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Home My Public Portal About20181206 - Agenda Packet - Board of Directors (BOD) - 18-41 SPECIAL MEETING BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Lucie Stern Community Center - Fireside Room 1305 Middlefield Rd. #1 Palo Alto, CA 94301 Thursday, December 6, 2018 9:00 AM A G E N D A 9:00 SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT ORAL COMMUNICATIONS The Board President will invite public comment on items not on the agenda. Each speaker will ordinarily be limited to three minutes; however, the Brown Act (Open Meeting Law) does not allow action by the Board of Directors on items not on the agenda. If you wish to address the Board, please complete a speaker card and give it to the District Clerk. Individuals are limited to one appearance during this section. ADOPTION OF AGENDA BOARD BUSINESS The President will invite public comment on agenda items at the time each item is considered by the Board of Directors. Each speaker will ordinarily be limited to three minutes. Alternately, you may comment to the Board by a written communication, which the Board appreciates. 1. Annual Board of Director’s Retreat – Strategic Planning Meeting 1 (Environmental Scan, FOSM 5-Year Staffing Projections, and Strategic Plan Goals and Objectives Review) (R-18- 147) Staff Contact: Ana Ruiz, General Manager General Manager’s Recommendations: 1. Review the Financial and Operational Sustainability Model (FOSM): implementation of recommendations to-date and re-forecasted staffing projections for the next five years (Fiscal Years 2019-20 through 2023-24). 2. Review the annual Environmental Scan Report. 3. Review, update if needed, and adopt the Fiscal Year 2019-20 Strategic Plan Goals and Objectives to meet emerging opportunities and challenges, and guide the development of the Fiscal Year 2019-20 Budget and 3-year Capital Improvement and Action Plan. Meeting 18-41 2. Formation of a Science Advisory Panel (R-18-148) Staff Contact: Kirk Lenington, Natural Resources Manager General Manager’s Recommendation: Review and provide direction on the proposed formation of a Science Advisory Panel as described in the staff report. ADJOURNMENT In compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting, please contact the District Clerk at (650) 691-1200. Notification 48 hours prior to the meeting will enable the District to make reasonable arrangements to ensure accessibility to this meeting. Written materials relating to an item on this Agenda that are considered to be a public record and are distributed to Board members less than 72 hours prior to the meeting, will be available for public inspection at the District’s Administrative Office located at 330 Distel Circle, Los Altos, California 94022. CERTIFICATION OF POSTING OF AGENDA I, Jennifer Woodworth, District Clerk for the Midpeninsula Regional Open Space District (MROSD), declare that the foregoing agenda for the special meeting of the MROSD Board of Directors was posted and available for review on November 30, 2018, at the Administrative Offices of MROSD, 330 Distel Circle, Los Altos California, 94022. The agenda and any additional written materials are also available on the District’s web site at http://www.openspace.org. Jennifer Woodworth, MMC District Clerk/Assistant to the General Manager R-18-147 Meeting 18-41 December 6, 2018 AGENDA ITEM 1 AGENDA ITEM Annual Board of Director’s Retreat – Strategic Planning Meeting 1 (Environmental Scan, FOSM 5-Year Staffing Projections, and Strategic Plan Goals and Objectives Review) GENERAL MANAGER’S RECOMMENDATIONS 1.Review the Financial and Operational Sustainability Model (FOSM): implementation of recommendations to-date and re-forecasted staffing projections for the next five years (Fiscal Years 2019-20 through 2023-24). 2. Review the annual Environmental Scan Report. 3.Review, update if needed, and adopt the Fiscal Year 2019-20 Strategic Plan Goals and Objectives to meet emerging opportunities and challenges, and guide the development of the Fiscal Year 2019-20 Budget and 3-year Capital Improvement and Action Plan. SUMMARY Each year, the Board of Directors (Board) holds two retreats to kick-off the annual budget process. For the Fiscal Year (FY) 2019-20 budget development cycle, these retreats are scheduled on Thursday, December 6, 2018 and Thursday, February 28, 2019. On December 6, 2018, the Board will review and discuss the following items: •Status update of the 60 recommendations from the Financial and Operational Sustainability Model (FOSM), including re-forecasted staffing projects for the next five years (Attachment 1); •The Environmental Scan Report, which is prepared annually to inform any updates to the Strategic Plan Goals and Objectives (Attachment 2); •Formation of a Science Advisory Panel (discussed in a separate Agenda Report, see Agenda Item 2) that would provide expert, science-based input on specific projects and policy development; and •Progress to date on fulfilling the FY2018-19 Strategic Plan Goals and Objectives, and any language revisions to finalize and adopt the new FY2019-20 Strategic Plan Goals and Objectives (Attachments 3 and 4). This annual Board Retreat Meeting 1 (Strategic Planning) provides the Board with an early opportunity to set the District’s overall course for the coming year at a broad policy level. It also provides the framework for Board Retreat Meeting 2 (Priority Setting) scheduled on February 28, 2019. At this future meeting, the Board will discuss and confirm District-wide priorities for R-18-147 Page 2 the next fiscal year to guide the Budget and Action Plan development ahead of detailed budget presentations to the Action Plan and Budget Committee (ABC), which begin in early May 2019. DISCUSSION Financial and Operational Sustainability Model (FOSM) Review In 2015, the Board accepted the comprehensive FOSM study (R -15-82) as a high-level framework for guiding the future organizational structure and growth of the Midpeninsula Regional Open Space District (District). This study was implemented at a critical time in the District’s history, following completion of the Vision Plan and the successful passage by the voters of Measure AA to fund priority Vision Plan capital projects. Status of FOSM Recommendations The FOSM lists sixty (60) recommendations (Attachment 1) to support a District-wide organizational shift from one of acquisition to one of long-term operational sustainability. To date, 78% (47) of the recommendations are complete, including the following major organizational restructuring components: •Alignment of finance and administrative services within a single business line under the leadership of a CFO/Director of Administrative Services; •Centralization of information systems and technology under one manager that reports to the CFO; •Formation of an Engineering and Construction department that together with Planning and Real Property reports to a single Assistant General Manager; •Splitting of the Operations department into two departments; •Alignment of the new Visitor Services and Land and Facilities departments with the Natural Resources department under a single Assistant General Manager; and •Moving Public Affairs into the General Manager’s office. An additional 20% of the recommendations (12) are well underway, with only 2% (1) yet to start. Attachment 1 includes a summary of the FOSM recommendations with status updates organized by business line. Staffing Projections The FOSM also includes staffing projections to support the District’s organizational shift. Two distinct time periods, each with specific staffing projections, are identified (see Table 1). A total of 51 new positions are identified between 2015 and 2020 (first five years), and up to an additional 53 positions are identified between 2020 and 2045 (next 25 years). R-18-147 Page 3 Table 1 Business Line Departments Projected Increase by 2020 Projected Increases 2020 to 2045 Total Projected Increased Project Planning and Delivery Eng’g and Construction, Planning, and Real Property 10 to 13 TBD 10 to 13+ Visitor and Field Services Natural Resources, Visitor Services, and Land and Facilities 20 to 25 37 to 45 57 to 70 Finance and Administrative Services Finance/Budget, Human Resources, and Info and Systems Tech 9 to 11 6 to 8 15 to 19 Office of the General Manager 2 0 2 Projected Staffing Increase (Range) 41 to 51 43 to 53 84 to 104 All 49 Board-approved positions added since FY2014-15 have been tracked and the grand total remains consistent with FOSM staffing projections, as shown in Table 2 below. Table 2 Staff reviewed the FOSM staffing projections for the next 25 years to identify the anticipated staffing allocations by business line for the upcoming five years (FY2019-20 through FY2023- 24). This review considered the factors and assumptions embedded in the FOSM and the anticipated growth in acreage, new facilities, and new publicly accessible lands over the next five years. The new 5-year staffing projection is shown in Table 3 and remains in-line with FOSM. Table 3 Business Line Remaining FOSM Projected Positions Through 2020 Five-Year Total (FY2019-20 through FY2023-24) FOSM Projected Growth between 2020 to 2045 Remaining FOSM Projected Positions Through 2045* Planning and Project Delivery 0 to 3 2 TBD / 4** 0 to 5** Visitor and Field Services -2 20 37 to 45 15 to 23 Finance and Administrative Services 1 to 2 4 6 to 8 4 to 6 General Manager’s Office -1 0 0 -1 Total 1 to 2 26 43 to 57 18 to 33 *Cumulative from acceptance of FOSM report in 2015 through 2045. **The FOSM identified Planning and Project Delivery growth as To Be Determined (TBD) from 2020-2045. Based on recent evaluations (including review of original FOSM assumptions, external trends, and increasing project complexity), staff expects limited growth of approximately 4 positions in this business line in the next 20 years; this number will be evaluated periodically. Business Line & Positions Added 2014/15 2015/16 2016/17 2017/18 2018/19 Positions approved to date through June 30, 2019 FOSM Projected Growth by 2020 Remaining FOSM Projected Positions Through 2020 Planning and Project Delivery 2 2 3 3 0 10 10 to 13 0 to 3 Visitor and Field Services 7 2 15 0 3 27 20 to 25 -2 Finance and Administrative Services 0 4 4 0 1 9 9 to 11 1 to 2 General Manager’s Office 1 1 1 0 0 3 2 -1 Total 10 9 23 3 4 49 41 to 51 1 to 2 R-18-147 Page 4 Per discussions with the Controller and his 30-Year Cash Flow Model, these projections are affordable in the long-term provided that the tax growth averages at least 4% per year during this same 5-year period. Any new position would be recommended to the Board for approval as part of the annual Budget and Action Plan development process. As part of each new position request, the Board would receive a description of the job duties, a rationale for the position and added capacity, a fiscal impact analysis, and a finding of the long-term affordability. The FOSM notes that “the greatest area of growth over time will be in Visitor and Field Services” to manage the increase in total acreage, acreage open to the public, trail miles, and increased visitation due to the delivery of Measure AA projects. Anticipated projects that would increase staffing demands in the next five years include the opening of Bear Creek Redwoods Preserve, opening the Purisima-to-the-Sea trail corridor, and potential key acquisitions totaling over 12,000 acres. It is important to note that actual staffing growth will depend on the timing and pace of these projects and new acquisitions. The FOSM recognizes that the staffing projection “is a reasonable best estimate given the many factors that may alter the trajectory of the District over 30 years.” Two growing areas of concern that have emerged as the District has ramped up its project delivery pace relate to increasing demands for preserve maintenance and resource management work, including restoration work to mitigate impacts from capital projects. In particular, to keep up with restoration/mitigation demands, the District currently outsources approximately $900,000 of work per year, and these costs are projected to increase. The General Manager will be tracking these costs and evaluating the cost-benefit of shifting the work to in-house crews or using other sources of labor. Strategic Plan Goals and Objectives: Opportunities and Challenges for FY2019-20 The Board adopted a comprehensive Strategic Plan in 2011 (R-11-96) to provide a high-level framework for guiding the District’s implementation of its mission. Each year, the Board reviews, makes edits as necessary, and adopts the Strategic Plan Goals and Objectives for the following fiscal year to provide high-level direction for the upcoming Budget and Action Plan. Environmental Scan Staff will present the results of an Environmental Scan Report (Attachment 2) and discuss the strengths, challenges and barriers, and opportunities facing the District as it looks forward to FY2019-20. The environmental scan includes significant internal and external conditions, data, and factors that may influence the efficiency and effectiveness of the organization’s operations, services, and project delivery. The annual environmental scan informs any Board revisions to, or affirmation of, the Strategic Plan Goals and Objectives for FY2019-20 (Attachments 3 and 4). Below is a summary of high-level themes and findings from the environmental scan: • The District remains focused on delivering Vision Plan and Measure AA projects. • Work is underway on 19 of 25 Measure AA Portfolios. • The District remains in a strong financial position with recently affirmed AAA Bond Ratings by Standard and Poor’s and Fitch Ratings Service. • Project complexity, and therefore costs, are increasing. • The continued booming economy and high demand for labor and materials are driving construction costs up. R-18-147 Page 5 •The continued increase in housing costs and difficult traffic conditions warrant creative solutions and new partnerships to mitigate local and regional impacts, reduce carbon emissions, and promote regional environmental sustainability. •Extreme weather patterns are the new normal. Enhanced and expanded resiliency practices, systems, and policies will allow the District to better prepare, respond, adapt, and rebound from climate change impacts and minimize disruptions to ongoing operations, services, and project delivery. •Continued monitoring of state and national policies, such as the new federal tax rules, is important to maintain the long-term financial sustainability of projects and programs. •Midterm elections and changes in state and local representation emphasize the need for relationship building with newly elected officials to communicate the District’s critical role in protecting water quality and supplies, reducing human impacts from wildfires and climate change, and advancing conservation goals to sustain our region’s life support system. •High visitation at newly opened public access locations and the anticipation of opening new public areas is increasing the pressure and demand on field personnel. •Recruitment and retention of employees continues to be a key focus for the organization; the record high job market may affect staff turnover and/or command new employee salaries at mid or top salary ranges. These factors coupled with the high cost of living and difficult commutes warrant ongoing staff retention strategies. •New leadership at all levels and new incoming staff present an opportunity to energize the organization and bring in new perspectives, ideas, and solutions. Strategic Plan Goals and Objectives Each year, the Board reviews and affirms, and if needed updates, the Strategic Plan Goals and Objectives to provide high-level direction for developing the upcoming fiscal year Budget and Action Plan. Based on the results of the 2018 environmental scan, several revisions are recommended for the FY2019-20 Strategic Plan Goals and Objectives as follows: •Delete Strategic Goal 1, Objective 1 – Review, and if needed refine, the District’s Vision Plan o Staff reviewed the Vision Plan with the Board on November 15, 2017 (R-17-124) and the Board made no refinements. Therefore, deletion of this objective is recommended for FY19-20. •Add a new objective under Goal 1: Work with fire agencies and surrounding communities to strengthen the preparation for and response to wildland fires. o This new objective responds to the increasing need for greater preparation of potential recurring catastrophic fires in California. •Add a new objective under Goal 3: Build state of readiness for potential disruptions by completing a risk assessment and creating a business continuity plan. o This new objective emphasizes the need for the District to be well prepared for withstanding and/or rebounding from major or local emergencies, thereby avoiding major disruptions to operations and service/project delivery. Attachment 3 presents the adopted FY2018-19 Strategic Plan Goals and Objectives. A redlined version for consideration is presented as Attachment 4. R-18-147 Page 6 FISCAL IMPACT Acceptance of the FOSM 5-Year Review and Environmental Scan Report, and adoption of the Fiscal Year 2019-20 Strategic Plan Goals and Objectives have no immediate fiscal impact. These actions will inform, together with Board confirmation of District priorities on February 28, 2019, the development of the FY2019-20 Budget and three-year CIAP for FY2019-20 through FY2021-22. Staffing projections included in this report are only preliminary. New positions would be recommended for Board approval as part of the annual Budget and Action Plan development process after reconfirming the long-term affordability according to the Controller’s 30-year Cash Flow Model. BOARD COMMITTEE REVIEW This item was brought directly to the full Board given full Board interest and importance. PUBLIC NOTICE Public notice was provided as required by the Brown Act. CEQA COMPLIANCE This item is not subject to the California Environmental Quality Act. NEXT STEPS On February 28, 2019, the Board will confirm the District-wide priorities for the upcoming fiscal year. The outcomes of the December 6, 2018 and February 28, 2019 Board retreat meetings will guide the development of the Fiscal Year 2019-20 Budget and Action Plan, including the 3-Year CIAP. Attachments: 1.FOSM 5-Year Review (FY2019-20 through FY2023-24) 2. Environmental Scan Report for FY2019-20 3. Adopted FY2018-19 Strategic Plan Goals and Objectives 4. Draft Updated FY2019-20 Strategic Plan Goals and Objectives Responsible Department Head: Ana Ruiz, General Manager Prepared by: Carmen Narayanan, Budget & Analysis Manager Stefan Jaskulak, Chief Financial Officer Brian Malone, Assistant General Manager Ana Ruiz, General Manager FOSM 5-Year Review Board Retreat #1 | December 6, 2018 1 of 5 TOTALS 47 Complete 12 Underway 1 Not Started 60 Total Line Status Number Recommendation Complete 1 Develop mechanisms that periodically clarify and reinforce organizational priorities for staff, so that work can be planned and managed in alignment with those priorities. Complete 2 Develop a communication strategy to regularly provide information updates to the Board and public regarding project progress and results, and promote transparency to build public trust. Complete 3 Convene internal stakeholders to develop a refined, comprehensive project delivery approach that ensures proper oversight, clarity of roles, prioritization, predictability, and follow through. Underway 4 Integrate specialized functions, such as CEQA review, that play a critical role in project delivery and integrate them into the District's project delivery approach and identify procedural changes and methods of centralization that lead to greater consistency and efficiencies Complete 5 Complete a comprehensive requirements analysis and establish a plan to procure and implement a uniform Project Management System. Complete 6 Develop a consistent format for project budgets using a procured project management system that informs work planning and accounts for the total cost of project delivery, including staff time and indirect costs associated with administrative support functions and organizational overhead. Complete 7 Expand the list of pre approved, on-call consultants and contractors that can be available to support the District in its planning, engineering, construction, and project delivery functions. Complete 8 Review current contracting/bidding policies/practices to identify opportunities to streamline these policies/practices. Complete 9 Create an Engineering and Construction Department and hire an Engineering and Construction Manager to oversee the following project delivery functions: design, permitting and engineering; construction management; and Measure AA project delivery oversight. Underway 10 Meet with local jurisdictions to discuss opportunities to improve the permit processing time associated with certain types of permits. Underway 11 Create a Property Acquisitions Plan that clearly communicates District acquisition policies and goals that provides a road map for strategic land acquisition. Complete 12 Restructure the Real Property function to focus on land and property acquisition, and move the property management function to a Facilities division in the new Land and Field Services Department. Pr o j e c t P l a n n i n g a n d D e l i v e r y ATTACHMENT 1 FOSM 5-Year Review Board Retreat #1 | December 6, 2018 2 of 5 TOTALS 47 Complete 12 Underway 1 Not Started 60 Total Line Status Number Recommendation Complete 13 Establish a "visitor services" function of the organization to provide public facing services and activities. Restructure the organization to align docents, volunteers, and rangers to meet the array of visitor services. Complete 14 Separate the patrol and maintenance functions into two distinct organizational units, Visitor Services (for patrol staff) and Land and Facilities Services (for maintenance staff). Complete 15 Create Manager-level positions to lead the Visitor Services and Land and Facilities Services groups. Underway 16 Develop guiding policy similar to the East Bay Regional Park District Pipeline Program that requires District staff to develop estimates for start-up costs as well as ongoing maintenance, safety, and staffing costs for each development project or future land acquisition before the Board commits to the project or purchase. Complete 17 Purchase and implement a computerized maintenance management system (CMMS) and provide training on its use. Complete 18 Explore new reliable communication technology (i.e., email, voice and visual systems, tough books) to ensure field staff have the information and tools to effectively perform their job responsibilities. Complete 19 Establish a special projects/construction team that is dedicated to the delivery of special projects like trails construction. Not Started 20 Explore opportunities to partner with the private sector to provide existing staff with the capacity to address maintenance backlogs and deferred maintenance. Underway 21 Develop a field staff onboarding/ training program that outlines the variety of details and standards used for trails construction and maintenance work throughout the District. Complete 22 Maintain effective working relationships with local police and fire departments and as the District expands periodically evaluate automatic aid protocols and response. Complete 23 Develop a seasonal employment program for patrol work. Complete 24 Complete a Natural Resources Position Classification Study to ensure appropriate staffing types and levels are in place and recruited for in the future. (Underway) Complete 25 Expand grazing property management as a function of the new Land and Facilities Management department Complete 26 Create crews that focus on specific work functions and incorporate a rotational program that allows for continued professional growth and development of staff. Complete 27 Complete a facilities needs study to determine mid and long term field facility needs and investigate alternate maintenance facilities to accommodate future growth. Complete 28 Consolidate facility maintenance/property management into the Land and Facilities group. Underway 29 Create a facilities maintenance and improvement plan to guide work plans and inform financial decision making. Vi s i t o r a n d F i e l d S e r v i c e s FOSM 5-Year Review Board Retreat #1 | December 6, 2018 3 of 5 TOTALS 47 Complete 12 Underway 1 Not Started 60 Total Line Status Number Recommendation Complete 30 Document the business and technology requirements for an integrated budget and cost accounting system that enables the District to perform 1) general ledger and fund accounting; 2) project accounting; 3) grant billing and reconciliation; and 4)grant documentation and organization. Complete 31 Create a Chief Financial Officer (CFO)/Director of Administrative Services executive level position responsible for the realigned administrative services functions to provide financial and other administrative services expertise and leadership in these areas within the organization. Complete 32 Develop a transition plan to shift financial responsibility and management for the District, including managing the Controller's fiscal model, from the part time Controller to the new CFO/Director of Administrative Services. Complete 33 Maintain the New World Systems financial software at or near the current release and continue to leverage the system to its full potential. Complete 34 Review, update, or develop financial management policies and procedures to enable appropriate, accountable, and fiscally sound decisions at the lowest possible level within the organization. Complete 35 Centralize the purchasing function within the Finance and Administrative Services Department. Complete 36 Develop and implement a Technology Strategic Plan to provide a roadmap for the District's short and long term implementation and management of technology. Underway 37 Implement an IT governance structure that promotes effective planning, priority setting, and accountability of District technology resources (staff, funding, hardware and software) with business priorities. Complete 38 Augment the existing IT staff with an IT Division Manager and an additional IT Specialist. Complete 39 Integrate the GIS Services group into a new Information Systems and Technology department to better reflect its District wide service role and augment existing GIS staff with one GIS specialist position. Underway 40 Develop and implement a formal technology disaster recovery plan sufficient to address protection from an area (not site specific) disaster. Complete 41 Implement a desktop management (help desk) solution to manage requests for technology to track, monitor, and report on help desk activities. Complete 