also provided by Kathya Hidalgo, City Grant Coordinator

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Attachment B

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Innovation Ideas Submitted

1. Cooperative Volunteer Program for Unemployed Workers

2. Interactive, web-based Budget and Finance System for Residents

3. Improving the Voting Center Experience

4. Center for Excellence for Global Entrepreneurship

5. Engaging the Public through Technology

6. Enhancing the Automatic Aid System

7. Community Wellness Initiative

8. Homelessness in Downtown Phoenix

9. City of Phoenix Aging in Place Network

10. “Read On Phoenix”

11. Self-service Kiosks

12. Real-Time Graffiti Vandal & Illegal Dumping Apprehension Program

13. Warrant/Self Surrender Program

14. Regional Bike Share Program

15. Assisting Low-income Residents with Repairs

16. Improving Customer Service

17. Employee Wellness Program

18. Seedspot Expansion along Light Rail

19. Reuse vacant "Big Boxes" for Community Good

20. Valley wide Reduce, Reuse, and Recycle Program

21. Using Technology to Conduct Meetings

22. Streamlining Street Transportation Work

23. Smartest Energy City

24. Turning Vacant Lots into Useful Pieces of Land

25. Probationers doing Volunteer Work

26. Creating Valley wide Volunteer Database

27. Innovation & Efficiency Task Force

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CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: John M. Chan

Community and Economic Development Director

SUBJECT: RIGHSTOURCING UPDATE

This report provides information to the Finance, Efficiency, Innovation and Sustainability Subcommittee on a Parks and Recreation Department rightsourcing initiative, and seeks the Subcommittee’s approval to implement the initiative. Additionally, this report provides an updated schedule of future rightsourcing initiatives for Subcommittee discussion and possible action. THE ISSUE In Fiscal Year 2011-12, city departments outsourced approximately $477 million in services in more than 340 service areas. Over the past six years, the City of Phoenix has seen a significant increase in the amount of new services outsourced to the private sector. From FY 2005-06 to FY 2011-12, the level of services outsourced expanded by $133 million or 38.6 percent Recently implemented rightsourcing initiatives have included the in-sourcing of Risk Management litigation services, and the outsourcing of various Public Works fleet services and video engineering services at PHX11. Significant rightsourcing projects approaching final implementation include the outsourcing of monthly Municipal Services bills by the Water Services Department, and the outsourcing of the Senior Meal Program by the Human Services Department. Janitorial Maintenance- In January, the Parks and Recreation Department implemented a pilot program to contract janitorial maintenance of three community centers (Paradise Valley, Mountain View and Sunnyslope). This initiative included the elimination of six full-time Groundskeeper positions and resulted in a net annual savings of $110,000. For FY 2012-13, the Parks and Recreation Department is proposing to contract janitorial maintenance of three additional centers (Devonshire, Pecos and Longview). Implementation of this contracted option will eliminate five full-time positions and generate an additional $80,000 in savings, for a total savings of $190,000.

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Rightsourcing Initiatives under Evaluation- The Rightsourcing Working Group of the Innovation and Efficiency Task Force is currently evaluating an additional 15 rightsourcing initiatives. Attachment A outlines the 15 initiatives, and includes a schedule for reporting outcomes and possible recommendations to the Subcommittee. RECOMMENDATION This report requests the Finance, Efficiency, Innovation and Sustainability Subcommittee approve the Parks and Recreation Department proposal to outsource janitorial maintenance of three additional community centers and the proposed schedule of rightsourcing initiatives.

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Attachment A

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Attachment A

Schedule of Rightsourcing Items for FEIS Subcommittee

Item Department Subcommittee Date

1. Short-term Meetings/Events Booking Convention Center October

2. Security Services Library October

3. Commodity/Supplies Distribution Fire October

4. Weed/Pest Control Parks October

5. Mowing Parks October

6. Property Management Housing November

7. Right-size Facility Maintenance Services Convention Center November

8. General Park Maintenance Parks November

9. Maryvale Baseball Facility Operations Parks November

10. Street Landscaping Parks/Streets December

11. Aviation Landscape Maintenance Aviation/Parks December

12. Bulk Trash Collection Public Works TBD - Pending consultant

study on solid waste

services

13. Street Cleaning Street Transportation TBD - Pending Report on

comparable cities

14. Lake Pleasant Water Treatment Plant Water Services TBD - review of current

contracted services to be

completed by July 2012.