42 Create a Special Projects Manager position to provide project management support for internal support systems (i.e., IST implementation plan, records management system, purchasing process and procedures). Complete 43 Establish a Human Resource management level position responsible for planning and meeting critical recruitment issues and sustaining a committed workforce. Complete 44 Hire interim, temporary, or contract Human Resources staff to meet the need for recruitment of positions on the organization's critical FOSM implementation path. Complete 45 Develop reclassification policies and procedures to streamline classifications and effectively respond to organization staffing needs. Complete 46 Reassign facility management responsibilities to Operations and develop a resource allocation plan which includes existing staff and contract services to maintain District facilities. Underway 47 Complete a facility master plan to address the District office and operational needs for the next decade. Underway 48 Complete a comprehensive requirements analysis and establish a formal project plan to procure and implement a document management system. Fi n a n c e a n d A d m i n i s t r a t i v e S e r v i c e s FOSM 5-Year Review Board Retreat #1 | December 6, 2018 4 of 5 TOTALS 47 Complete 12 Underway 1 Not Started 60 Total Line Status Number Recommendation Complete 49 Assign the tactical implementation of special projects to skilled managers elsewhere in the organization. Complete 50 Establish a senior management analyst position that reports directly to the General Manager to monitor District project delivery, provide annual CIP project oversight. Complete 51 Increase the General Manager's spending authority. Complete 52 Locate the Public Affairs team within the General Manager's Office and establish expectations for the team to focus on both external and internal communication. Complete 53 Maintain existing staffing levels within the General Counsel's Office; as workload expands with Measure AA implementation and the growth of complex land risk management support over time. Underway 54 Assess the need for a centralized risk management function under the direction of a risk manager as the size and scale of District operations increases over time. Complete 55 Align the District's administrative services functions of finance, human resources, and information technology under a new Chief Financial Officer (CFO)/Director of Administrative Services. Complete 56 Ensure collaboration, effective communication, and project completion by having the managers of Real Property, Planning, and Capital Projects/Engineering report to the same Assistant General Manager. Complete 57 Align the field focused functions under the same Assistant General Manager to maintain open communication, shared resources, and a customer driven approach. Complete 58 Support effective Board and staff working relationships by defining clear roles and responsibilities and reviewing and updating policies and procedures that effect these interactions. Underway 59 Establish meeting management and delegation practices that ensure productive and meaningful results and utilize the expertise and skills of staff. Complete 60 Establish an internal and external communication strategy for FOSM Implementation.Of f i c e o f t h e G e n e r a l M a n a g e r FOSM 5-Year Review Board Retreat #1 | December 6, 2018 5 of 5 Business Line & Positions Added 2014/15 2015/16 2016/17 2017/18 2018/19 Positions approved to date through June 30, 2019 FOSM Projected Growth by 2020 Remaining FOSM Projected Positions Through 2020 Five-Year Total (FY2019-20 through FY2023- 24) FOSM Projected Growth between 2020 to 2045 Remaining FOSM Projected Positions Through 2045* Planning and Project Delivery 2 2 3 3 0 10 10 to 13 0 to 3 2 TBD / 4**0 to 5** Visitor and Field Services 7 2 15 0 3 27 20 to 25 -2 20 37 to 45 15 to 23 Finance and Administrative Services 0 4 4 0 1 9 9 to 11 1 to 2 4 6 to 8 4 to 6 General Manager’s Office 1 1 1 0 0 3 2 -1 0 0 -1 Total 10 9 23 3 4 49 41 to 51 1 to 2 26 43 to 57 18 to 33 *Cumulative from acceptance of FOSM report in 2015 through 2045. **The FOSM identified Planning and Project Delivery growth as To Be Determined from 2020-2045. Based on recent evaluations (including review of original FOSM assumptions, external trends, and increasing project complexity), staff expects limited growth of approximately 4 positions in this business line in the next 20 years; this number will be evaluated periodically. MROSD Board Retreat #1 December 6, 2018 FY2019-20 Environmental Scan Report Page 1 of 5 FY2019-20 Environmental Scan Report Introduction This report summarizes the annual Environmental Scan results, as the District looks forward, planning for FY2019-20. Each year, District managers take time to reflect on its external and internal environments by answering a set of ten questions. The goal of this exercise is to identify any new trends that the District should be aware of, respond in a timely fashion and ideally, get ahead of to avoid potential challenges. The Environmental Scan considers current and anticipated changes to the economy, political environment and local leadership, regulatory requirements, demographics, organization and workflow, and technology trends. The key findings are presented below to inform Board discussion as they consider whether revisions to the annual Strategic Plan Goals and Objectives are warranted. Economy A booming economy, which is a trend that is expected to continue in the near term, has resulted in increased competitiveness for construction in the Bay Area. Staff has noticed lower vendor availability and a higher cost of doing business. Fewer consultants and contractors are submitting proposals or bidding on projects and there have been several instances over the last year where there were no responders or only one respondent. If this continues and is exacerbated, the District can expect longer project timelines and higher project costs. Costs of services and supplies, including consulting services, will continue to increase. Land values in the Bay Area have continued to rise. This trend has been the primary driver for increased property tax revenue. The total General Fund ad valorem property tax revenue estimate for FY2018-19 is 7.2% above FY2017-18. Median home prices have risen by nearly 13% in the past year alone, as the region's robust job market and growing population have increased the demand for the limited housing stock. Correspondingly, property tax revenues are projected to have a healthy growth rate of 3.5% annually for the next three years based on the District Controller’s conservative 30-Year Cash Flow Model. While this trend is primarily positive for District funding, it will may lead to an increase in rural/open space land acquisition costs and will increase both employee housing and District office space rental rates. The current economy, including unemployment figures of under 3% for San Mateo and Santa Clara County, is supporting a competitive job market. The strong job market will likely affect ATTACHMENT 2 MROSD Board Retreat #1 December 6, 2018 FY2019-20 Environmental Scan Report Page 2 of 5 retention and recruitment in the coming year. This is discussed in further detail in the Internal Organization and Workflow section. Political Environment and Local Leadership Federal Recent tariffs have the potential to impact material costs for construction as well as general consumer goods. Reduced funding of federal agencies has the potential to impact both responsiveness to permitting requests and the ability of federal agencies, such as Golden Gate National Recreation Area, to work on cooperative projects. Permitting is one of the primary factors outside District control that affects project timelines. In addition, federal environmental protection laws have been curtailed and federal grant funding opportunities are limited. State The passage of Proposition 68 increases grant funding opportunities in the next four years. The District’s Grants Specialist is exploring potential grants with staff to ensure a good fit with priority projects at the District. However, Proposition 3 (previously known as the Water Supply and Water Quality Bond Act of 2018) failed to pass in the November 2018 election, which would have generated additional opportunities for grant funds. Governor-elect Gavin Newsom will change the state’s policy agenda and result in new state agency appointments. Local Staff has experienced an increase in requests for District staff time and funding support for regional partner projects. This trend is expected to continue into FY2019-20 and beyond. Regional trail project examples include: POST Bay-to-Sea Trail, San Mateo County Parks' Ohlone-Portola Heritage Trail, and SF Public Utilities Commission's Bay Area Ridge Trail South Skyline Extension. In addition, the District will likely experience a growing need to coordinate priorities with partner agencies. Allocation of District resources to support regional projects, partner projects, and co-agency projects needs to be determined. Following the November 2018 election cycle, local jurisdictions have newly elected officials in the area. The District will need to develop relationships with new state and local representatives and nurture existing relationships with incumbents. San Mateo and Santa Clara Counties have both hired new County Park Directors. Developing strong relationships with new local leadership is equally important. Regulatory Requirements Regulatory permitting issues are extending the District’s usual one (1) year of permitting to two (2) years due understaffed regulatory agencies. The District regularly faces a multitude of overlapping jurisdictional permitting processes at the local, county, state, and federal level that increase project costs and extend project delivery times. Legislation solutions are worth exploring to exempt the District from certain local and county permitting requirements in a MROSD Board Retreat #1 December 6, 2018 FY2019-20 Environmental Scan Report Page 3 of 5 manner similar to California State Department of Parks and Recreation. State and Federal permits would still be necessary. Occupational Safety and Health Administration (OSHA) regulations are evolving, requiring ongoing review and potential updating of District procedures, as well as ongoing training of staff. Regulatory and statutory changes highlight the need for well educated, trained, and specialized employees to carry out specific job duties and work assignments. These needs will continue to be reflected in recruitment activities. Ongoing tracking and awareness of groundwater issues and regulatory changes are important for the District to manage its water resources and supplies. Demographics The Bay Area has a very diverse population. Demographic trends include increases in the retired population, higher per capita income, more renters, highly educated people, and more foreign- born residents. Visiting open spaces on the weekend is becoming more popular. While visitation has increased, the Preserve Use Survey demonstrates that some communities are unaware of District preserves or have difficulty getting to them. Internal Organization and Workflow As the District increases public access to its preserves, two key factors to be aware of include a greater need for environmental mitigation, and increasing demands on field staff to manage and maintain District preserves. Mitigation costs for public access projects have increased substantially. The maintenance of mitigation/restoration projects can take multiple years. New mitigation/restoration projects are anticipated as public access improvements are implemented. Due to limited staff capacity, most of these tasks have been contracted out. Field staffing has grown significantly, however maintenance and patrol demands continue to rise due to high visitation, increasing acreage, increasing trail mileage, and new public access facilities. As additional preserves and trails are opened, the need for additional field staff will continue. There has been some loss of institutional knowledge and momentum due to staff turnover. Many factors have contributed to staff turnover: an increase in retirements, a highly competitive job market, growing commute times, and high cost of living/housing. Human Resources has noticed that recruitments pull many applicants, but typically, only a small number have relevant experience. MROSD Board Retreat #1 December 6, 2018 FY2019-20 Environmental Scan Report Page 4 of 5 Changing District Leadership The District has seen significant changes in leadership in the last year. Changes include Ana María Ruiz as the new General Manger, a new General Counsel, and Assistant General Counsel, two new Assistant General Managers, a new Visitor Services Manager, and two new Board members. These changes will have a lasting impact on the District. This new leadership team should provide stable leadership for the next five years and beyond. In the short term, changes in staff and Board members will effect momentum while everyone comes up to speed, and new leaders grow into their roles. At the same time, new leadership and new staff offer the opportunity of new ideas, solutions, and perspectives. Technology Trends Local agencies, like the District, are expected to deliver more services through technology, and increase the transparency and availability of data. Staff has placed significant effort, time, and attention on implementing and getting trained in using new technology, software and processes. These processes include OneDrive, SharePoint, Project Central, Capital Improvement and Action Plan (CIAP) process, and CityWorks maintenance management software. These all have the potential for increasing transparency, effectiveness and efficiency of the District. Given the amount of change that has occurred, the District should focus on successfully implementing items that are underway and cautiously limit initiating new IT items at this time. Work that has been completed over the last few years has laid a strong foundation for future technological success. A document retention policy is needed to assist departments with the retention, purging, and digitizing of documents before the administrative office is relocated. Topical Trends As staff looks forward into the next fiscal year, topics that should be considered as the Capital Improvement and Action Plan (CIAP) is developed include: − Changes to Public Access: o Recent public access development (Mount Umunhum, Bear Creek Redwoods) have increased the District’s profile and visibility to the general public. This creates higher expectations from the public at other preserves and pressure for more amenities (larger parking lots, benches, picnic tables). o Increased requests for electric bikes on trails. o Increased requests for drones at open space preserves. − Operating Impacts: o Most agricultural and grazing tenants follow lease terms yet more monitoring is needed to ensure effective rangeland and agricultural lands management. MROSD Board Retreat #1 December 6, 2018 FY2019-20 Environmental Scan Report Page 5 of 5 o Newly opened areas require much more active management and maintenance than closed areas, particularly in areas with high visitation like Mount Umunhum. − Regional Impacts: o Potential increases in government spending in public transportation may be of benefit to the District. − Financial Impacts: o Changes to government pensions and pension reform have had a positive impact on the District as the long term costs for PEPRA members are significantly less than classic members. The District should continue to monitor pension reforms. o The grants program has already helped bring in funding for several projects and will continue to pay dividends into the future. Long Ridge Open Space Preserve Strategic Plan Goals and Objectives for Fiscal Year 2018-19 Goal 1 – Promote, establish, and implement a regional environmental protection vision with partners Objective 1 – Review, and if needed reﬁ ne, the District’s Vision Plan Objective 2 – Build and strengthen diverse partnerships to implement a collaborative approach to environmental protection on the Peninsula, South Bay and San Mateo Coast Objective 3 – Implement and communicate progress on projects that fulﬁ ll the District’s Vision Plan goals through reporting results and building partner relationships Objective 4 – Build and strengthen relationships with legislators to advocate environmental protection goals Objective 5 – Position the District to take a regional leadership role in promoting the beneﬁ ts of open space and sustainable agriculture to the sustainability of our region and climate change resiliency Goal 2 – Connect people to open space and a regional environmental protection vision Objective 1 – Communicate the purpose of the regional environmental protection vision Objective 2 – Reﬁ ne and implement a comprehensive public outreach strategy, including the engagement of diverse communities and enhanced public education programs Objective 3 – Develop and lead implementation strategies to accommodate an expanding public use of District preserves consistent with environmental protection vision Goal 3 – Strengthen organizational capacity to fulﬁ ll the mission Objective 1 – P rovide the necessary resources, tools, and infrastructure, including technology upgrades and capacity building Objective 2 – Continuously improve recent process and business model changes to effectively and efﬁ ciently deliver Vision Plan projects and the District’s ongoing functions Objective 3 – Reﬂ ect the changing community we serve in the District’s visitors, staff, volunteers, and partners Goal 4 – Position the District for long-term ﬁ nancial sustainability to fulﬁ ll the District’s mission on behalf of the public Objective 1 – Continue to engage constituents for bond sales and via the work of the Bond Oversight Committee –“Promises made, promises kept.” Objective 2 – Pursue discretionary funding opportunities and partnerships to augment operating, capital, and bond funding sources Objective 3 – Ensure discretionary funding opportunities are available and successful through advocacy and education Objective 4 – Ensure large capital expenses are evaluated within the long-term ﬁ nancial model and remain ﬁ nancially sustainable Objective 5 – Ensure land acquisitions, including associated public access and land management costs, are evaluated within the long-term ﬁ nancial model and remain ﬁ nancially sustainable Kathryn Carpenter Lisa Corle Deane Little Russian Ridge Open Space Preserve Russian Ridge Open Space Preserve Russian Ridge Open Space Preserve Ji m M o s h e r ATTACHMENT 3 December 6, 2018 FY2019-20 Board Retreat #1 Page 1 FY2019-20 Strategic Plan Goals and Objectives: Recommended Updates Goal 1 – Promote, establish, and implement a regional environmental protection vision with partners •Objective 1 – Review, and if needed refine, the District’s Vision Plan •Objective 2 1 – Build and strengthen diverse partnerships to implement a collaborative approach to environmental protection on the Peninsula, South Bay and San Mateo Coast •Objective 3 2 – Implement and communicate progress on projects that fulfill the District’s Vision Plan goals through reporting results and building partner relationships •Objective 4 3 – Build and strengthen relationships with legislators to advocate environmental protection goals •Objective 5 4 – Position the District to take a regional leadership role in promoting the benefits of open space and sustainable agriculture to the sustainability of our region and climate change resiliency •Objective 5 – Work with fire agencies and surrounding communities to strengthen the preparation for and response to wildland fires Goal 2 – Connect people to open space and a regional environmental protection vision •Objective 1 – Communicate the purpose of the regional environmental protection vision •Objective 2 – Refine and implement a comprehensive public outreach strategy, including the engagement of diverse communities and enhanced public education programs •Objective 3 – Develop and lead implementation strategies to accommodate an expanding public use of District preserves consistent with environmental protection vision Goal 3 – Strengthen organizational capacity to fulfill the mission •Objective 1 – Provide the necessary resources, tools, and infrastructure, including technology upgrades and capacity building •Objective 2 – Continuously improve recent process and business model changes to effectively and efficiently deliver Vision Plan projects and the District’s ongoing functions •Objective 3 – Reflect the changing community we serve in the District’s visitors, staff, volunteers, and partners •Objective 4 – Build state of readiness for potential disruptions by completing a risk assessment and creating a business continuity plan Goal 4 – Position the District for long-term financial sustainability to fulfill the District’s mission on behalf of the public •Objective 1 – Continue to engage constituents for bond sales and via the work of the Bond Oversight Committee – “Promises made, promises kept.” •Objective 2 – Pursue discretionary funding opportunities and partnerships to augment operating, capital, and bond funding sources •Objective 3 – Ensure discretionary funding opportunities are available and successful through advocacy and education •Objective 4 – Ensure large capital expenses are evaluated within the long-term financial model and remain financially sustainable •Objective 5 – Ensure land acquisitions, including associated public access and land management costs, are evaluated within the long-term financial model and remain financially sustainable ATTACHMENT 4 Rev. 1/3/18 R-18-148 Meeting 18-41 December 6, 2018 AGENDA ITEM 2 AGENDA ITEM Formation of a Science Advisory Panel GENERAL MANAGER’S RECOMMENDATION Review and provide direction on the proposed formation of a Science Advisory Panel as described in the staff report. SUMMARY A Science Advisory Panel (SAP) would enhance the scientific validity of ecosystem management decisions and serve as an important resource to inform regional management topics. Additionally, the SAP would also present an independent science-based review of the Midpeninsula Regional Open Space District’s (District) existing and ongoing land management practices and decisions. Several strong, scientific institutions operate within the San Francisco Bay region and offer unique scientific expertise for the District’s conservation efforts. The San Francisco Estuary Institute (SFEI) and Point Blue Conservation Science (Point Blue) provide complimentary conservation science expertise. Based on staff research, the General Manager recommends forming a SAP via a contractual arrangement with SFEI, and Point Blue as a subcontractor. An annual work plan, that identifies specific topics and projects for SAP review and input, would be prepared as part of the annual action plan and budget development process. DISCUSSION Background The District regularly works on projects that require scientific expertise to inform land management and research objectives. Staff typically includes subject matter expertise on project teams. Additionally, staff have worked with local academic institutions on numerous projects to ensure that resource management decisions utilize the full breadth of scientific understanding and incorporate results of the latest research, or directly drive scientific exploration of subjects by funding original research. Scientific knowledge is driven by research (and opinions), which through repeated observation and experimentation, enhances the confidence of results and advances the field of study by coalescing around accepted scientific findings. This process can be slow and sometimes obtuse to the outside observer or land manager seeking to apply scientific findings to land management decisions. Moreover, seemingly contradictory findings can exist on a subject, requiring a trained expert familiar with the full breadth of findings on a subject to determine ‘what the science says’ (or does not say) on a particular subject. R-18-148 Page 2 The District’s usual practice of contracting with subject matter experts is largely successful in ensuring that staff applies the best and most current scientific findings to District projects. However, this practice provides a single opinion on issues, which is not always sufficient for controversial subjects where scientific opinion has not yet coalesced. Having a larger, independent scientific review body would address some of these challenges. A SAP would establish the scientific basis to aid and inform the District when faced with challenging management decisions. A SAP would also advance research efforts for important regional, science-based management topics. Additionally, a SAP would also present an independent review of the District’s existing and ongoing land management decisions. Based on staff research, the General Manager recommends using a contracting model to secure SAP services, which would provide flexibility in the formation and use of a body of scientists to provide independent review of District projects and topics of interest (See Process Diagram, Attachment 1). The Santa Clara Valley Water District, who established a Science Advisory Hub to support their One Water Plan Program in 2014, provides a good example of this contracted advisory body structure. Their science advisory structure is provided under contract by the San Francisco Estuary Institute-Aquatic Science Center (SFEI). San Francisco Estuary Institute Formed in 1986 (originally as the Aquatic Habitat Institute), the San Francisco Estuary Institute (SFEI) was established to ensure that the best and most current scientific understanding was applied to environmental management decisions within the San Francisco Bay region. SFEI founders believed that management of the Estuary would be enhanced if all sides in debates over water quality policy had access to sound, objective, scientific information about pollutants. To remain focused on the science, SFEI was prohibited from recommending water quality policies. To this day, SFEI continues to function as an independent, scientific body supporting work throughout the San Francisco Bay region, working with other organizations and agencies to inform many natural resource issues and topics well beyond its original water quality focus. SFEI is well suited to address many District subject matter needs, from contaminants and toxicity to aquatic systems restoration and other water resources information needs. Additionally, SFEI has established connections with many local institutions, allowing it to draw upon national and international scientific expertise on broad natural resource topics on an as needed basis. Some examples of SFEI’s programs and projects include their historical ecology program, the Re-Oaking Silicon Valley Project, and SFEI’s role as the science advisors for the Resilient By Design Bay Area Challenge. Point Blue Conservation Science Point Blue Conservation Science (Point Blue), formerly the Point Reyes Bird Observatory, is an interdisciplinary group of scientists organized as a 501(c)(3), working on a variety of land management and technical areas relevant to the District’s interests. Of note is the expertise they have developed through establishment of the Rangeland Monitoring Network, which is a regional monitoring program to measure the ecological value of rangelands and recommend conservation actions that enhance their function for people and wildlife. Point Blue has also established significant expertise related to climate change and restoration science, providing scientific expertise throughout San Francisco and the central coast regions of California. Science Advisory Panel Point Blue and SFEI have worked jointly on several projects within the San Francisco Bay R-18-148 Page 3 region to provide a wide breadth of scientific review. Because each organization has complimentary conservation science expertise, the General Manager recommends forming a SAP as a contractual arrangement through SFEI, with Point Blue as a subcontractor. This structure would take advantage of SFEI’s administrative experience running similar advisory bodies for the Santa Clara Valley Water District and the Sacramento-San Joaquin Delta Restoration Plan, and tap into the significant terrestrial and working lands technical expertise provided by Point Blue. The initial responsibilities of the Science Advisory Panel could include the following two main areas of work: 1. Preparation of summary briefing papers on topics of interest to the District. Approval of this list of topics could be a component of the Board’s annual action plan and budget development process. Examples of topics that are currently relevant to the District’s work are below: • Coastal Riparian Ecosystem Buffers and Ecological Function District staff have been working with partners to develop Riparian Easements on agricultural conservation projects to protect ecological functions, water quality, and riparian habitats. Significant gaps in ecological science exist relative to which ecological services are provided by differing riparian widths. Given the financial and agricultural viability costs related to protecting riparian habitats, establishing sound scientific basis for these corridor widths is critical to the successful implementation of conservation actions. • Climate Change The Board recently adopted the Climate Action Plan and Climate Policy. The work on this program now turns to studying ways for reducing the District’s greenhouse gas emissions associated with all aspects of District work. Additionally, work will soon begin to evaluate enhanced carbon sequestration actions and identify those areas and habitats that are more and less resilient to the forecasted impacts associated with climate change. 