15. Insourcing of Risk Management

Litigation Cases (Phase III)

Law TBD - Pending successful

implementation of Phase II

September 10, 2012

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CITY COUNCIL REPORT

TO: David Cavazos

City Manager

THRU: Mario Paniagua

Budget And Research Director, Innovation And Efficiency Task Force Chairperson

FROM: Ginger Spencer

Acting Arts And Culture Administrator

SUBJECT: CITY MANAGER'S PERFORMANCE DASHBOARD PROJECT UPDATE

This report provides an update to the Finance, Efficiency, Innovation and Sustainability Subcommittee on the development of the City Manager’s Performance Dashboard. Staff seeks approval from the Finance, Efficiency, Innovation and Sustainability Subcommittee to implement a web-enabled, City Manager’s Performance Dashboard at no additional cost to the City. THE ISSUE The Innovation and Efficiency Task Force and the Finance, Efficiency, Innovation and Sustainability Subcommittee directed City staff last year to pursue the development of the City Manager’s Performance Dashboard. A group of volunteer administrative managers and City staff from the City Auditor’s Office, Information and Technology Services and City Manager’s Office have worked to develop the performance dashboard at no additional cost to the City. The purpose of the dashboard is to provide visibility, accountability and transparency of government activities by facilitating immediate feedback of problems or successes. Working with City Management, an Executive Advisory Board and Department Directors, staff has identified 26 outcome-based, key performance indicators to include in the City Manager’s Performance Dashboard under the following focus areas: General Government, Environmental, Transportation, Community Enrichment, Economic Development, Public Safety and Criminal Justice. Attachment A provides a listing of the key performance indicators identified for each of the focus areas. The 26 key performance indicators help to measure the financial, public safety, economic development, quality of life, and environmental health of the City of Phoenix by providing data on a monthly basis through a web-enabled business solution. If approved, the City Manager’s Performance Dashboard will be piloted internally to the Mayor, Council and City Management on the intranet for a six to eight-month period and then be made available to the public on phoenix.gov starting July 1, 2013.

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RECOMMENDATION Staff seeks approval from the Finance, Efficiency, Innovation and Sustainability Subcommittee to implement the web-enabled, City Manager’s Performance Dashboard at no additional cost to the City.

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Attachment A

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Attachment A

City Manager’s Performance Dashboard Key Performance Indicators

Focus Area Key Performance Indicator

General Government General Fund Operating Expenditures General Fund City Sales Tax Total General Fund Revenue Innovation & Efficiency Savings Bond Ratings Number of Positions by Fiscal Year Full Time Employees per 1,000 Residents Customer Service Rating Environmental Annual Solar Energy Production Solid Waste Recycling & Diversion Transportation Weekday Bus Ridership Commercial Aircraft Passengers Street Maintenance Rapid Response Rate Community Enrichment Emergency Assistance Provided to Families in

Need Library Material Circulation Number of Visitors at Parks’ Recreation Facilities Public Art Projects Completed Economic Development Direct Spending of Conventions Jobs Created through Attraction, Retention &

Business Finance Initiatives Annual Estimate of Permits Issued Water System Number of Accounts Code Enforcement Case Cycle Time Public Housing Occupancy Rate Public Safety & Criminal Justice Paramedic Response Times Crime Statistics Municipal Court Case Load Clearance Rate

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CITY COUNCIL REPORT

TO: Ed Zuercher

Assistant City Manager

FROM: Jeff Dewitt

Finance Director

SUBJECT: LOCAL BANK DEPOSIT PROGRAM UPDATE

This report provides updated information on the City’s new local bank deposit program, whereby the City will deposit up to $50 million in federally-insured instruments of local banks. To date, nearly $6 million has been deposited in 24 local banks, yielding greater returns for the City and providing capital that can be loaned through the local banks. This report also requests authorization to accept bids from participating banks to place the remaining $44 million in a manner that meets State law and the City’s investment policy requirements. THE ISSUE In July 2012, in order to provide additional funds for consumer and small business loans in the local community and to increase the yield on City monies, while maintaining the primary objectives of safety and liquidity, the Finance Department began the process of investing up to $50 million in local banks through CD’s and other FDIC insured deposits. The Finance Department contacted all FDIC insured banks that have a physical presence within Maricopa County to determine their interest in providing CD’s and other FDIC insured interest-bearing deposit products to the City. OTHER INFORMATION The Finance Department is responsible for the investment of all City of Phoenix public monies within the guidelines of an internal investment policy and in compliance with State Statutes that provide for the prudent and efficient investment of the City’s money. The primary objective when investing City money is preservation of principal (safety) followed by ready access to cash when required (liquidity). Within these objectives, the Finance Department is continuously evaluating investment opportunities to maximize the return on City monies (yield). The City manages its own investment portfolio and typically does not maintain deposits in local banks. The City’s single service bank does not act as a depository bank in the traditional sense. Instead its primary function is to provide cash management services and infrastructure to assist the City with day to day cash management operations. The bank merely acts as a conduit to make payments and receive revenue. However, due

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to Federal Deposit Insurance Corporation (FDIC) insurance, the City can safely deposit up to $250,000 per bank. The Finance Department primarily invests in U.S. government and U.S. government-backed securities. As a result of the instability and uncertainty of current European financial markets, global investors have been fleeing European sovereign debt for the safety of U.S. Treasury securities, exerting downward interest rate pressure on U.S. securities. Thus, due to financial problems abroad coupled with economic weakness in the U.S., interest rates on U.S. government and U.S. government-backed securities are at historic lows, with 2-year U.S. Treasury Notes currently yielding only 0.20% – 0.30%. In light of these extremely low interest rates, other secured investments such as bank Certificates of Deposits (CD’s) have become an attractive investment option, with CD’s currently yielding up to five times as much as 2-year Treasury securities. As of September 4, 2012, the City has invested a total of $5,845,000 with 24 local banks. The City has invested in 2-year CD’s with an average yield of 0.77% and yields ranging from a high of 1.24% to a low of 0.28%. Due to the recent difficulty banks have experienced in lending their deposits to acceptable quality credits, several small banks have declined to accept City funds. With loan demand at low levels, small banks must conservatively invest excess deposits in safe securities and earning reasonable returns on U.S. Treasury and other government-backed securities has been a challenge. City deposits in bank CD’s have been limited to the FDIC maximum insured amount of $250,000 per bank and the Finance Department will continue to monitor the program to ensure that deposits in any one bank do not exceed FDIC maximum limits and are fully FDIC insured at all times. Attached is a list of the 24 banks that the City has deposited money into a CD and the yield of each CD. RECOMMENDATION Staff recommends approval to solicit bids from the 24 local banks that have accepted City deposits to place the remaining $44 million. The additional deposits must be fully backed or collateralized by U.S. Treasuries or the bank offers other consolidated investment products backed by the full faith and credit of the U.S. government as required by State law and the City’s investment policy. Funds will be allocated considering yield, term and stated intent to loan the deposits into the local community.

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Attachment A

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Local Bank Deposit Program Deposits as of September 4, 2012

Bank Rate

BBVACompass Bank 1.24%

Metro Phoenix Bank 1.15%

The Biltmore Bank 1.14%

RepublicBankAZ 1.09%

Western Alliance Bank 1.01%

Sunrise Bank of Arizona 1.00%

Bank 1440 1.00%

Pinnacle Bank 1.00%

First Scottsdale Bank 0.95%

MidFirst Bank 0.90%

Bank of Arizona 0.75%

Commerce Bank of Arizona 0.75%

Arizona Bank and Trust 0.70%

Meridian Bank 0.70%

Arizona Business Bank 0.65%

Mutual of Omaha 0.65%

Bankers Trust Company 0.60%

West Valley National Bank 0.55%

Arizona Federal Credit Union 0.50%

Enterprise Bank & Trust 0.50%

FirstBank 0.50%

M&I Bank 0.50%

UMB Bank Arizona 0.40%

National Bank of Arizona 0.28%

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CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: Bill Greene