2. Providing Review and Scientific Opinion on Specific Projects During the preparation of the annual work plan, staff would identify those projects where it would be most beneficial to receive outside scientific review to inform decision- making. Examples of potential projects include: • Toxicological Review of Pesticides within the IPM Program During the review of the IPM Program and evaluation of glyphosate toxicity, the Board received information from the District’s toxicological consultant on the human health and potential environmental impacts of chemical pesticide use. Questions were raised by several members of the public regarding the adequacy of the toxicological review with a suggestion to form a science advisory committee. • Prescribed Fire Program Development The District’s development of a Prescribed Fire Program was initiated in FY2018-19 and is expected to be completed within the next two years. This work will establish the parameters and practices for using fire to manage and restore habitats across the R-18-148 Page 4 open space preserves and with partners. Fire science is a relatively young field of ecological study and significant disagreements exist regarding the efficacy of fire for ecosystem restoration and the frequency of historic fire on the landscape. This, combined with the inherent risk of fire, will mean that sound science will be critical to the success of this program. In addition to these main areas of focus, a SAP could also host an Annual Year-in-Review meeting to share the results of the work program and major findings with a wider audience including our partners, stakeholders, and the public. FISCAL IMPACT Preliminary estimates for the expected contract cost for SFEI to convene and coordinate a Science Advisory Panel range from $50,000 to $100,000 annually. The annual cost would vary dependent upon the number of meetings held per year, the number of topics and management actions requested for review, and deliverables or ‘white papers’ requested. If supported, a budget for this panel would be included in the Fiscal Year 2019-20 Budget & Action Plan. BOARD COMMITTEE REVIEW This item is presented to the full Board given full Board interest. PUBLIC NOTICE Public notice was provided as required by the Brown Act. CEQA COMPLIANCE This item is not a project subject to the California Environmental Quality Act. NEXT STEPS If supported by the Board, staff will incorporate the development of a Science Advisory Panel as laid out in this report into the Fiscal Year 2019-20 Budget process. Attachments: 1. Proposed Science Advisory Panel Process Diagram Responsible Department Head: Ana Ruiz, AICP, General Manager Prepared by: Kirk Lenington, Natural Resources Manager Attachment 1: Proposed Science Advisory Panel Process Diagram Scope of Work and Budget Request Science Advisory Panel San Francisco Estuary Institute (SFEI) with Point Blue Conservation Science (Point Blue) Initiating Party : Board of Directors When: Annual Action Plan Process What: “Topics of Interest Briefing Papers” Initiating Party: Staff When: Annual Action Plan Process What: “Project Specific” Public Planning and Natural Resources Committee (PNR) Review, comment on, and consider forwarding SAP Report to Board Ad-Hoc Scientists and Researchers Sub-Contract Additional Expertise? February Action Plan & Budget Approval Paper and Reports Research and Meetings (Distinct to Each Project/Request) General Manager and Staff Review Review, comment on, and recommend FYI or Presentation to PNR General Manager INITIATION CONTRACTING AND BUDGET WORK AND PROCESS May 2015 Midpeninsula Regional Open Space District Financial and Operational Sustainability Model May 22, 2015 Mr. Steve Abbors General Manager Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022 Dear Mr. Abbors: Management Partners is pleased to provide this report of Financial and Operational Sustainability Model (FOSM) study. This report is the culmination of work completed over the past nine months and reflects extensive learning, research and analysis, application of best practices, and importantly, collaboration with the District to develop a preferred organization structure that aligns functional responsibilities in a manner that supports the District’s mission and Vision for the future. The analysis and recommendations contained in this report have been reviewed with staff and were presented to the Board over the course of three public study sessions (November, 2014 and January and March 2015). We appreciate your collaboration and the collaboration of other individuals in the District throughout this engagement. Each person’s candor, energy and ideas for improvement were helpful as we carried out this important work. To assist with implementation, we are providing an Implementation Action Plan under separate cover. The plan will identify key steps needed to complete each recommendation, the individual who will be responsible, the estimated task time for completion as well as the suggested priority (short-, medium- or long-term). Nancy Hetrick and other members of the Management Partners team remain available and committed to working with you and your team as the District moves into the implementation phase of FOSM. Sincerely, Gerald E. Newfarmer President and CEO 1730 MADISON ROAD • CINCINNATI, OH 45206 • 513 861 5400 • FAX 513 861 3480 MANAGEMENTPARTNERS.COM 2107 NORTH FIRST STREET, SUITE 470 • SAN JOSE, CALIFORNIA 95131 • 408 437 5400 • FAX 408 453 6191 3152 RED HILL AVENUE, SUITE 210 • COSTA MESA, CALIFORNIA 92626 • 949 222 1082 • FAX 408 453 6191 Financial and Operational Sustainability Model Table of Contents Management Partners Table of Contents Executive Summary .................................................................................................................................. 1 Three Sustainability Challenges ..................................................................................................... 1 Structure of the Report .................................................................................................................... 3 Key Recommendations .................................................................................................................... 5 Methodology .............................................................................................................................................. 7 The Changing Environment of the District ....................................................................................... 10 Developing a Strategic Plan .......................................................................................................... 10 Developing a Vision Plan and Presenting Measure AA to Voters .......................................... 11 The Challenge of Measure AA Funding ..................................................................................... 11 Operating with Greater Public Visibility .................................................................................... 13 Introducing the FOSM ................................................................................................................... 14 Sustainability Challenges and Opportunities ................................................................................... 15 Defining Sustainability .................................................................................................................. 15 Project Planning and Delivery ...................................................................................................... 15 Increased Pressure to Deliver Projects on Time and On Budget ............................................. 16 Establishing Clear Priorities for Staff ....................................................................................... 17 A New Project Delivery Approach ........................................................................................... 18 Project Management Systems and Tools .................................................................................. 21 Increasing Staff Capacity through Contractors ........................................................................ 23 Building a Dependable Engineering/Construction Management Function ............................ 24 Cultivating Collaboration and Partnerships ............................................................................ 24 Land and Property Acquisition .................................................................................................... 25 Operations ....................................................................................................................................... 27 District Growth Over the Last Ten Years ................................................................................ 27 Determining Operational Staffing Needs ................................................................................. 29 Modernizing How Workload is Managed................................................................................. 35 Operations Staff Deployment ................................................................................................... 36 Ranger Deployment .................................................................................................................. 38 Natural Resources Support to the District ............................................................................... 39 i Financial and Operational Sustainability Model Table of Contents Management Partners Field Office Challenges ............................................................................................................. 40 Planning for Facilities to Meet Operations Staff Expansion .................................................... 40 Management Support and Systems ............................................................................................. 41 Peer Comparison ....................................................................................................................... 42 Financial Management ............................................................................................................. 43 Purchasing ................................................................................................................................ 45 Information Technology and Systems....................................................................................... 46 Human Resources ..................................................................................................................... 49 Facility Management ................................................................................................................ 50 Document Management ........................................................................................................... 51 General Manager’s Office ......................................................................................................... 51 Office of the General Counsel ................................................................................................... 53 Building the Sustainable Organization Structure ............................................................................ 55 Guiding Principles ......................................................................................................................... 55 Organizational Design Strategic Objectives ............................................................................... 56 Organization Structure Options ................................................................................................... 56 Option 1 – Parallel Organization for Measure AA .................................................................. 58 Option 2 – Matrix Organization .............................................................................................. 59 Option 3 – Integrated Core Business Model............................................................................. 61 Staffing Projections......................................................................................................................... 65 Projections Methodology .......................................................................................................... 66 Projections ................................................................................................................................ 68 Financial Sustainability ......................................................................................................................... 71 Midpeninsula’s Fiscal Model ........................................................................................................ 71 Model Stress Testing ...................................................................................................................... 73 Risk Factors ..................................................................................................................................... 74 Road Map to Implementation ............................................................................................................... 75 Change Management Strategy ..................................................................................................... 75 Planning ................................................................................................................................... 76 Defined Governance .................................................................................................................. 76 Committed Leadership .............................................................................................................. 77 Informed Stakeholders ............................................................................................................... 77 Aligned Workforce .................................................................................................................... 78 Phasing: How do we get started with these changes? ............................................................... 78 Conclusion ................................................................................................................................................ 80 Attachment A – List of Recommendations ......................................................................................... 82 ii Financial and Operational Sustainability Model Table of Contents Management Partners Tables Acres of Owned and Managed Lands ............................................................................. 31 Peer Comparison of Ranger Staffing Levels and Responsibilities ............................ 32 Internal Support Staffing Among Peer Organizations ................................................ 43 Business Lines and Corresponding Departments ......................................................... 65 Workload Data Used for Scaling Ratios.......................................................................... 67 Staffing Model Projected Staffing Increases by Business Line ................................. 69 Summary of Key Assumptions of the Fiscal Model ..................................................... 72 Figures Figure 1. Current and Projected Workload ...................................................................................... 12 Figure 2. Projected Cumulative Capital Expenditure with and without Measure AA ........... 13 Figure 3. Annual Capital Expenditure Projection for the District .............................................. 17 Figure 4. Cumulative Projected Capital Expenditures with and without Measure AA ......... 17 Figure 5. Ten-year History of District Acreage by Type ............................................................... 28 Figure 6. Ten-Year History of Operations Staffing Levels ........................................................... 28 Figure 7. Acres of District Land per Operations FTE .................................................................... 29 Figure 8. Miles of District Trails per Operations FTE ................................................................... 30 Figure 9. Percentage of Publically Accessible Land ...................................................................... 31 Figure 10. East Bay Regional Park District Pipeline Program ....................................................... 34 Figure 11. Maintenance Crew Hours by Responsibility Type for FY 2013-14 ............................ 37 Figure 12. Parallel Measure AA Structure ......................................................................................... 59 Figure 13. Matrix Measure AA Structure ........................................................................................... 61 Figure 14. Integrated Core Service Structure .................................................................................... 62 Figure 15. Planning and Project Delivery .......................................................................................... 63 Figure 16. Operations and Visitor Services ....................................................................................... 63 Figure 17. Finance and Administrative Support .............................................................................. 64 Figure 18. Office of the General Manager ......................................................................................... 64 Figure 19. Applied Scaling Criteria by Department ........................................................................ 66 Figure 20. Projected Staffing by Business Line ................................................................................ 69 Figure 21. Operational Expenses as Percentage of Tax Revenue .................................................. 73 Figure 22. Operational Expenses as Percentage of Tax Revenue With One Great Recession ............................................................................................................................... 74 iii Financial and Operational Sustainability Model Executive Summary Management Partners Executive Summary In 2014, the Midpeninsula Regional Open Space District (District) adopted an ambitious 30 year Vision Plan based on extensive constituent engagement and secured broad public support to implement the plan with the passing of Measure AA. The initiative brings $300 million in bond capacity to implement the plan’s elements. To support the District’s commitment to connect the public with an additional 47,000 acres of preserve land and over 180 new miles of trails, and position the agency to develop additional facilities to open new preserve areas for public enjoyment, the agency chose to evaluate its structure, capacity, and financial readiness. This has come to be referred to as the FOSM (Financial and Operational Sustainability Model). The growth in size, scale and impact of the District is significant. Every dimension of District work must scale up in order to keep pace with Vision Plan goals and the obligations that come with issuance of bonds. Significant change is anticipated with the implementation of the Vision Plan and this requires strategic thinking and thoughtful implementation. The Financial and Operational Sustainability Model is a proactive effort to address the changing demands on the organization. It is unprecedented work that requires commitment, careful pacing, and a deliberate change management process. Through FOSM the District is committing to a strategic approach to planning for the future that: • Anticipates change • Is action-oriented • Is necessarily dynamic and interactive • Provides a framework that is scalable • Allows for sustainable staffing in the short and long term Three Sustainability Challenges The Measure AA success provides additional revenue to the District for capital projects that will increase public access to preserve land, enhance habitat restoration, and increase the acreage of protected open space 1 Financial and Operational Sustainability Model Executive Summary Management Partners lands. It represents a major infusion of resources to support the District’s mission, and the District will be challenged to accomplish more work than it ever has. In the private sector, one might compare the District to a “start-up” company which has just secured venture capital funding. The challenge for the organization is now to execute and grow its capabilities to perform in an effective and efficient manner. The themes that emerged during extensive interviews parallel the issues that “start-ups” face with a rapid increase in service demand. To meet the pace of unprecedented growth, the District must solve three sustainability challenges: 1. Develop business and management information systems (i.e., maintenance, client, and project management systems); 2. Address the expectations and project demands created by the success of Measure AA (i.e., tripling capital and acquisition spending); and, 3. Gradually transform the District’s primary focus from acquisition to new long-term operational responsibilities. High-performing organizations share certain structure characteristics. They are designed around outcomes, not individual specialties, and reflect how the team is expected to work together. Such organizations are structured with a clear chain of command but have an expectation of horizontal teamwork to achieve desired outcomes. Finally, they create boundary-crossing partnerships that encourage collaboration. Through the lens of these effective organization concepts, Management Partners developed a set of guiding principles unique to Midpeninsula that provide a framework for organization alternatives. The guiding principles reflect the unique challenges and opportunities facing the organization and serve to guide and inform the implementation of FOSM changes. The recommendations contained in this report inform, reflect, and accompany the change that has already begun at Midpeninsula. FOSM requires a new way of doing business, including greater accountability, investment in systems and tools, and a reporting structure that benefits from clear lines of responsibility and functional alignment. At the same time, FOSM maintains the existing culture of passion and teamwork and is firmly grounded in the organizational values that make the District special. 