Acting City Auditor

SUBJECT: ACCOUNTS PAYABLE TO ACCOUNTS RECEIVABLE MATCHING

This report summarizes the efforts by City Auditor and Finance Department staff to maximize collection of vendor’s delinquent accounts with the City. THE ISSUE Chapter XVIII, Section 14 of the Phoenix City Code states, “No demand on the City shall be allowed by the Manager in favor of any person in any manner indebted to the City without first deducting such indebtedness.” This means that the City should not pay vendors who have a delinquent account balance with the City. For example, the City should not pay an invoice for office supplies to a vendor that has delinquent false alarm fees or is overdue on their sales taxes. OTHER INFORMATION Because the City issues hundreds of warrants each day and has many different financial systems, there was not an easy way to determine if a vendor being paid owes the City in another area. Variations in business names and addresses made automated matches impossible and decentralized systems means that vendors doing business with the City are not assigned one central identifying number. In the past, the Finance Department’s Collections staff relied upon manual searches of pending check runs and delinquent receivable printouts, visually searching hundreds of rows each day to see if any warrants were going to vendors with overdue balances. We developed a new process, using ACL data analysis software and CODE1 address standardization software, that matches addresses on the pending check runs and delinquent account receivable reports from SAP and the tax receivable systems. During FY 11/12, reports showing matches were sent to collections staff daily to research the leads and hold warrants as necessary. Based on the reports we provided, Finance Department collections staff withheld over $240,000 that would have been paid to vendors, applying these funds to delinquent accounts due to the City. We will continue to perform this process in FY 12/13.

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RECOMMENDATION For information only.

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CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager

FROM: John Trujillo

Acting Public Works Director

SUBJECT: NEW WAY/SAME DAY - NEW TO BLUE UPDATE

This report provides an update to the Finance, Efficiency, Innovation, & Sustainability Subcommittee regarding summer 2012 efforts for New Way, Same Day also known as Same Day Collection Service of trash and recycling. THE ISSUE In 2012, in conjunction with the City Manager’s Office, the Public Works Department developed a more innovative and efficient collection process called Same Day Collection Service. This method provided collection of trash and recycling on the same day each week. To implement the Same Day Collection Service program for the City’s 390,000 solid waste customers, a citywide service review was conducted. Same Day Collection Service also provided an opportunity to reintroduce more than 11,000 residents to curbside recycling to increase diversion. This program was called New To Blue. BACKGROUND In preparation for the Same Day Collection Service program, the City used an extensive multi-level advertising campaign. This included mass media of television, radio, billboards and print ads, as well as internet social media. Finally, a postcard was mailed directly to all 390,000 customers two weeks prior to the change. To demonstrate the effectiveness of the campaign, a quarterly Public Works Customer Survey showed that 83 percent of residents were aware of the pending changes the week prior to implementation. Logistically, solid waste personnel rerouted the entire city, which covers 520 square miles and serves 390,000 solid waste customers. During the review, approximately 8,000 customers were identified and notified that they could not participate in Same Day Collection Service due to unique collection issues such as narrow lots, cul-de-sacs, and narrow private streets. Therefore, these customers will remain on twice per week collection for trash and recycling. Due to routing changes, any customer that had nine days between refuse collections was notified via the postal service to place their containers out for collection. This

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seamless customer service resulted in a one-time refuse collection for 40,000 customers on Saturday, July 7, 2012, just prior to the start of Same Day Collection Service on Monday, July 9, 2012. To increase recycling, starting in March 2012, solid waste personnel began a door-to-door educational effort and delivered blue recycling containers to (non-variance) residents in north Phoenix and neighborhoods scattered across the city that had not been part of the recycling program. This “New To Blue” program delivered a total of 11,200 containers in time for the Same Day Collection Service implementation. Staff will continue to roll out this program to other residents who are not yet participating in recycling. STATUS Same Day Collection Service began the week of July 9, 2012. This collection method has several advantages for customers and the City. Residents now set both containers out for collection only one day a week, resulting in improved neighborhood aesthetics and convenience. Routing collections using a five-day schedule found efficiencies that eliminated 12 daily collection vehicles and drivers - saving an estimated $1.3 million annually, or $6.5 million over five years. The promotional campaign resulted in approximately 6,000 customer phone calls and 700 emails, which represents a 20 percent increase over the “normal” weekly customer contacts. A new and innovative website created specifically for Same Day Collection Service received a total of 35,000 hits. To ease the transition, Public Works Solid Waste staff provided extra collections for residences who may have forgotten about the change. Reducing 12 trucks and operators and reducing routing areas to just over a 100 square miles per day instead of 250 square miles has increased productivity by 20 percent. Making the routes more compact and eliminating a third load per day which was typically half full, has resulted in collection from 390,000 customers, using less staff and equipment. Public Works Solid Waste is encouraged by the preliminary results of the Same Day Collection Service implementation. Based on Call Center feedback, our customers have enthusiastically accepted the collection change. Staff will continue to monitor and audit the results of the Same Day Collection Service to ensure success and determine the effect on our resident recycling effort. RECOMMENDATION This item is for information only.