2 Financial and Operational Sustainability Model Executive Summary Management Partners Structure of the Report This reports reflects the results of seven months of collaborative work. In the first section, Management Partners reviews the methodology used. The process began with extensive outreach and engagement with staff. This collaborative and iterative approach continued throughout as observations were made and recommendations developed. Next, we present the drivers of Midpeninisula’s changing environment. Reflecting on these drivers provides context to the review of organizational challenges and opportunities that follow. In the Changing Environment section of this report we observe that as a result of Vision Plan implementation, the District can plan to transition over the course of the next few decades from an organization largely focused on land acquisition to one focused on project delivery, and then to one focused on operations and maintenance. Each step along this continuum will require staffing adjustments and organizational change and development. Short-term efforts to prepare for Vision Plan implementation will largely be focused on staffing to ensure that project delivery can be carried out with efficiency. And to ensure that policies are developed so that operations and maintenance functions are being appropriately built up as preserves are opened to the public and more land is acquired, while also addressing current workload needs. In the short term, implementation will require the District to focus more heavily on capital improvement project delivery as it works to make more lands publically accessible by constructing staging areas and trails. This transition will put immediate strain on the organization’s planning, construction, and project delivery functions, which will likely require immediate support. Making District lands publically accessible will also create long-term effects on visitor and field services which must be anticipated and gradually addressed to prevent the need for “just in time” staff increases and insufficient capacity to manage an increasing workload. Following the Changing Environment, Management Partners reports on the sustainability challenges and opportunities facing Midpeninsula. This section of the report is organized by service area in the following manner: • Planning and project delivery • Land and property acquisition • Operations • Management support and systems 3 Financial and Operational Sustainability Model Executive Summary Management Partners Each section contains observations based on qualitative input and data analysis and includes corresponding recommendations. The observations have been reviewed with staff at all levels and presented to the Board in earlier study sessions. The complete set of FOSM recommendations are presented as Attachment A. First and foremost, achievement of the Vision Plan and the obligations of Measure AA put significant pressure to deliver projects as well as additional expectations for transparency on the District. As a result of Measure AA, the District will have to more regularly report how much money has been spent and what tasks have been completed for the various key projects. This expectation will require a significant investment in business and management systems used to track projects and their corresponding costs, as well as an investment in the staff necessary to develop, implement, and monitor these systems. Setting up and implementing these systems should be considered the first and foremost priority to prepare for the full implementation of Measure AA. The facilities that house the District’s headquarters along with the Skyline and Foothills field offices are essentially at capacity. The District has been waiting for the results of this FOSM study to inform the development of a facilities plan that will lay out how District facilities will expand or be reconfigured to allow for a robust staffing augmentation that will be required as a result of Measure AA planning and implementation. There is a tension within the organization between the need to focus on program and project delivery and ongoing operations to sustain existing and future infrastructure. This needs to be managed proactively. Gradually adding operations staff and addressing the systems and facility deficits in the near term, and creating a project delivery process that systematically considers operational impacts early in the process, will help alleviate this tension. Supporting employees with the significant organization changes in mission and structure will be as important as getting project delivery right. Thinking about and creating a strategy to supply employees with the resources they need to do the work, regular communication regarding the agency’s changes, successes and lessons learned as well as regularly celebrating milestones, will allow the agency to deliver results and maintain the momentum over the long term. Due to the 30-year time horizon of the Vision Plan, the agency will continue to evolve and shift to respond to the changing needs. To sustain the work necessary to connect the public to open space areas and improve access to lands, succession 4 Financial and Operational Sustainability Model Executive Summary Management Partners planning will play a key role in building the agency’s capacity to meet these ongoing commitments to citizens. Key Recommendations The recommendations presented in this report will begin a process of organizational change that will fundamentally alter the operating environment within the District. More specifically, the funding attached to Measure AA and the implementation of the Vision Plan will prompt: • A balanced organizational focus on public access and education, restoration, and continuing acquisition of land • Greater attention to visitor services and customer engagement • Focus on project delivery and greater pressure to complete projects on time and under budget • Stronger commitment to transparency in efforts to report Measure AA funding usage • Scaled up operation with significantly more employees and more contracts to manage • Structural reorganization of district functions Management Partners developed guiding principles in conjunction with Midpeninsula’s Executive Team to inform the evaluation of various organization models. These principles and the model options that were explored are contained in the report section that follows the sustainability challenges and opportunities: Building a Sustainable Organization Structure. Management Partners’ analysis of three structure options resulted in a preferred model referred to as the Integrate Core Services Model. The model has been reviewed with staff at all levels and received Board input during its January 28 study session. Key components of this model include: • Alignment of finance and administrative services within a single department under the leadership of a CFO/Administrative Services Director • Centralization of information systems and technology under an IST manager that reports to the CFO • Formation of an Engineering and Construction department that together with Planning and Real Property reports to a single Assistant General Manager • Splitting of the Operations department into two to address greater demand for visitor services, growth, and increases in District assets that require regular, ongoing maintenance 5 Financial and Operational Sustainability Model Executive Summary Management Partners • Alignment of the new Visitor Services and Land and Facilities departments with the Natural Resources department under a single Assistant General Manager • Moving of the Public Affairs team to the General Manager’s office to leverage the capacity and resources it provides District-wide Also as part of the Building a Sustainable Organization Structure section, Management Partners offers staffing projections by major service area. These are based on criteria established using data obtained from the District and current workload ratios. The projections demonstrate anticipated growth in the near term (next five years) and long-term (30 years). Management Partners recommends the District periodically and systematically re-evaluate these projections over time. The Board will have an opportunity to assess organizational staffing needs through annual budget requests made by the General Manager. In light of the staffing projections, Management Partners conducted a stress test of the District’s robust fiscal model to determine the reasonableness of its assumptions and the ability for the organization to increase staff at the rate that is projected. Based on the stress test and the conservative nature of the assumptions built into the model, Management Partners concluded the District is well-positioned to fund its anticipated growth. The changes proposed through FOSM will not happen easily and must take time. The FOSM report contains 60 recommendations. Just as the process to identify these recommendations was thoughtful, engaging, and evolutionary, so must the implementation process be deliberate, adaptive, and paced to reflect and adjust to the changing environment. The Road Map for Implementation provides a framework for moving forward. In addition, the District - with Management Partners’ support - will develop implementation plans that detail the steps that must be taken, the resources that will be required, and the individuals responsible for ensuring successful completion. Management Partners looks forward to continuing to support Midpeninsula on its inspired journey. This is a time of great opportunity. The organization is filled with smart, capable, and committed people who believe in the work they do and with the right tools and support will carry Midpeninsula successfully into the future. 6 Financial and Operational Sustainability Model Methodology Management Partners Methodology Management Partners began work on the Financial and Operational Sustainability Model (FOSM) with a thoughtful and engaging learning phase. The firm reviewed extensive background information related to services and functions of the District along with information specific to the Vision Plan and Measure AA priority projects. We administered a benchmarking survey of peer agencies to obtain insight on the organization structure, staffing, and practices of similar organizations and conducted extensive employee engagement, including a day-long field tour hosted by department staff. The peer survey included agencies with similarities to the District. Peers were selected based on their mission, assets (such as preserves, trail services and total acres), total expenditures, and organization size. Of the seven agencies contacted, five responded including the East Bay Regional Park District, Marin County Parks and Open Space, Santa Clara County Parks and Recreation Department, and Boulder County Parks and Open Space and Jefferson County Open Space, Colorado. This review included an assessment of best practices used by the other agencies that may be applicable to the District. More than 25 District employees participated in individual interviews, including members of the leadership team and staff responsible for various District programs. All District employees were offered an opportunity to provide input and 60 frontline staff participated in five focus groups. An additional large group interview was offered to those who were unable to participate in earlier discussions. Our team also joined District field staff in a dawn to dusk tour of the District’s preserves and facilities. To aid in information collection and understanding, Management Partners met with teams of agency experts on specific topics including: Measure AA Project Group, Operational Impact Group, Capital Projects Group, Acquisitions Group, Coastal and Grazing Group, and the Financial Modeling Group. Finally, we conducted several additional interviews to take a deeper look at the District’s current information technology systems and capabilities. 7 Financial and Operational Sustainability Model Methodology Management Partners In interviews, discussions focused on what’s working, what’s not working, and what needs improvement to build a sustainable organization and implement the MAA projects. It is clear that employees working for the District believe in the agency’s mission to preserve natural resources. Each individual and group we met with clearly communicated their commitment to the agency’s mission and purpose. Employee commitment and alignment with an agency’s mission is critical to building a high performing organization. The District has successfully accomplished this component of organizational sustainability. As we probed deeper, other themes emerged that are typical of agencies in the midst of rapid growth. These themes are explored throughout the report. The data collection phase provided the substance to construct a framework to evaluate the organization models. To do this, we created guiding principles, strategic objectives, and identified the agency’s key services areas. With these tools, the Management Partners’ team spent November 2014 through January 2015 reviewing comparable agency organization models and designing a variety of organization structure alternatives. Each model reflects a sustainable strategy to build agency capacity in the following areas: • Administrative Systems; • Program and Project Delivery; • Delivery of the Vision Plan – Measure AA Projects; and • Change and Adaptation. This process was highly iterative and involved collaboration with the Executive Team, Controller, and department managers as the three organization options evolved. The Board of Directors received a briefing regarding this information at a Study Session on January 28, 2015. Next, Management Partners tested Midpeninsula’s fiscal model. We found that the assumptions built into the current fiscal model support the staffing projections anticipated of the recommended structure. Even with the inclusion of a major future recession, similar to the Great Recession of 2008, Midpeninsula’s expenditures do not exceed revenues until 2043. The test showed there is ample time to make financial adjustments and respond should such a downturn occur again. Moreover, Midpeninsula’s history of conservative revenue and expenditures assumptions along with the pattern of spending less than budgeted each year, provides further assurance of sustainability. Finally, the financial model includes a “self-correcting” component so if revenues decline expenditures will correspondingly decrease. 8 Financial and Operational Sustainability Model Methodology Management Partners Lastly, the FOSM included the development of ratios or multipliers to provide a system to calculate additional staff needs based on workload growth over time within the preferred organization structure. The criteria reflect a combination of best practices and Midpeninsula’s past performance. As such, the criteria are different across the array of department and divisions. For Visitor Services and Land and Facilities Services, the number of miles of trail was used. For Planning, Engineering and Construction, and Natural Resources, the number of projects provides a meaningful calculation. We relied on staff ratios to calculate internal service department needs. Despite the lack of available models, staff projections for Real Property, Public Affairs, and the General Manager’s Office reflect our best professional estimates. Management Partners worked closely with Midpeninsula throughout this engagement utilizing the Executive Team and an internal project team structure to inform understanding, test assumptions, and affirm recommendations. Midpeninsula’s internal project team consisted of managers in addition to a couple of key staff. In addition, Management Partners briefed all staff and the Board in open public session as major milestones in the engagement were achieved. Study session check-ins with the Board occurred in November 2014, and January and March 2015. The positive working relationship developed between Midpeninsula and Management Partners over the past seven months continues as work shifts into implementation. 9 Financial and Operational Sustainability Model The Changing Environment of the District Management Partners The Changing Environment of the District As a result of a 1972 voter initiative, the Midpeninsula Regional Open Space District was established to preserve the regional greenbelt in northwestern Santa Clara County. Since then, through a number of additional voter initiatives, the District’s acreage expanded to include significant portions of San Mateo County and a small portion of Santa Cruz County. With a determined focus on preservation, the District spent the subsequent decades building a network of open space preserves with diverse ecosystems. Its preserves include redwood, oak, and fir forests, chaparral-covered hillsides, riparian corridors, grasslands, and wetlands. Up until the last few years, the District remained steadfastly oriented around its foundational goal of preservation, with a special emphasis on land acquisition and environmental restoration. Developing a Strategic Plan In September 2011, the Board adopted the Midpeninsula Regional Open Space District Strategic Plan. The plan signaled a policy shift from an overriding focus on acquisition to a balanced focus on all three legs of the mission – acquisition, restoration, and public access/education, marking a considerable shift in organizational priorities for employees. With the Strategic Plan, the organization began to place greater focus on developing its preserves and introducing the necessary infrastructure to facilitate public access, such as parking lots, restrooms, and other staging area amenities. With “public enjoyment and education” written into the organization’s mission, the Strategic Plan also presented the District as a much more outwardly focused organization. The plan acknowledged a need to better understand and connect with the District’s communities and partners by establishing three core goals: 1. Promote and establish a common conservation vision with partner agencies 10 Financial and Operational Sustainability Model The Changing Environment of the District Management Partners 2. Connect people to open space and a regional vision 3. Strengthen financial and staffing resources to fulfill the mission In short, the District’s Strategic Plan marked an important shift in the trajectory of the organization and provided the foundation for the Vision Plan and Measure AA. Developing a Vision Plan and Presenting Measure AA to Voters With the organization’s direction articulated in its Strategic Plan, the District embarked on a subsequent effort in 2012 to develop a long-term organizational vision that reflects the interests and needs of its communities and partners. The Vision Plan became a major priority for the District as it realized a need to build alignment and understanding with its major stakeholders and create an informed public. Over an 18-month period, 2,200 participants provided input in the design of a roadmap for future District work. Although the organization had historically focused its attention on conservation and restoration of preserves, the 2014 Vision Plan built off the strategic plan and articulated a number of specific projects designed to open up the District’s closed acres to the public by developing staging areas, trails, appropriate signage, and other amenities. To fund these projects, the District presented Measure AA, a $300 million general obligation bond measure, to voters in June 2014. The bond measure was approved by over two-thirds of voters, authorizing the District to use Measure AA funding to support four major goal areas: • Protecting natural open space lands • Opening preserves or areas of preserves that are currently closed • Constructing public access improvements such as new trails and staging areas • Restoring and enhancing open space land, including forest, streams, watersheds, and coastal ranch areas The Challenge of Measure AA Funding The success of Measure AA will give the District the financial resources to fully implement its long-term Vision Plan. While it represents a major infusion of resources to support the District’s mission, it will entail a dramatic increase in workload, especially in the area of project delivery and construction. 11 Financial and Operational Sustainability Model The Changing Environment of the District Management Partners Figure 1 shows the dramatic growth in anticipated land and trails that will require conservation, restoration, and access based on the 2014 Vision Plan. Publicly accessible miles of trail is anticipated to nearly double from 230 to over 400 miles, while land acreage will grow from 62,300 to more than 100,000 acres. Figure 1. Current and Projected Workload Figure 2 depicts the District’s capital expenditures over the next 30 years based on its current work plan, with and without Vision Plan projects funded through Measure AA. The work plan that includes Measure AA proposes $603 million in capital expenditures by 2044, which essentially doubles the District’s current, non-Measure AA work plan projections. These statistics are particularly important because the District has historically expended only about 50 to 70% of its planned annual capital expenditure budget, meaning that even without Measure AA funding, the District has been challenged to meet capital expenditure commitments each year. 62,300 230 283 0 50 100 150 200 250 300 350 400 450 0 20,000 40,000 60,000 80,000 100,000 120,000 Mi l e s T r a i l s Ac r e s o f L a n d Acres of Land Miles of Trail 12 Financial and Operational Sustainability Model The Changing Environment of the District Management Partners Figure 2. Projected Cumulative Capital Expenditure with and without Measure AA A parallel to the District’s current situation can be drawn from the private sector. One might compare the District to a “start-up” company which has just secured substantial venture capital funding. The District has traditionally described itself as a small organization whose success has been built from the expertise and success of its high-performing employees. The challenge for the organization is now to execute and grow its capabilities to perform in an effective and efficient manner. Operating with Greater Public Visibility Prior to the Strategic Plan, District staff felt they operated in a space that was less visible to the public. Despite compliance with all Brown Act requirements, without a mission focused around public access and education, much of the preservation work has been pursued with little public input and minimal public attendance at Board meetings. The Strategic Plan, Vision Plan, and Measure AA each solicited public outreach above and beyond what is required and memorialized the public’s interests for greater access to preserves, causing the organization’s visibility to grow dramatically over the past several years. As for the future, District staff understands that public expectations will only continue to grow, especially as more preserves are developed for public access. 603.23 275.44 0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 mi l l i o n s d o l l a r s ( $ ) Total Cumulative Capital Expenditure Total Cumulative Capital Expenditure - Without MAA 13 Financial and Operational Sustainability Model The Changing Environment of the District Management Partners Introducing the FOSM The District engaged Management Partners to help develop a strategy to give current employees the tools and resources they need to effectively absorb this added workload and successfully implement the Vision Plan projects in a way that supports long-term organizational sustainability. Every recommendation incorporated into this FOSM report has emerged from this fundamental question: what changes need to occur in the short and long term to prepare the District for the significant and urgent pressure exerted by Measure AA funding and the Vision Plan project schedule? 14 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Sustainability Challenges and Opportunities The Financial and Operational and Sustainability Model (FOSM) is a strategic and deliberate approach to manage how the District plans to grow over the next several decades. This section of the report presents the major challenges and opportunities around organizational sustainability with a focus on core District functions, including project planning and delivery, land and property acquisition, operations, and management support and systems. Defining Sustainability Because the term sustainability can carry different meanings for different individuals, it is worth clarifying what is meant by the term in this report. For the FOSM, sustainability implies an organizational commitment to the “double bottom line,” meaning the District must embody and work towards two key forms of sustainability, including: • Economic sustainability: the District must be financially viable in the long-term • Organizational sustainability: the District must build an optimal organizational structure that supports high quality performance and results in the long-term Committing to a double bottom line strategy involves assessing risks and challenges to the organization’s success over time, identifying ways to build staff capacity across the organization, and engaging in systems thinking at a macro-level. The FOSM approach outlined in this report identifies both short and long term recommendations involving strategic investments in organizational resources and staffing, as well as structural changes to better align complementary functions and achieve greater efficiencies. Project Planning and Delivery The implementation of the District’s Vision Plan and the additional funding from Measure AA will have a significant impact on how District projects are managed and delivered. The implementation of the Vision 15 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Plan and Measure AA will require a significant shift in priorities for staff. For decades the District has been focused around preservation and acquisition, which are long-term endeavors that require persistent follow- up, but take time to materialize. Over 60% of the projects listed in the five-year work plan for Measure AA (dated March 25, 2015) result in greater public access to District lands, meaning the District will be more focused on project delivery of public access projects (building staging areas and trails) than it has been in the past. A greater focus on public access project delivery requires staff to operate under more short-term time horizons and with greater transparency to the public. This transition will require District staff in every department and function to cultivate new skill sets, but more importantly, the transition will require an organizational culture shift that embraces realistic work planning and holds staff accountable for completing projects on time and on budget. More specifically, the organization will have to be more diligent in monitoring project milestones and holding staff accountable for results, while managing a more robust workload. Increased Pressure to Deliver Projects on Time and On Budget Measure AA projects will be funded through a combination of tax exempt and taxable bonds. For projects funded through tax exempt bonds issued under Measure AA, the District must show a reasonable expectation of spending 85% of bond proceeds within the three-year period following each bond issuance. This means that the District must reasonably schedule sufficient Measure AA project work and allocate an average of $10 million of corresponding project spending per year over 30 years in Measure AA capital spending. Moreover, in addition to Measure AA capital projects, the District will also be carrying out capital projects that are not supported by Measure AA. Figure 3 shows projected annual expenditures for capital projects that will be implemented as part of Measure AA and those that are expected to come from alternative funding sources. Figure 4 shows the cumulative projected capital expenditures with and without Measure AA, which effectively conveys the magnitude of additional project delivery work that will be required over the next 30 years. The District’s ability to meet the challenge of Measure AA in the area of project delivery will depend on a number of changes to its organizational systems and culture. 16 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Figure 3. Annual Capital Expenditure Projection for the District Source: Financial forecast provided by the Midpeninsula Regional Open Space District Controller. Figure 4. Cumulative Projected Capital Expenditures with and without Measure AA Source: Financial forecast provided by the Midpeninsula Regional Open Space District Controller. Establishing Clear Priorities for Staff Based on the forecasted increase in project delivery work and expectations, establishing clear priorities and maintaining a focus on these priorities will be essential as employees aim to successfully carry 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 In M i l l i o n s Total CAPEX Non MAA CAPEX MAA CAPEX Linear (Non MAA CAPEX) Linear (MAA CAPEX) 0 50 100 150 200 250 In M i l l i o n s CUMM TOTAL CAPEX CUMM NON MAA CAPEX 17 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners out this work. Historically, the District has been able to execute only 55% to 74% of its capital improvement projects annually. Across the District, staff reported that projects are often placed on hold due to changing priorities, often times resulting in reworking the plans when the project is picked up again. This practice appears to be woven into the District’s culture to respond as Board priorities shift and opportunities emerge. In order to create a more mature organization with systems capable of managing a more expansive project delivery workload, the District will have to first learn to commit to its short and long terms plans and create priorities that are more consistent over time. Recommendation 1. Develop mechanisms that periodically clarify and reinforce organizational priorities for staff, so that work can be planned and managed in alignment with those priorities. Such mechanisms include annual or semi-annual Board workshops that present progress toward existing District priorities, solicit feedback from Board members on how future priorities should change or evolve, and importantly, communicate tradeoffs that must occur if priorities shift or new priorities are added. Recommendation 2. Develop a communication strategy to regularly provide information updates to the Board and public regarding project progress and results, and promote transparency to build public trust. This will also supply the Board of Directors with key messages and allow them to remain focused on “big picture” policy issues and Board-approved priorities to empower the General Manager to focus on the implementation of the Board’s policy direction to reduce the temptation to shift Board priorities midstream. A New Project Delivery Approach Balancing the broadened mission generates a sense of urgency and creates pressure to deliver more projects. The Vision Plan and Measure AA increase visibility of District projects. There will be greater public interest around spending and greater need to monitor the number of projects being delivered. As such, to respond to the urgency and pressure, the District will need to add capacity (people, expertise, services) in the area of project planning and delivery to meet the increased demands. 18 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners The District lacks an established, uniform, and shared project delivery approach that is shared among all project managers. Without a path for project delivery from inception to completion, it is unlikely the District will keep pace with the added workload. Currently, project delivery teams are organized on an ad-hoc basis. Projects are managed using a “cradle to grave” approach where the project planner develops the preliminary project, design and follows through with construction management. This model for project delivery is appropriate for a small-scale organization with a limited number of projects. Scaling up project delivery efforts to match Vision Plan commitments requires a strategic approach that increases staff efficiency and leverages their abilities by assembling project teams and dividing the workload in accordance to staff skill and expertise. Heightening efficiency of project delivery will require comprehensive project planning to assess the departments, divisions and contractors working to move the project forward. A comprehensive project delivery approach requires staff to delineate project scope, cost, schedule, staffing, staff capacity, risk factors, goals and objectives, third party agreements, regulatory issues, public input, and project owners through the life of the project, along with the appropriate ownership hand-off points. Critical to this approach is the fact that the project leader will change over the life of the project. Building a comprehensive approach to project delivery requires that a project team is formed at the start with designated leads to carry specific phases of the project through to completion. Each project lead transfers responsibility for project management at the completion of their phase of implementation (i.e., from a lead in project planning to a lead in engineering and construction). Each project team member remains involved through to the end. This approach ensures each department or division “owns” parts of a project for a specific period of time and delivers a fixed set of services while ensuring that institutional and technical project knowledge is retained and accessible throughout the life of the project. In this way, the project ownership belongs to the team, rather than an individual. This approach provides several enhancements to the District’s current process, as it: 1. Retains a high degree of organizational collaboration. The comprehensive review of the projects from start to finish requires that representatives from all departments involved in the project 19 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners from start to finish are at the table in the initial planning phase. Project owners are clearly identified along with their respective roles and responsibilities early in the project’s life cycle. 2. Promotes clear and continuous communications throughout the project’s life cycle. The comprehensive approach allows for proper “hand-off” of a project from one lead to another lead, with clear communication of roles and responsibilities to facilitate effective and efficient decision-making. Communications horizontally as well as vertically within the organization are needed to ensure successful delivery of the project. 3. Improves quality and quantity of information exchanged. The comprehensive approach to project delivery improves the quality and quantity of information exchanged throughout the organization on a given project. This allows team members to anticipate and incorporate the project responsibilities in their individual work plans. More importantly, establishing a shared understanding of the project, owners, timing, and roles and responsibilities reduces reprioritization of work, improves the focus on project management, and ensures alignment amongst all project team members. 4. Mobilizes problem-solving and trouble-shooting resources. The comprehensive approach to project delivery assembles a cadre of problem-solving and trouble-shooting resources led by a technical expert that has the greatest experience and knowledge during that particular phase of work to facilitate problem-solving. Delivering projects comes with anticipated and unanticipated issues. This approach provides adaptive and responsive resources to problem solving related to scope, budget and scheduling and puts projects back on course. Designing project solutions also has the benefit of potentially leveraging lessons learned from concurrent and past work. 5. Empowers employees. High functioning organizations “give the work back to the employee.” With decision-making authority vested in the project delivery team, problem solving happens within its members. If an organization depends on one person or even a limited number of individuals to make organizational decisions, projects stop and the backlog of work grows and undermines the overall work plan of an organization. 20 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 3. Convene internal stakeholders to develop a refined, comprehensive project delivery approach that ensures proper oversight, clarity of roles, prioritization, predictability, and follow-through. Such an approach should move away from a generalist model with a single project manager carrying the project through to completion to a team-based, specialist model that enables multiple technical experts to move the project forward. To illustrate the benefits of a specialist model, it is worth exploring how the District currently manages the California Environmental Quality Act (CEQA) review process and how the process would be affected by a more comprehensive project delivery approach. Currently, the District lacks a uniform environmental review process to inform project management and project delivery and ensure consistency. This can create project delays and inefficiencies, forcing managers to “reinvent the wheel” whenever a new review is required. Without a uniform process, project managers may not anticipate all steps involved in CEQA review and underestimate the time it takes to complete the process and/or incorporate mitigation measures that differ for very similar projects. Recommendation 4. Integrate specialized functions, such as CEQA review, that play a critical role in project delivery and integrate them into the District’s project delivery approach and identify procedural changes and methods of centralization that lead to greater consistency and efficiencies Another area ripe for this type of centralization and specialization is contract administration for certain functions such as trail and staging area construction, habitat restoration, etc. Project Management Systems and Tools The District’s work plan efforts have been described as aspirational, with general agreement that staff incorporate more projects into their annual work plans than can be successfully managed with current resources. Changing the current District project management dynamic will require a focus on retooling certain aspects of the organization’s culture and also institutionalizing new practices for developing project budgets and work plans and holding staff accountable to project milestones. Staff reported that each employee relies on their own approach to managing a project. This leads to inconsistent project management and 21 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners delivery in the organization. It also makes internal accountability unrealistic and reduces the likelihood of timely project delivery. Elements of successful project management structures include: defined project scope, timeline and milestones, project participants, clearly defined roles and responsibilities, identification of anticipated barriers or challenges along with corresponding strategies to overcome them, and a mechanism to alert team members when the project veers off course to allow for timely problem solving and course correction. Lack of project management tools and systems severely impact Measure AA planning, accountability and decision making at both the administrative and policy levels. Currently, the District’s project budgets and action plans are recorded, stored, and monitored differently across the organization. Many managers are leading projects without clear and measureable milestones to which they are held accountable and without a clear understanding of the resources necessary to carry out the work. Comprehensive and integrated project management tools understood and accessible across the organization will provide the platform from which information, decision-making, and accountability will flow. Without such tools, projects will continue to lack a formal project structure that would otherwise ensure on-time/under-budget project completion. Currently, project budgets that are assembled to inform work planning do not accurately or consistently account for the total cost of project delivery, including staff time and indirect costs associated with administrative support functions and organizational overhead. Without documented direct and indirect costs, it is impossible to create a prioritized work plan that realistically considers the capacity of existing staff and the availability of organizational resources. The lack of an organization-wide uniform project management system also diminishes the ability for individuals and different groups across the organization to review, monitor, and document project budgets and action plans. This has a negative effect on the organization in a number of ways. Without a project management system, many managers are leading projects without a detailed project schedule that includes measureable milestones to which they are accountable, and without a clear understanding of the resources necessary to get the work done. The District is currently looking at Projector as a project management tool to integrate with the finance and accounting system, New World System. As the organization expands its workload and it becomes necessary to more frequently report on the status of projects, more uniformity in project 22 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners management will create efficiencies within the organization and work groups or individual staff members will no longer have to look for their own solution. Recommendation 5. Complete a comprehensive requirements analysis and establish a plan to procure and implement a uniform Project Management System. The District is currently evaluating the implementation of a project management system to improve management and reporting of project schedules, budgets, milestone, etc. The District should ensure that clear requirements exist and vendor solutions are accurately mapped against those requirements. The system should incorporate agreed- upon formal project planning elements such as the creation of a documented project purpose and scope, resource requirements, timeline, success criteria, etc. Recommendation 6. Develop a consistent format for project budgets using a procured project management system that informs work planning and accounts for the total cost of project delivery, including staff time and indirect costs associated with administrative support functions and organizational overhead. Increasing Staff Capacity through Contractors The increase in the number of District projects over the next several decades will require more people and additional expertise, both of which can be made available to the District if it solicits qualified contractors who can assist in the short and long term. Adding to short-term staff capacity by developing an ongoing list of qualified contracts, including planning, engineering, construction, and project delivery firms, is considered a best practice and should be pursued immediately. This is particularly essential as the number and variety of capital improvement projects expands as Measure AA funding is made available. Recommendation 7. Expand the list of pre-approved, on-call consultants and contractors that can be available to support the District in its planning, engineering, construction, and project delivery functions. An expanded list that includes services beyond the current available on-call list of biological and hazardous materials experts will give the District greater flexibility and through-put by having a ready team of outside experts 23 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners available to support all aspects of project delivery and remain in compliance with District policy and state law regarding contractor selection processes. Board approval of an on-call list of experts for not-to-exceed contract amounts will streamline the hiring process and allow staff to quickly retain the necessary services as needs arise. Recommendation 8. Review current contracting/bidding policies/practices to identify opportunities to streamline these policies/practices. Building a Dependable Engineering/Construction Management Function The 2014 Vision Plan calls for an increase in the number of projects that will involve engineering and construction services. Creating a professional, on-staff engineering capability and increasing the existing construction project management capability would allow the District to efficiently and effectively oversee and manage such projects. As the District focuses more on project delivery, the need for in-house engineering and construction management staff capacity will grow. More specifically, the planning function should not be burdened with the responsibility of overseeing the execution of projects. An engineering and construction unit, with expertise in project delivery, should be responsible for design and construction. Such a transition will require not only additional staff but a restructuring of the organization as well. Recommendation 9. Create an Engineering and Construction Department and hire an Engineering and Construction Manager to oversee the following project delivery functions: design, permitting and engineering; construction management; and Measure AA project delivery oversight. This department will report to the Assistant General Manager for Project Planning and Delivery. Initially, staffing would be minimal as the Engineering and Construction Manager would manage a small team of project managers and be responsible for managing consultant project managers/inspectors. Cultivating Collaboration and Partnerships The District has been challenged to meet project timelines due to lengthy reviews by outside permitting agencies. A number of projects that will be implemented as part of Measure AA will require a strong partnership 24 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners with agencies that provide additional regulatory review such as San Mateo County. A more careful consideration of the time it takes to complete the permitting process should be taken into account when formulating project budgets. Recommendation 10. Meet with local jurisdictions to discuss opportunities to improve the permit processing time associated with certain types of permits. Land and Property Acquisition The project planning and delivery process often begins with the acquisition of land. The success of the Vision Plan as funded by Measure AA depends partly on the District’s ability to identify and acquire new land and property. This work is important and time consuming, and requires a deliberate approach with criteria and strategies that guide and inform the process. Land acquisition is becoming more complicated and difficult to manage as time passes. Newly acquired assets are less pristine, with structures that need rehabilitation or demolition, remediation to resolve contamination issues, tenants that need services and monitoring, along with natural resource management needs. Such purchases require more staff time in the pre-purchasing period as well as additional site evaluations prior to purchase. Measure AA will require a strategic focus on land acquisition, despite these challenges. Over the past six years, Real Property staff have assisted with District- wide projects including the Strategic Plan, Vision Plan and Measure AA. These efforts have left the small acquisitions team with less capacity to pursue strategic land purchases. With the results of these planning efforts now in place, the time is right to establish additional guidance beyond the Vision Plan priorities to further inform the land acquisition strategy and to better assess the long term management and maintenance requirements, costs, and potential liabilities that may accompany new purchases (i.e., existing tenants/uses, condition of property improvements, known contaminants) to further inform the decision making process. The design of a property acquisition plan provides a strategic framework with defined policies and goals. 25 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 11. Create a Property Acquisitions Plan that clearly communicates District acquisition policies and goals that provides a road map for strategic land acquisition. The Plan should reflect the Board-approved Vision Plan priorities and communicate internal processes and a system for assessing short-term and long-term maintenance and management requirements, costs, and potential liabilities for new properties. The Real Property department currently has responsibility for managing leases and tenants as a result of acquisition efforts. The District maintains lease agreements for residential homes, horse stable operations, wineries, communication towers, agricultural property, and grazing. This responsibility is time-intensive and pulls Real Property staff from proactive acquisition efforts. Operations staff is often involved in supporting this work. Operations staff is responsible for responding to work order requests that involve maintenance of leased land and buildings, securing properties, monitoring tenant compliance with lease terms in the field, and alerting both the tenant and the Real Property group when violations are observed. Based on how the District delivers property management services, relocating this function will promote better alignment. Bringing all District staff involved in management and day to day operations of the lease agreements will improve information flow, problem solving, and service delivery. Moving responsibility for ongoing property management activities to a new Land and Field Services Department where the responsibility for facilities resides will free up staff time for this purpose. Recommendation 12. Restructure the Real Property function to focus on land and property acquisition, and move the property management function to a Facilities division in the new Land and Field Services Department. This shift will allow Real Property staff to focus more specifically on pre-acquisition assessments, strategic acquisition, and the development of appropriate lease agreements, and Land and Field Services will monitor lease agreements and work with the rest of the operations team to ensure District assets are well maintained and cared for. 26 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Operations As the District transitions from an organization focused on land preservation to one with a balanced mission directed toward preservation, restoration, and public access, it will need to reconsider how it manages and deploys its operational resources. A preserve that is open to the public, for example, will absorb more staff capacity in terms of maintenance and patrol functions than one that is closed to the public. The District must plan for this as it begins opening more of its closed preserves for public access. Moreover, the expanded Measure AA capital improvement program will exert tremendous pressure on both District rangers and maintenance staff as the number of assets to patrol and maintain grow over the next 30 years. Such an expansion in existing workload will require a restructuring of current operations, a modernization of how workload is managed and monitored, a reassessment of how resources are deployed, and a careful consideration of how facilities ought to expand. District Growth Over the Last Ten Years The District’s expansion over the last ten years has been impressive. As indicated in Figure 5, acres closed to the public have expanded from 16,787 in 2004 to 29,479 in 2014, while the number of acres open to the public have remained relatively constant during the same period. In fact, nearly all expansion over the last ten years has been driven by the acquisition of lands that remain closed to the public. This rapid growth in closed preserves reflected the District’s primary focus on land preservation. 27 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Figure 5. Ten-year History of District Acreage by Type Source: Midpeninsula Regional Open Space District Operations Department. Figure 6 presents a ten-year history of staffing levels within the Operations department by type of staff. The numbers of both patrol staff and maintenance staff have been steadily rising over the last ten years. As Measure AA is implemented and more preserves are opened for public access, the District must strategically invest in operational staffing resources in the long term (see section on Staffing Projections). How the district should approach this investment, what factors it should consider when developing new positions, and how it should structure the work of these employees, is explored throughout this section of the report. Figure 6. Ten-Year History of Operations Staffing Levels Source: Midpeninsula Regional Open Space District Operations Department. 27,148 27,154 27,182 27,185 27,186 27,291 27,574 27,591 27,591 27,59127,591 16,787 17,939 22,333 23,177 24,559 25,478 26,445 27,196 27,739 29,47929,479 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Ac r e s Open Acres Closed Acres 26.3 27.8 28.8 30.8 30.8 30.8 30.8 30.8 30.8 31.3 33.3 19.0 21.0 22.0 22.0 22.0 23.0 23.0 23.0 25.0 25.0 25.0 10 15 20 25 30 35 FY 2004- 05 FY 2005- 06 FY 2006- 07 FY 2007- 08 FY 2008- 09 FY 2009- 10 FY 2010- 11 FY 2011- 12 FY 2012- 13 FY 2013- 14 FY 2014- 15 Fu l l T i m e E q u i v a l e n t ( F T E ) E m p l o y e e s Maintenance Staff (FTEs)Patrol Staff (FTEs) 28 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Determining Operational Staffing Needs Existing Operational Staffing. Existing operational staff, including rangers and maintenance employees, has gradually increased over the last decade at pace with the expansion of the District’s managed land assets. Figure 7 shows operational staffing levels compared to total acres and Figure 8 shows operational staffing levels compared to total trail miles. Based on these figures, the District operations staffing history indicates that ranger and maintenance staffing is generally keeping pace with workload demands; however, increases in special projects and/or other assignments like public outreach and events can stretch staffing thin. Figure 7. Acres of District Land per Operations FTE Source: Midpeninsula Regional Open Space District Operations Department. 