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CITY COUNCIL REPORT

TO: David Cavazos

City Manager

FROM: Janet Smith

Human Resources Director

SUBJECT: EMPLOYEE SUGGESTION PROGRAM UPDATE

This report provides an update to the Finance, Efficiency, Innovation, and Sustainability Subcommittee on the City’s Employee Suggestion Program (ESP). This item was last heard at the October 19, 2010, Finance, Efficiency and Innovation Subcommittee. This report is for information only. BACKGROUND The Employee Suggestion Program (ESP) was created in the early 1970’s and was designed to give employees an opportunity to be recognized for submitting innovative and creative suggestions that promote cost savings or measurable improvements in productivity, efficiency, customer service, safety and employee morale. Adopted suggestions are submitted to a citywide committee for review and possible cash or non-cash awards. Awarded suggestions are featured on the City’s ESP website and in the City Connection employee newsletter, and selected suggestions are recognized at monthly City Council meetings. THE ISSUE In December of 2010, upon the recommendation of the Finance, Efficiency and Innovation Subcommittee, the City Council enacted enhancements to the ESP, increasing the cash awards to a maximum of $16,667 for implemented suggestions and creating a budget credit for departments that implement the awarded suggestions. These program enhancements and a renewed marketing focus resulted in a marked increase in the number of suggestions received during the following months. The ESP continues to be quite successful. Since 2003, the program has saved the City over $15.3 million. Examples of awarded suggestions include:

• An idea submitted by seven Water Services Department employees to reconfigure a series of reservoirs to improve water quality and meet regulatory requirements saved the City nearly $4 million dollars in construction costs;

• An Operations Superintendent in the Aviation Department submitted a suggestion to paint all airport terminal, light rail and shuttle buses the same color, therefore reducing the number of spare buses needed by 60%. This suggestion

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requires fewer buses to be maintained, and gives the Aviation Department the flexibility to schedule any of the buses on various routes during seasonal and peak demand periods. This idea was implemented at Sky Harbor International Airport resulting in over $2.4 million in savings;

• An employee in the Street Transportation Department suggested the use of Carbon Fiber Reinforced Polymer (cFRP) material to strengthen a bridge to meet load capacity standards. Proposals for a full replacement of this bridge were already in progress, which would have cost over $3.6 million dollars. Traffic restrictions to the community would have existed for up to twelve months. With approvals from regulatory agencies and the surrounding community, the employee’s idea was successfully implemented in six weeks and resulted in over $2.4 million dollars in immediate savings.

OTHER INFORMATION The City utilizes an extensive marketing program for the ESP. Currently, City employees receive recognition of awarded suggestions at the department level, from the City Manager’s Office, at City Council meetings and in feature articles of the City Connection. The City will continue to market the program and encourage participation through department presentations, in recognition videos and with social media. This report is for information only.

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CITY COUNCIL REPORT

TO: Jerome E. Miller Deputy City Manager

FROM: Toni Maccarone Public Information Director

SUBJECT: MARKETING PARTNERSHIP PROGRAM UPDATE

This report provides information to the Finance, Efficiency, Innovation & Sustainability Subcommittee on progress from the Marketing Partnership Program. THE ISSUE The City Council approved the citywide Strategic Marketing Plan on January 5, 2010. Goals of the Marketing Partnership Program are to generate revenue for the City and develop mutually beneficial business partnerships. On June 22, 2011, City Council approved a commission-only contract with The Superlative Group to valuate various City assets, and then to identify and negotiate marketing and naming rights partnerships with the purpose of increasing City revenues. Areas that have been studied include the Phoenix Convention Center, Parks and Recreation Youth Sports Programs and a few other City programs. OTHER INFORMATION To date, the Marketing Partnership Program has generated $124,114 and saved residents more than $5.6 million, through the City’s Prescription Drug Discount Card Program. Additionally, the contractor for the Service Line Protection Program approved by City Council in February 2012 will present the City with a check for $216,000 when the program is launched in September 2012, plus ongoing 12 percent of gross revenue from the program. The Marketing Partnership Program forecasts $500,000 in total revenue from partnerships for FY 2012-13. The Superlative Group is now moving into the stage of meeting with potential business partners to assess their interest in City opportunities. Companies targeted are in established business sectors, with strong presence in the Phoenix market. A timetable for a major partnership could be 12 to 18 months from the beginning of discussions to a final agreement. Any proposals will be presented to City Council for discussion and consideration. RECOMMENDATION This report is for information only.

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