1,808 1,748 1,839 1,747 1,795 1,825 1,862 1,884 1,948 1,927 1,815 2,503 2,314 2,408 2,446 2,512 2,443 2,493 2,523 2,399 2,412 2,418 965 920 949 931 956 956 975 987 971 953 926 0 500 1,000 1,500 2,000 2,500 3,000 FY 2004- 05 FY 2005- 06 FY 2006- 07 FY 2007- 08 FY 2008- 09 FY 2009- 10 FY 2010- 11 FY 2011- 12 FY 2012- 13 FY 2013- 14 FY 2014- 15 Nu m b e r o f A c r e s p e r F T E Maintenance Staff per Acre Patrol Staff per Acre Total Operational Staff per Acre 29 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Figure 8. Miles of District Trails per Operations FTE Source: Midpeninsula Regional Open Space District Operations Department. The appropriate staffing levels for the maintenance and ranger functions is challenging to determine based on the District’s own history because Operations has not consistently measured its workload to gauge how well staff are keeping up with demands and how quickly they are completing assigned tasks. Measuring workload beyond simple indicators such as land acreage and trail miles requires a capable work order management system and systematic documentation of the patrol function, both of which are lacking in the District (See Recommendation 17). Peer Staffing Analysis The District hoped that a peer agency analysis would help develop indicators to guide appropriate operational staffing as the District expands, but each peer has very different operational realities that make such indicators difficult to establish. For example, Table 1 and Figure 9 show that the District is relatively unique in its ratio of publically accessible acreage compared to non-publically accessible acreage. The degree to which an acre of land will require regular patrolling or maintenance is dependent on its usage and the types of facilities and equipment it houses. 12.3 11.8 11.6 10.8 12.1 12.2 12.4 12.6 12.3 12.3 11.6 17.1 15.6 15.2 15.2 16.9 16.3 16.6 16.9 15.2 15.4 15.4 6.6 6.2 6.0 5.8 6.4 6.4 6.5 6.6 6.1 6.1 5.9 0 5 10 15 20 FY 2004- 05 FY 2005- 06 FY 2006- 07 FY 2007- 08 FY 2008- 09 FY 2009- 10 FY 2010- 11 FY 2011- 12 FY 2012- 13 FY 2013- 14 FY 2014- 15 Tr a i l M i l e s p e r F T E Maintenance Staff per Trail Mile Patrol Staff per Trail Mile Total Operational Staff per Trail Mile 30 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Acres of Owned and Managed Lands Midpeninsula Regional Open Space District East Bay Regional Park District Santa Clara County Parks and Recreation Department Marin County Parks Boulder County Parks and Open Space Jefferson County Open Space and Parks Publically Accessible 28,925 114,000 42,372 15,572 35,138 53,051 Not Publically Accessible 31,682 32,349 6,889 3,940 64,165 700 Source: As reported by each agency. Figure 9. Percentage of Publically Accessible Land Source: As reported by each agency. A peer comparison of ranger staff is also complicated by the fact that organizations have rangers perform different sets of responsibilities, making straightforward benchmarks challenging to identify. As noted in Table 2, it is common within the District’s peer organizations to have rangers perform duties associated with patrol, emergency response, and enforcement. The degree to which rangers also perform maintenance responsibilities (trail, park and facilities maintenance), or interpretive responsibilities (educational programming, visitor services), however, varies from peer to peer. More specifically, the District’s rangers have fewer responsibilities compared to their peers with regard to maintenance and interpretative duties. 47.7% 77.9%86.0%79.8% 35.4% 98.7% 75.6% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% Midpeninsula Regional Open Space District East Bay Regional Park District Santa Clara County Parks and Recreations Department Marin County Parks Boulder County Parks and Open Space Jefferson County Open Space and Parks % of Publically Accessible Land Peer Average 31 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Peer Comparison of Ranger Staffing Levels and Responsibilities Midpeninsula Regional Open Space District East Bay Regional Park District Santa Clara County Parks and Recreation Department Marin County Parks Boulder County Parks and Open Space Jefferson County Open Space and Parks # FTEs 24 2561 49 292 14 113 Patrol4 Yes Unavailable Yes Yes Yes Yes Emergency Yes Unavailable Yes Yes Yes Yes Enforcement Yes Unavailable Yes Yes Yes Yes Maintenance Low Unavailable Low High5 Low Medium6 Interpretive Low Unavailable High High High High Source: As reported by each agency. Note: “Low” indicates tasks are performed as needed. “Medium” indicates there is an expectation to perform the task on a regular basis. “High” indicates an integral part of their function. 1 This number includes 90 FTEs in the police department. 2There are 13 rangers for Open Space division and 16 rangers for the Parks division. 3 This number does not include 2 seasonal rangers. 4 Patrol of non-publically accessible spaces varies depending on the agency. Boulder County has scheduled check-ins for its closed lands. However, its 37,296 acres of easements are monitored by volunteers. Marin County’s easements are also monitored by volunteers. Jefferson and Santa Clara County’s closed lands are patrolled at the discretion of the rangers. 5 Two rangers in the Open Space division are assigned to construction. Parks rangers are expected to perform regular ground maintenance. 6 The rangers collectively perform maintenance duties as needed, but 5 of the rangers are expected to perform regular maintenance. The District has had a relatively small portion of its land open to the public and has outsourced interpretive functions to docents. As Measure AA and other capital projects are implemented, more District acreage will be open to the public which will present additional expectations for interpretive programs. As outreach programs attract users and programming grows, visitor service resources including naturalists and interpretive staff will increase. Looking at peer organizations like Jefferson County Open Space and Parks, the most natural place for docent and volunteer program responsibilities to fall is aligned with the ranger function, who will be more involved in front line service delivery activities that include public safety, education, and interpretive services. Joining the public facing functions of volunteer and docent programs with rangers (patrol) brings like services together in alignment and leads to improved performance of growing educational services planned by the District. This new unit will be positioned to meet the challenge of increased access and public use of the preserves and equipped to respond to their demands. 32 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 13. Establish a “visitor services” function of the organization to provide public facing services and activities. Restructure the organization to align docents, volunteers, and rangers to meet the array of visitor services. The other major division of the Operations department is maintenance. Maintenance staff are charged with the maintenance and upkeep of the District’s assets. This includes trails, facilities, and other assets. This purpose is distinctly different from the mission of visitor services. Further, the current structure of operations does not provide the opportunity for maintenance staff to advance to leadership positions in the department. Current practices dictate that to be a superintendent of operations you must also be a peace officer with specific classification and licensing. Although an Operations Manager currently oversees maintenance and patrol, as it grows, the District will require additional supervision of this group. As new preserves and public assets become available through the implementation of the District’s vision plan, both maintenance and patrol will experience significant increases in staffing. The formation of discrete organizational units reporting to a single Assistant General Manager provides the District capacity to grow in both size and skills (i.e., field maintenance, facilities maintenance, trails and construction) and to strengthen the management practices for each. Recommendation 14. Separate the patrol and maintenance functions into two distinct organizational units, Visitor Services (for patrol staff) and Land and Facilities Services (for maintenance staff). Recommendation 15. Create Manager-level positions to lead the Visitor Services and Land and Facilities Services groups. Having the maintenance function supervised by a different manager will give it a greater voice, level of authority, leadership, and strategic role within the agency as well as provide maintenance staff greater opportunity to advance into leadership positions. Policy to Guide Operational Staffing The District lacks a policy framework to estimate long term operating costs that address staffing needs or expanding the number and variety of service contracts to align staffing and workload responsibilities. This 33 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners policy framework is different from the internal project delivery work flow system also referred to as the project delivery conveyor belt. The former aids in long term policy-level decision making and the later provides operating-level details about the steps and hand-offs necessary to deliver a project. Measure AA will have a long-term effect on the District that will significantly increase patrol and maintenance responsibilities associated with its growing assets over the next three decades. In order to prepare for this in advance, the District would be wise to establish a long term operating cost framework that contemplates staffing adjustments into a project vetting process and is regularly reviewed by the Board. An example of this is the Pipeline program developed and instituted in the East Bay Regional Park District (EBRPD), as described in Figure 10. Figure 10. East Bay Regional Park District Pipeline Program Description of EBRPD Pipeline Program In order to ensure ongoing financial sustainability, EBRPD has developed its “Pipeline” program to carefully forecast future operating costs to ensure that the district can support its modest but active efforts to acquire and develop new park assets in the long term. In addition to listing the potential funding source for each active project in the active capital improvement plan (CIP) project schedule, the pipeline program requires that staff develop estimates for: 1. Start-up costs – estimated costs for vehicles, office, or maintenance equipment necessary to purchase at completion of project 2. Personnel requirements – estimated number of full-time equivalent (FTE) employees required to support assets upon completion of project, including a combination of Operations, Public Safety, and Maintenance employees. 3. Total wages – estimated annual salary cost to be incorporated into base-budget appropriations 4. Total base supplies and services – estimated cost associated with maintenance of new facility on an ongoing basis to be incorporated into the base-budget appropriations 5. Revenue – estimated new revenue to be collected from assets, if significant Adding pipeline estimates to the CIP project schedule allows the Board to consider future land acquisitions and development projects in relation to their anticipated long-term effect on the organization. Pipeline 34 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners projects are only identified as priorities for funding when financial capacity is available and the project is considered in the context of all budget requests. As part of its annual budget, EBRPD performs a five- year forecast that integrates pipeline estimates for each active capital improvement project, making the forecast much more realistic. As the District scales up its operation, it would be wise to build policy around how to ensure that future land acquisitions and development projects are undertaken with long-term organizational sustainability in mind. Recommendation 16. Develop guiding policy similar to the East Bay Regional Park District Pipeline Program that requires District staff to develop estimates for start- up costs as well as ongoing maintenance, safety, and staffing costs for each development project or future land acquisition before the Board commits to the project or purchase. Modernizing How Workload is Managed In absence of a capable work order management system and reliable workload and performance indicators, operational decision-making has not been informed by reliable data. In preparation for Measure AA implementation, the Operations Department collected over 15 years of data on its staffing levels (full-time equivalent positions or FTEs) and evolving workload (land acres and trail miles by type). Additional information was consolidated around preserve visitation, patrol patterns, maintenance responsibilities, and enforcement incidents. This information was only recently made available to the District and could be very valuable from a management perspective if collected and monitored regularly. A computerized work order management system would not only produce reliable data, but it could help guide staff deployment and effectively prioritize competing projects. Staff indicated that priorities are unclear and the District lacks a system for forecast work over 30-, 60-, or 90-day periods. Currently, the Skyline team uses a white board to map out two weeks’ worth of work on a regular basis, a practice that staff appreciates yet does not produce a record of the work that has been accomplished. 35 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 17. Purchase and implement a computerized maintenance management system (CMMS) and provide training on its use. The remote nature of preserves makes it challenging to secure technology that provides for field staff communication and project tracking. The District was testing mobile laptops for use in the field when interviews were conducted, but sporadic connectivity issues were generating skepticism among staff of the utility of such an investment. Recommendation 18. Explore new reliable communication technology (i.e., email, voice and visual systems, tough books) to ensure field staff have the information and tools to effectively perform their job responsibilities. Operations Staff Deployment The District has relied on contractors to perform a range of operational roles and responsibilities involving both routine maintenance and capital improvement projects. More specifically, the District frequently relies on contractors to perform road maintenance (potholes, sweeping, paving, and repairs), fleet maintenance, sign construction, parking lot and restroom construction, environmental reviews, and some trail construction. Conversely, the District has frequently relied on its operational staff to implement certain types of special projects which most typically involve the construction or refurbishment of District trails. These special projects invariably divert the attention of maintenance staff away from scheduled maintenance responsibilities and habitat restoration. Figure 11 shows that maintenance staff estimate that 40% of total crew hours for FY 2013-14 has been dedicated to capital projects, including the construction of trails and roads. 36 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Figure 11. Maintenance Crew Hours by Responsibility Type for FY 2013-14 Source: Midpeninsula Regional Open Space District Operations Department. Assigning maintenance staff to these special projects reduces the number of full-time equivalent (FTE) employees who are actively managing the existing trail networks and attending to maintenance work orders. As a result, deferred maintenance is growing, trail maintenance schedules are falling behind, and the maintenance backlog has continued to grow despite recent increases in maintenance staffing levels. Moreover, having operational staff frequently brought into special projects also makes traditional efficiency measures (the number of trail miles managed per FTE and the number of acres maintained per FTE) less meaningful and difficult to benchmark across other agencies. Recommendation 19. Establish a special projects/construction team that is dedicated to the delivery of special projects like trails construction. This team can be staffed on a rotational basis to allow a greater number of maintenance staff the opportunity to work on special projects and will increase maintenance capacity for routine maintenance work. Recommendation 20. Explore opportunities to partner with the private sector to provide existing staff with the capacity to address maintenance backlogs and deferred maintenance. Specifically, the District should explore the potential to outsource the following tasks: road and parking lot resurfacing (i.e., least complex in nature); brushing work around existing buildings; maintenance of Capital projects (construction of trails and roads), 11,840, 40% Facilities maintenance, 3,236, 11% Habitat restoration, 3,281, 11%Trail and preserve maintenance (brushing trails and vegetation clearing), 10,989, 38% 37 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners existing buildings (i.e., painting district offices); tall tree trimming and maintenance (e.g., requiring a bucket truck); vehicle maintenance; and water system maintenance. It is worth noting that having habitat restoration as an important goal of the District complicates trail construction as it requires that workers building trails have the knowledge to identify non-native species and carry out the appropriate eradication techniques. In order to ensure habitat restoration is kept in mind as a goal during trail construction, the District has relied on its own staff to construct and refurbish trails on a fairly regular basis. Throughout interviews, employees commented on the high-quality work that District maintenance crews have carried out with regard to habitat restoration and trail construction. A number of employees also noted that contractors who have been hired to build trails for the District have not delivered services of the same quality as District staff members. Recommendation 21. Develop a field staff onboarding/ training program that outlines the variety of details and standards used for trails construction and maintenance work throughout the District. Ranger Deployment District rangers do not follow a routinized patrol schedule, but travel freely from preserve to preserve, visiting high visitation preserves more frequently than preserves with fewer visitors. Rangers are expected to maintain a log of their patrols which are reported to supervisors regularly. In terms of planning patrol routes ahead of time, intuition and experience are the primarily tools relied upon to direct rangers, both of which are difficult to institutionalize and are vulnerable in the face of staff turnover. District rangers have a good relationship with local police departments. Because District rangers do not carry firearms, having service agreements in place is an additional measure that could be explored to better ensure the safety of preserve visitors as more sites are opened to the public. Recommendation 22. Maintain effective working relationships with local police and fire departments and as the District expands periodically evaluate automatic aid protocols and response. The Operations Department expects a number of retirements, which could create an issue with regard to operational staff capacity if the 38 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners District is not proactive in its recruitment efforts. Because ranger staff does not rely on temporary or seasonal workers to back-fill staff shortages, a few retirements could have a large effect on the District’s enforcement capacity in the short term. Given that it takes approximately six months to recruit a ranger and six additional months to have the new staff member fully trained, the District should consider planning for this as soon as possible. Recommendation 23. Develop a seasonal employment program for patrol work. The program should support increased project and visitor demands during the busiest months and provide for succession planning to build knowledge and capacity as position vacancies occur over time. Natural Resources Support to the District The Natural Resources function is involved in all facets of District services and projects. Based on our analysis, this function falls within the Operations business line or service area given the field orientation of much of the department’s work. It is poised, within the current structure, to adapt to near and long term growth projections. However, to ensure that it contains the full array of expertise to support the project work plan and inform District conservation and restoration policies, it will be necessary to evaluate position descriptions to ensure the District has the appropriate staffing classifications. Recommendation 24. Complete a Natural Resources Position Classification Study to ensure appropriate staffing types and levels are in place and recruited for in the future. (Underway) Lands leased to grazing tenants now total over 11,000 acres, or nearly a sixth of the District’s total land acreage. These are lands that have been added over the last 10 years and represent a significant shift in District land management. The District’s purchase and management of rangeland properties has outpaced the capacity of the Rangeland Ecologist and Real Property Specialist positions to manage and restore these properties while also working with the District’s grazing tenants to manage their grazing operations. The creation of the Land and Facilities Department, comprised of the maintenance functions currently housed in the Operations department along with the lease and rental management function of the Real Property 39 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners department, will allow the District to incorporate these working landscapes into the maintenance operations of the District, using the technical expertise of the Rangeland Ecologist position from the Natural Resources Department to support land management and maintenance decisions. Recommendation 25. Expand grazing property management as a function of the new Land and Facilities Management department Field Office Challenges The District has two field offices that structurally mirror one another in terms of their staffing levels and operational resources but do not take advantage of economies of scale and could improve their resource sharing. Each field office has its own maintenance and patrol staff and operate independently from one another. In fact, in many cases the field offices have each developed their own home-grown solutions to operational problems such as the lack of a District-wide work order management system. The result has been creating systems or processes that are not compatible and can sometimes be duplicative. There also exists, to some degree, a reluctance to share equipment between the two field offices. This may lead to an overinvestment in the District’s fleet and equipment. These inefficiencies are structurally embedded within the organization due to the organizational separation of the two field offices. Greater efficiencies can be achieved by organizing staff by work function, rather than location. Recommendation 26. Create crews that focus on specific work functions and incorporate a rotational program that allows for continued professional growth and development of staff. Areas of expertise include resource/pesticide management, trails and patrol, visitor programs, etc. Assigning staff to specific work functions will also allow them to deepen their knowledge in a given area and work more productively as they gain more experience. Planning for Facilities to Meet Operations Staff Expansion Within the next several years, the District will need to reevaluate its utilization of its existing facilities and develop a plan for expansion that will likely include the opening of additional office space for project delivery and administrative staff as well as additional field offices or 40 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners outposts. While planning for this expansion, it will be important to re- consider where staff is located to try and reduce the amount of time that is spent going to and from destinations as acreage continues to increase. Recommendation 27. Complete a facilities needs study to determine mid and long term field facility needs and investigate alternate maintenance facilities to accommodate future growth. Maintenance and upkeep of District facilities that house agency staff and equipment are a functional responsibility of Operations. With the anticipated growth in facilities, the function needs to be developed to meet the growing number of facilities and corresponding maintenance that will be required. Developing a Facilities division or unit within Operations provides this focus. And, as discussed in the Land and Property Acquisition portion of this report, as the property management function for District acquired land is relocated to Operations, the organization’s resources will be maximized by housing facilities maintenance and the property management function within the same unit. Further, to deliver efficient and effective services, high performing facilities management systems depend on the development and maintenance of resources like facilities inventories, facilities maintenance schedules, and multi-year facilities improvement plans. These tools inform staff work plans, budgets, and long term financial plans. The District would benefit from creating and maintaining these tools. Recommendation 28. Consolidate facility maintenance/property management into the Land and Facilities group. Recommendation 29. Create a facilities maintenance and improvement plan to guide work plans and inform financial decision making. Management Support and Systems Over the next three decades, the District anticipates its preserved land will expand to 100,000 acres with over 400 miles of trails. To manage this expansion and also begin opening a greater portion of its acres and trails to the public, the District will need to scale up its operations, and expand its facilities to make room for new personnel. Supporting this significantly larger workforce will require a considerable investment in 41 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners the District’s management and information systems. This investment will include a modernization of the District’s approach to information technology (IT), financial management, human resource management, facility management, and document management. The vision tied to Measure AA cannot be implemented unless these support functions, and the management and information systems that support them, are in place. Moreover, the efficiency and productivity of these support functions have a direct bearing on the District’s ability to keep pace with Measure AA’s implementation schedule. After all, in order to construct a staging area or open new trails, the District must have a well-trained and qualified workforce, audited financial statements, appropriate systems in place to support cost accounting and grant reporting, policies and procedures to govern contract relationships and purchasing decisions, appropriate IT systems for monitoring project expenditures, and much more. In addition to strong internal support functions, a sustainable and scalable organization also depends on clear leadership and direction from the General Manager’s office. Organizational functions such as real property, planning, natural resources, project delivery, patrol, maintenance, and property management all require a corporate support system that sheds light on organizational priorities (through executive leadership and management) as well as the foundational tools and support of internal support functions (such as accounting, human resources, and information technology). Aligning internal support functions, such as human resources, finance, purchasing, information technology, and GIS requires shifting internal reporting relationships to support and keep pace with organizational needs. Having these operations centralized into a single administrative unit will build capacity within the organization and create economies of scale. In this section, Management Partners reviews the systems and alignment of these critical functions as they relate to the anticipated growth and corporate support needs of the organization. Peer Comparison Table 3 compares the District’s internal support staffing profile with peer agencies. The table suggests that the District’s finance function is understaffed, particularly considering that County-supported park systems can often rely on centralized finance personnel in addition to the finance staff they have internal to their own Department. Even those park systems with centralized, County-wide finance support have a more robust finance operation internal to their departments as compared to the District. 42 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Internal Support Staffing Among Peer Organizations Midpeninsula Regional Open Space District East Bay Regional Park District Santa Clara County Parks and Recreation Department Marin County Parks Boulder County Parks and Open Space Jefferson County Open Space and Parks Information Services 21 7 1, with county support 7, with county support 1, with County Support 1, with County Support Human Resources 5.0 15.3 3, with county support 1, with County Support 1, with County Support Finance 3.32 18.3 6, with county support 6, with County Support Public Affairs 11.0 20.2 1 23 12, with County Support 3.5 Source: As reported by each agency. 1 This number includes IT Administrator and IT Technician of the administrative services division. 2This number includes Controller, Accountant, Accounting Technician, and Sr. Accounting Technician. 3 This number is projected to change to 4. Financial Management On July 1, 2012 the District implemented an enterprise resource planning software (ERP) to provide the District with an integrated platform for financial and human resources management. As with any ERP system, there was a major change in business processes, as well as the fact that a large number of staff were required to become proficient in its use. The District has made large strides in its adaptation to use the system and continues its efforts to improve and streamline business processes. In that regard, the 2014 Management Letter prepared by the external auditor proffered several suggestions for further improvement in areas of fund accounting, grant management and project accounting. During the 2014- 2015 fiscal year, the District has made the recommended changes to its fund accounting and has also set up a project numbering structure to facilitate reporting of Measure AA expenditures. Also, the District has undertaken a review of its chart of accounts to provide improved cost accounting of its projects. 43 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 30. Document the business and technology requirements for an integrated budget and cost accounting system that enables the District to perform 1) general ledger and fund accounting; 2) project accounting; 3) grant billing and reconciliation; and 4) grant documentation and organization. Each of these functionalities were identified as recommended changes in the findings from the 2014 Audit Letter and are critical to the success of Measure AA implementation and reporting. Implementing the above recommendation and supporting the District in setting up the systems necessary to report Measure AA expenditures will require the full-time leadership of a finance professional well-versed in public accounting best practices. The part-time Controller position does not provide the necessary support for a rapidly growing organization. Recommendation 31. Create a Chief Financial Officer (CFO)/Director of Administrative Services executive level position responsible for the realigned administrative services functions to provide financial and other administrative services expertise and leadership in these areas within the organization. Recommendation 32. Develop a transition plan to shift financial responsibility and management for the District, including managing the Controller’s fiscal model, from the part-time Controller to the new CFO/Director of Administrative Services. Typically, a Board-appointed District Controller performs a financial oversight function but does not provide direct supervision over finance and accounting staff. The District has invested significant time and cost in implementing the New World Systems financial software. This software platform provides a solid foundation for the District’s financial system and should be viewed as a long-term solution. To this end, the District should remain at or near the most current release of the software, invest in ongoing staff training, and attend annual user conferences. In addition, the District should continue to explore opportunities to further leverage the New World Systems software. As an example, the District is currently migrating fixed assets into this software system. There are likely other opportunities to streamline or replace offline systems by improving the use of the New World Systems financial software. 44 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 33. Maintain the New World Systems financial software at or near the current release and continue to leverage the system to its full potential. The ability to leverage the system will likely require an investment in finance and IT staff training and will be addressed in the District Information Systems and Technology plan to be developed in the summer/fall 2015. The District recently updated its financial policies that guide its overall strategy in planning for a sustainable future. In November 2014, the District adopted a Fund Balance Policy in Accordance with GASB Statement No. 54 to identify the required components of fund balance, the level of management authorized to approve or change target balances in each fund, the amounts that the District will strive to maintain in each fund, and the conditions under which fund balances may be spent, reimbursed, and reviewed. In December 2014, the District adopted revisions to its Capital Expenditures and Depreciable Fixed Assets policy. Continuing to track, and update as necessary, financial management policies and procedures is a significant best practice. Recommendation 34. Review, update, or develop financial management policies and procedures to enable appropriate, accountable, and fiscally sound decisions at the lowest possible level within the organization. Purchasing An organization’s purchasing function can bolster staff capacity or absorb it. A helpful and supportive purchasing function requires focus, structure, and processes. Currently, the District is supported by a decentralized purchasing function with a very limited set of policies to guide staff in their purchasing decisions. Centralizing the function within the Finance Division will provide accountability and the system support structure necessary to position the organization for success. Recommendation 35. Centralize the purchasing function within the Finance and Administrative Services Department. The Finance division should build a requisition system, identify opportunities to aggregate purchases to gain economies of scales, and develop the ability to analyze trends to ensure effective use of resources. 45 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Information Technology and Systems While existing IT systems appear to be meeting basic business and operational needs, the District’s IT function has not been managed strategically. Consequently, the District has assembled a number of standalone access systems over the years, including a contract database, a training database, and a permits database. However, no single division or manager is responsible for ensuring these resources are adequately maintained, accessible, and non-duplicative. The use of multiple systems, including both commercial-off-the-shelf and in-house developed applications, inhibits information access and sharing. Moreover, these relatively isolated technology solutions and non-integrated databases significantly impact staff and organizational efficiency. To obtain the benefits from technology that many peer agencies are enjoying, the District needs to make technology planning, implementation, and support a priority. The current informal approach to technology planning and management treats information technology as a “back office” function instead of a strategic one. Day to day technology management activities are left to the IT Administrator, with limited guidance and input from departments or management. Existing staff are at capacity responding to daily information technology needs and are unable to dedicate time to developing strategic goals or improvement projects. As a result, existing and planned technology projects are not being executed within a formal and accountable structure necessary to actually achieve results. A Technology Strategic Plan would provide the District with a guide for how technology will be planned, procured, implemented, and managed. Recommendation 36. Develop and implement a Technology Strategic Plan to provide a roadmap for the District’s short and long term implementation and management of technology. The Plan should focus heavily on core systems (cost accounting, payroll, human resource, project management, and document management) including those on the critical path to support Measure AA. It should also establish the foundation for a highly integrated environment where systems have automated interfaces to share information without staff intervention. In order to develop a successful Technology Plan, the District must allow for an objective evaluation of the existing technical infrastructure, applications, and technology service delivery capabilities. 46 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners In addition, it must allow department stakeholders to have a voice in the plan and in the prioritization of the projects within the Plan. (Note: the District has already drafted a request for proposals (RFP) to solicit a consulting firm to develop a Technology Strategic Plan). Management and information technology systems improvements have been inconsistently valued or championed by the organization’s leadership which inhibits initiative and real progress in meeting critical system needs. A united, consistent, and visible voice regarding the strategically critical need for good management and information technology systems across the organization will be required for the aggressive action needed to address these needs. Recommendation 37. Implement an IT governance structure that promotes effective planning, priority setting, and accountability of District technology resources (staff, funding, hardware and software) with business priorities. For example, for each technology project, the District should identify the operational or business leader ultimately responsible for the use of the technology and success of the technology projects. This approach ensures the involvement of user department staff in project planning, implementation, and ongoing management. The existing Information Technology (IT) Services Group consists of an IT Administrator, IT Technician, and a part-time IT Intern. Over the past few years, it has become more challenging for IT to provide quality support and deliverables to the District as staffing increases and technology needs mature. With day-to-day operations that demand immediate attention, IT staff are often unable to proactively plan and work on extended projects that would ensure application of best practices that are common to other businesses and government agencies. When considering the upcoming technology procurements and implementation needed to support a much larger District workforce, it becomes clear that additional IT leadership and support staff are needed. Moreover, the District should recognize that as more technology is implemented, and the overall reliance on technology increases, the IT budget will likely need to increase in order to support ongoing operations and maintenance. If technology is implemented correctly, the increase in District-wide staff efficiency and effectiveness should offset the cost of the technology. 47 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 38. Augment the existing IT staff with an IT Division Manager and an additional IT Specialist. The geographic information system (GIS) program is a core and critical function for the District. The GIS program serves the District by enhancing the understanding of ecosystem processes, providing data analyses to improve land protection efficiencies and effectiveness, facilitating integration of baseline data, serving as a feature location database, and providing valuable information and visuals for presentations. The GIS program serves the entire District and assists in a significant percentage of all action plan projects. Currently, however, the program is housed in Planning and the current GIS group is unable to meet the growing demands of the District. These demands are now felt from all District departments who now rely on GIS to access a large variety of geo-based data and visual products. As the GIS group continues to increase the number of functions it supports and takes on a larger role in large District-wide projects, it becomes more important that this group be adequately staffed and appropriately positioned and integrated within the Information Technology organizational structure to best serve all divisions. Recommendation 39. Integrate the GIS Services group into a new Information Systems and Technology department to better reflect its District-wide service role and augment existing GIS staff with one GIS specialist position. While the District is performing periodic backup of the current servers to a neighboring facility, it is not a sufficient disaster recovery strategy, particularly as the District increases reliance on technology for day-to-day business and operational activities. While the current approach provides redundancy for a site specific failure, it does not provide adequate protection from an area disaster. The District should establish business continuity requirements, then implement a long-term disaster recovery plan that meets those requirements. Recommendation 40. Develop and implement a formal technology disaster recovery plan sufficient to address protection from an area (not site specific) disaster. Implementation of an effective disaster recovery plan includes installing the hardware, software, equipment, and/or services necessary to support a recovery according to business continuity requirements. A key component to establishing a disaster recovery plan is to fully document 48 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners recovery processes such that a recovery can be successfully performed by an experienced IT professional with little or minimal knowledge of the District. Once a plan is implemented, the District should test the plan on a bi- annual basis to ensure that a recovery can be successful. The District is currently not using a help desk management solution to manage requests for technology services. It is important the District establish the use of a formal help desk software solution to track, prioritize, monitor, and report on help desk activities to establish a knowledge base and develop appropriate documentation. Recommendation 41. Implement a desktop management (help desk) solution to manage requests for technology to track, monitor, and report on help desk activities. This would establish a database of frequently asked questions, reduce the reliance on IT staff, automate updates, develop appropriate documentation, and improve inventory tracking. (The District currently has a tool, SpiceWorks, capable of providing this functionality.) The District’s Information Technology function is also understaffed to meet the current key information technology needs of the organization, strategically plan for the future, and provide the leadership to move the IT platform to 2015 expectations. The District’s information technology needs have moved well beyond help desk service levels. While staff may be interested in meeting such needs, there is no capacity as a result of the need to respond to urgent, but not strategically important issues, on a daily basis. Recommendation 42. Create a Special Projects Manager position to provide project management support for internal support systems (i.e., IST implementation plan, records management system, purchasing process and procedures). This position will report to the Chief Financial Officer/Director of Administrative Services and provide special projects capacity and support beyond Information Technology project. Human Resources A variety of personnel and critical staffing needs will require Human Resources to be more innovative as well as efficient to meet the demands of the organization. The organization needs to increase staffing on an expedited basis, review impacted classifications, and address employee 49 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners and labor relations issues. This will require a re-positioning and rethinking of how Human Resources work gets done. Expanding capacity in Human Resources will help ensure employees are supported through the initial FOSM implementation and in creating a long standing culture and organization climate that is adaptive. Human Resources will require greater visibility in the organization. Recommendation 43. Establish a Human Resource management level position responsible for planning and meeting critical recruitment issues and sustaining a committed workforce. District staff levels have grown at an annual rate of 4.8% since Fiscal Year (FY) 2004-05 which challenge Human Resource’s ability to forecast workload requirements and hire qualified staff. Current Human Resources capacity and systems will be unable to meet the demand without updated classification and employee relations policies and procedures along with innovative hiring strategies. Recommendation 44. Hire interim, temporary, or contract Human Resources staff to meet the need for recruitment of positions on the organization’s critical FOSM implementation path. A number of key human resource policies have not been developed within the District or are not fully understood across the management team. Examples include the process for filing and addressing an employee grievance, the process of handling acting assignments and people working out of class, procedures for requesting and authorizing a reclassification, and the process for establishing new positions and new classifications. Recommendation 45. Develop reclassification policies and procedures to streamline classifications and effectively respond to organization staffing needs. Facility Management Facilities management planning and maintenance responsibilities are spread across the organization. Having a decentralized facilities management function is an inefficient use of staff. IT and maintenance staff are regularly called upon to address facility maintenance issues which can impact up to 25% of their capacity to perform regular line duties. Moreover, existing office space is severely constrained and planning for an expanded work force must become a priority. 50 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Recommendation 46. Reassign facility management responsibilities to Operations and develop a resource allocation plan which includes existing staff and contract services to maintain District facilities. Recommendation 47. Complete a facility master plan to address the District office and operational needs for the next decade. Document Management A core technology for virtually all public agencies is an electronic document management system (EDMS). This technology has many benefits (e.g. reduction of hardcopies, improved information sharing, increased transparency, facilitating easier searching of documents, supporting retention standards, etc.) for an organization. The full value of an EDMS is realized when it is tightly integrated with other core systems such as finance, HR, payroll, GIS, etc. Document management system implementations are inherently risky and expensive. To mitigate the project risk, the District should establish clear business requirements to ensure the best fit vendor solution is purchased and implemented. In addition, it is important that District staff have clear expectations as to what is being implemented and how they will be expected to use the system. Recommendation 48. Complete a comprehensive requirements analysis and establish a formal project plan to procure and implement a document management system. General Manager’s Office The General Manager’s Office will play a critical role in guiding the organization through the transformation that will occur with implementation of the FOSM recommendations as the organization pursues its vision. It will take leadership and a careful focus on clear, internal communication. District staff must understand the rationale behind changes as they occur and the General Manager’s Office will be unilaterally responsible for communicating a compelling case for change. To accomplish this, the General Manager’s Office must restructure itself to build additional leadership capacity and further enhance internal and external communication. 51 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners Building Leadership Capacity The District’s executive leadership team has included the General Manager and two Assistant General Managers together with the Board- appointed General Counsel and Controller. In the recent past, the Assistant General Managers have played a tactical role in the implementation of special projects. These tactical assignments are appropriate for a small, stable organization with strong systems to support existing staff. However, the District will soon be undergoing a period of tremendous transition and growth which creates a pressing need for organizational leadership. To build this leadership capacity within the executive team, the Assistant General Managers must delegate the tactical implementation of key special projects to skilled managers elsewhere in the organization. Recommendation 49. Assign the tactical implementation of special projects to skilled managers elsewhere in the organization. This delegation will require a clear communication of expectations regarding special project implementation, routine check-ins, and project updates to the executive management team, genuine employee empowerment to perform the analytical tasks associated with project work, and constant support and communication from the executive management team. These efforts will create capacity within the executive management team to focus more on strategy and organizational leadership. Even with the tactical implementation of special projects reassigned to District managers, the General Manager’s Office will need additional analytical capacity to track and monitor all annual projects, especially those related to capital improvements tied to Measure AA funding. This monitoring should happen centrally to ensure the executive management team is fully aware when projects are off track and require problem solving. Recommendation 50. Establish a senior management analyst position that reports directly to the General Manager to monitor District project delivery, provide annual CIP project oversight The District’s enabling language limits the General Manager’s spending authority by not allowing staff to make decisions at the lowest possible level and be accountable for results. As a result of the $25,000 purchasing 52 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners authority limitation, for example, staff spends an unnecessarily significant amount of time processing Board staff reports for bid awards or professional services contracts instead of program or project delivery. Having to present staff reports to the Board for such contracts unnecessarily pulls staff capacity from the executive management team. Recommendation 51. Increase the General Manager’s spending authority. Enhancing Communication Implementing the recommendations tied to this report will require a focused, united, and consistent voice across the organization. The District’s executive management team will have to regularly communicate the organization’s plans for the future, including the rationale behind changes as well as how change will be carried out over time. Implementing the Vision Plan will also demand closer attention on District branding, constant project progress reporting, creating public relations opportunities to market District assets, and continued connecting with the public. All these goals can be most effectively accomplished by bringing Public Affairs into the General Manager’s Office. Recommendation 52. Locate the Public Affairs team within the General Manager’s Office and establish expectations for the team to focus on both external and internal communication. This restructuring will expand the focus of the Public Affairs team to District-wide issues and communication challenges. Office of the General Counsel The Office of the General Counsel is staffed by a full-time, board- appointed General Counsel and two support positions, including an assistant general counsel (approximately 0.8 FTE) and a risk management coordinator (0.5 FTE). This team of three employees provides sufficient legal and risk management services to the District at this time, given the existing workload across the organization. Nevertheless, land acquisitions are becoming more complicated as time passes, with many newly acquired properties coming to the District with legal issues related to contamination, encroachment, maintenance, or tenant eviction. As the District’s workload expands and Measure AA enables an even more robust effort to acquire new properties, this will generate additional 53 Financial and Operational Sustainability Model Sustainability Challenges and Opportunities Management Partners demands for legal services. The District may consider looking into opportunities to supplement existing legal services staff with contracted legal support. Similarly, there will be a concurrent increase in the number of contracts for goods and services, more employees brought on board, and more interactions with the public and neighbors, all with attendant increases in need for every day legal services and increasing potential for legal disputes to avoid or manage. As the District’s profile increases, and its property inventory expands, there will be an increasing demand for risk management services and general and special legal services. This support will need to be scaled accordingly, though it is difficult to estimate at this juncture. Recommendation 53. Maintain existing staffing levels within the Office of the General Counsel; as workload expands with Measure AA implementation and the growth of complex land acquisitions, evaluate opportunities for supplemental contracted and/or in- house legal and risk management support over time. Recommendation 54. Assess the need for a centralized risk management function under the direction of a risk manager as the size and scale of District operations increases over time. 54 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Building the Sustainable Organization Structure High performing organizations share certain structural characteristics. They are designed around outcomes, not individual specialties, and reflect how the team is expected to work together. Such organizations are structured with a clear chain of command but have an expectation of horizontal teamwork to achieve desired outcomes. Finally, they create boundary-crossing partnerships that encourage collaboration. Through the lens of these effective organization concepts, Management Partners developed a set of guiding principles unique to Midpeninsula that provide a framework for organization alternatives. These guiding principles were reviewed with the Board during its January 28, 2015 study session. Effective organization structures should: 1. Be designed around desired outcomes, not specialties. 2. Be based on clear outcomes of the organization and how the team is expected to work together to achieve them. 3. Be clear about the chain of command, but expect horizontal teamwork to achieve desired outcomes. 4. Create boundary-crossing partnerships that encourage collaboration. Guiding Principles The following set of principles was developed as a guide for decision- making regarding alternative organization structures. 1. The goals outlined in the Vision Plan will drive the work of the organization and it will be structured to be transparent and accountable to the taxpayer. 2. Functions will be structurally aligned in a manner that ensures successful program and project management that clearly delineates roles and responsibilities to build accountability and promotes efficiency and effective operations. 55 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners 3. The organization will utilize integrated and effective business, administrative, and information systems to enable a sustainable and fiscally viable organization. 4. The District’s project delivery objectives will be achieved through a disciplined project management approach with clearly defined roles and responsibilities reflecting areas of expertise. 5. Leadership, decision making authority, and information flow will encourage organizational effectiveness, performance, and accountability. 6. The organization will facilitate employee development and growth including through career-paths that provide opportunities for advancement. 7. The organization will be scalable to ensure sustainable alignment of core functions and meet changing demands for service over time. Organizational Design Strategic Objectives In addition, the following set of strategic objectives form the basis of FOSM implementation priorities and highlight the District’s need for organizational change and increased capacity to meet a demanding work program. 1. Administrative Systems: Develop administrative and information systems required for efficient and effective management, accountability, and strong customer service. 2. Program and Project Delivery: Position the organization to deliver programs and projects efficiently through effective and accountable systems, defined responsibilities, and a capable and collaborative workforce. 3. MAA Program: Integrate Measure AA program and project delivery within a defined Capital Improvement Program (CIP) with oversight that ensures accountability and facilitates the delivery of projects within a team-based framework. 4. Further Develop the Organization’s Capacity to Change and Adapt: Expand capacity and develop the District’s ability to adapt and scale up over time. Organization Structure Options The District’s mission to preserve natural resources and provide greater access to them serves to attract and retain high quality employees. However, the existing structure does not fully leverage the team’s 56 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners capacity to meet the demands of Measure AA projects or fulfill the District’s Vision. The current model is not easily scalable and relies on broad skills that are tapped as needed to get the job done. To enable reliable growth the District must structure itself in a manner that aligns similar services to improve business performance so that work is completed more quickly, with less effort, and provides for improved results. An aligned organization structure visually depicts and defines the reporting relationships and clear workflow paths within an organization. It also provides a roadmap for promotions and creates employee advancement tracks. More significantly, effective alignment makes the organization flexible and scalable. The result in a more sustainable structure. Management Partners observes that Midpeninsula has three key service areas: planning and project delivery (front end work), operations and visitor services (back end work), and administration and internal support, which provides the foundation and support necessary for the other service areas to be successful. These three business lines and the structure and accountability to service them are not easily identifiable on the current organization chart. The existing structure is designed around functional specialties and employee relations objectives which results in less efficient operations and a lack of accountability for results. Core organization functions need to be in alignment to enable effective program management, project delivery, and efficient operations. The following recommendations to structure the District’s three primary service areas with clear lines of accountability and leadership apply to each of the organization models that follow. Recommendation 55. Align the District’s administrative services functions of finance, human resources, and information technology under a new Chief Financial Officer (CFO)/Director of Administrative Services. Recommendation 56. Ensure collaboration, effective communication, and project completion by having the managers of Real Property, Planning, and Capital Projects/Engineering report to the same Assistant General Manager. 57 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Recommendation 57. Align the field-focused functions under the same Assistant General Manager to maintain open communication, shared resources, and a customer- driven approach. Management Partners worked closely with the Executive Team to develop and analyze alternative structures that could best meet the objectives laid out in the guiding principles and strategic objectives and address critical needs of the organization. The resulting alternatives fall into three categories: parallel organization, matrix organization, and integrated core business organization. An evaluation of each is listed below using the guiding principles as the “yard stick” or measurement of effectiveness. The models were reviewed in detail with the Board of Directors at their January 28, 2015 Board study session. Option 1 – Parallel Organization for Measure AA The first option that Management Partners considered placed a bright spotlight on the delivery of projects funded by Measure AA. It created a parallel structure that would operate with a single mission of delivering Measure AA projects. All functions associated with the delivery of this work program from planning through construction would report to a single manager charged with delivery of projects. Measure AA demands throughput; a reliable and transparent structure; and full accountability. This model achieves that result, but at a cost to efficiency and with the risk of establishing a competing, rather than collaborative, team environment. In addition to setting up the parallel Measure AA department, this model addresses the business need for integrated business and information systems by aligning all administrative functions under a single leader. It also creates a Capital Improvement Program (CIP) engineering and construction team and divides the existing Operations department into two departments to address growing demand for visitor services and increases in workload for maintenance staff. The pros and cons of this model were reviewed with the Board during a study session and are summarized below. Parallel Option – creates a parallel organization around Measure AA project delivery intentionally doubling functions to support increased project delivery and clear accountability (Figure 12). Pros a) Clear Measure AA responsibilities b) Transparency and accountability for Measure AA 58 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners c) Integrated business and information systems Cons a) Duplicative b) Highly inefficient c) May undermine teamwork culture of District d) Non-Measure AA project delivery roles and responsibilities unclear Figure 12. Parallel Measure AA Structure General Manager Operations Finance and Administrative Services Public Affairs Finance Human Resources Information Technology Board of Directors Planning, Stewardship and Development Planning Natural Resources Real Property Controller/CFO General Counsel MAA Program Management and Project Delivery Planning Real Property Natural Resources Engineering / Construction Support Interpretive Programs (Volunteers/Docents) Maintenance Ranger Program Facilities/Property Management Land and Facilities Visitor Services Capital Improvement Program (design and construction) Option 2 – Matrix Organization The second option applies a matrix structure that draws upon resources from within the organization to deliver projects through a Measure AA Program Manager that reports to the General Manager. Matrix models have proven to be highly effective for organizations charged with delivering a major project or initiative. The model maintains accountability through defined leadership but allows for other regular operations to continue uninterrupted. The challenge in this case is that Midpeninisula is not implementing one or two large projects after which 59 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners regular activities resume. Midpeninsula has an ambitious, long-term commitment to deliver a multitude of projects. The matrix model may aid in short term delivery demands as the organization shifts and changes, but this is not preferred long-term solution. Matrix Option – establishes a leadership position related to Measure AA projects that draws all resources from within current organization structure. (Figure 13) Pros a) Clear Measure AA responsibilities b) Integrated business and information systems c) Staff development and succession opportunities Cons a) Lacks functional alignment b) Lacks transparency and accountability for all other project delivery c) Staff may become overwhelmed and challenged to focus on priorities b) Unscalable 60 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Figure 13. Matrix Measure AA Structure Option 3 – Integrated Core Business Model The final model incorporates the culture of collaboration at the heart of Midpeninsula while establishing a framework for scalable growth, clear lines of responsibility and accountability, and identifiable paths for succession. This model recognizes that despite the incredible impact Measure AA has on the organization’s ability to grow and expand, it is simply one funding source for delivery on the promise outlined in the Vision Plan. As such, Midpeninsula must organize itself in a manner that supports an integrated approach to delivering both projects and services in the long term. Separating Measure AA does not support that need. Integrated Core Business Option (i.e., project planning and delivery/visitor and field service/administrative support) – clusters like functions to capture synergies, maximize information flow, and enhances capacity to deliver three times the output as well as integrates Measure AA projects implementation into core business model. (Figure 14) 61 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Pros a) Clear Measure AA responsibilities b) Transparency and accountability for Measure AA c) Aligns functions by three core business lines of the District d) Scalable and provides for long term sustainability e) Staff development and succession opportunities f) Integrate business and information systems Cons a) Absent effective leadership, commitment to new roles and improved systems, organization can fall into old patterns of inadequate accountability and slow decision making Figure 14. Integrated Core Service Structure The organization charts shown on the next two pages (figures 15, 16, 17, and 18) present the alignment of functions by major business area and the General Manager’s Office. Discussion regarding the organization structure within these departments has begun and will be developed during the implementation stages of the FOSM. General Manager Visitor and Field Services Assistant General Manager Finance and Administrative Services CFO / Director of Administrative Services Finance Manager Human Resources Manager Information Technology Manager Board of Directors Project Planning and Delivery Assistant General Manager Planning Manager Real Property Manager General Counsel Controller Executive Assistant Engineering and Construction Manager Natural Resources Manager Visitor Services Manager Land and Facilities Services Manager Special Projects and Program Management Senior Management Analyst Public Affairs Manager District Clerk Special Projects Manager 62 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Figure 15. Planning and Project Delivery Figure 16. Operations and Visitor Services General Manager Board of Directors Project Planning and Delivery Assistant General Manager Planning Manager Real Property Manager General Counsel Controller Engineering and Construction Manager Land acquisition Property acquisition CEQA Current planning Long-range planning Regional trails coordination Signage Design and engineering Construction MAA project delivery Permits Visitor and Field Services Assistant General Manager Finance and Administrative Services CFO / Director of Administrative Services General Manager Visitor and Field Services Assistant General Manager Board of Directors Project Planning and Delivery Assistant General Manager General Counsel Controller Ranger program Docent/volunteer program Public safety District stewardship Grazing Pest management Vegetation management Wildlife management Field maintenance Facilities maintenance Property and land management Trails and construction Natural Resources Manager Visitor Services Manager Land and Facilities Services Manager Finance and Administrative Services CFO / Director of Administrative Services 63 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Figure 17. Finance and Administrative Support Figure 18. Office of the General Manager General Manager Finance and Administrative Services CFO / Director of Administrative Services Finance Manager Human Resources Manager Information Technology Manager Board of Directors General Counsel Controller Accounting Procurement Budget Recruitment Benefits Classification and compensation Employee recognition Organizational development Performance management Training Workers’ compensation Safety ADA compliance Systems GIS Web maintenance Support Records management Special Projects Manager Visitor and Field Services Assistant General Manager Project Planning and Delivery Assistant General Manager General Manager Visitor and Field Services Assistant General Manager Project Planning and Delivery Assistant General Manager Executive Assistant Intergovernmental Internal communication Media Outreach Special Projects and Program Management Senior Management Analyst Public Affairs Manager District Clerk Board of Directors General Counsel Controller 64 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Staffing Projections In addition to developing a recommended organization structure that allows for significant growth in staffing and a shift in mission, the FOSM calls for a high-level projection of staffing needs over the next 30 years. Such a projection is a reasonable best estimate given the many factors that may alter the trajectory of the District over 30 years. However, using existing assumptions from the Vision Plan, which identifies specific projects and goals, and based on current staffing ratios, Management Partners developed a series of operating assumptions for staffing projections that are based on objective criteria. These criteria are based on analysis of workload projections and current operating practices, including gaps and limitations. Based on Management Partners’ analysis, the following operating assumptions were applied: • Planning and project delivery workload will ramp up in the near term and then plateau • The greatest area of growth over time will be in Visitor and Field Services (“Operations” under the organization model) • Finance and Administrative Services must keep pace with the growing organization • Demand for in-house natural resources expertise will be ongoing with support for both project planning and visitor and field services The staffing projections are organized by business lines (service area) and department, as summarized in Table 4. Business Lines and Corresponding Departments Business Line Departments Project Planning and Delivery Engineering and Construction Planning Real Property Visitor and Field Services Natural Resources Visitor Services Land and Facilities Services Administrative Support Finance and Administrative Services Finance Human Resources I.T. Office of the General Manager 65 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Projections Methodology In order to provide projections for anticipated staffing, Management Partners established scaling criteria as shown in Figure 19. The new Visitor Services and Land and Facilities Services departments are scaled based on projected increases in miles of trail. Planning and Natural Resources are scaled based on the number of projects. The number of projected Engineering and Construction staff that will be needed is linked to the increases projected in the Planning department. The administrative support for the organization is scaled based on the size of the organization. A scaling criterion is not applied for other departments. The model accounts for an increase of two staff members in the Office of the General Manager based on anticipated support required to implement internal special projects and monitoring and report of Measure AA project delivery. Figure 19. Applied Scaling Criteria by Department The miles of trail is used as a workload measure to scale staffing levels for Visitor Services and Land and Facilities Services departments. The trail- miles data is used as a proxy to indicate future workload of visitations, patrol, maintenance, and other-related factors. Two separate ratios are calculated based on the number of existing trail miles and the current number of staff for Visitor Services and Land and Facilities services. The ratios are then applied to the projected number of trail miles in 2020 and in 2045 to derive projections for staffing levels of Visitor Services and •Visitor Services •Land and Facilities ServicesMiles of Trail •Planning •Natural Resources •Engineering and Construction (based on Planning throughput) # of Projects •Administrative support (Visitor and Field Services) •Finance and Administrative Services (Finance, HR, IT) # of Staff •Real Property •Public Affairs •General Manager and other Board appointees No Criteria 66 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Land Facilities Services departments. The trail mile data and its sources are summarized in Table 5. Number of projects is used as a workload measure to scale staffing levels for Planning and Natural Resources departments. The model anticipates an initial increase in the number of projects and then remains constant until the completion of Measure AA due to the staggered and phased nature of the projects. Separate ratios are calculated based on the sum of projects of specific categories in FY 2013-14 (Real Property, Planning, Natural Resources, and Operations) and the current number of staff for Planning and Natural Resources departments. The ratios are then applied to the sum of projects from the designated categories in FY 2015-16 to derive projections for staffing levels of the Planning and Natural Resources departments. The staffing in these departments is projected to remain at FY 2015-16 levels until the completion of the Measure AA assuming no additional infusion of funds or policy direction to deliver projects at a faster rate. The project data used and its sources are summarized in Table 5. As the functions of the Engineering and Construction department closely support the functions of the Planning department, the staffing projections are directly correlated. The projections model assumes one additional Engineering and Construction staff for every three to four additional Planning staff. Workload Data Used for Scaling Ratios Workload Data Base year 2020 2045 Trail Miles 2301 2832 4113 # of Projects 464 1025 1025 1 2015 trail miles provided by the District. 2 53 miles to be added within the first 5 years of Measure AA project implementation according to Planning Manager’s Memo (2/19/2015). 3 181 miles of trails added to 2015 trail miles by tabulation of “Top 25 Projects” hard and soft cost spreadsheets. 4 FY 2013-14 project count from Year-End Action Plan (Real Property, Planning, Natural Resources, and Operations). 5 Increased number of projects from Measure AA implementation as indicated by FY 2015-16 Action Plan Key Projects (Real Property, Planning, Natural Resources, and Operations). The number of operations staff is used as a workload measure to scale administrative support staffing levels. The model assumes that the support needs will uniformly increase. A ratio is calculated based on the current number of support staff and the current number of operation staff in the business line (Visitor Services, Land and Facilities Services, and 67 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Natural Resources departments). The ratio is then applied to the projected staffing levels of the operational staff to derive the projections for the administrative support staff of Visitor and Field services. The number of total staff is used as a workload measure to scale staffing levels for Finance and Administrative Services business line. The model assumes that the support needs will uniformly increase. Separate ratios are calculated based on the current number of staff for each support function (finance, human resources, and information systems and technology) and the current size of the organization. These ratios are independently applied to the projected size of the organization to derive projections for the staffing levels of Finance and Administrative Services. Using the scaling criteria, the projection methodology establishes ranges of staff increases to compensate for the imprecise nature of long-range staffing forecasts. These projections will need to be reviewed and refined over time, with specific staffing requests occurring primarily during the annual budget process. Projections The results of the staffing model reported in Table 6 project that the District will need to increase staffing by 41 to 51 positions over the next five years (a 10% margin is used to create the range) to fully realize the five-year vision plan objectives and ensure adequate staff support. The staffing increases in business areas of Project Planning and Delivery and Finance and Administrative Services are expected to plateau after the five year mark, while in Visitor and Field Services staffing needs will continue to increase as Vision Plan projects come online and require long term operation and maintenance. The District’s projected staffing profile by business line is shown in Figure 20. Changes in the number or type of projects to be completed within this time period could alter the position counts (i.e., fewer projects that result in new trail miles to be maintained or a reduction in the number of overall projects delivered by planning and project delivery teams). 68 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Staffing Model Projected Staffing Increases by Business Line Business Line Departments Projected Increase by 2020 Projected Increases 2020 to 2045 Total Projected Increase Project Planning and Delivery Engineering and Construction Planning Real Property 10 to 13 TBD 10 to 13+ Visitor and Field Services Natural Resources Visitor Services Land and Facilities Services Administrative Support 20 to 25 37 to 45 57 to 70 Finance and Administrative Services Finance Human Resources I.T. 9 to 11 6 to 8 15 to 19 Office of the General Manager 2 0 2 Projected Staffing Increase (Range) 41 to 51 43 to 53 84 to 104 Figure 20. Projected Staffing by Business Line 0 20 40 60 80 100 120 140 160 Project Planning and Delivery Visitor and Field Services Finance and Administrative Services Office of the General Manager and Misc. Fu l l -Ti m e E q u i v a l e n t E m p l o y e e s Current Projected Increases by 2020 Projected Increases 2020 - 2045 69 Financial and Operational Sustainability Model Building the Sustainable Organization Structure Management Partners Specific positions and the timing of the additions will be assessed and recommended to the Board by department managers based on justified need. To justify new staffing needs, managers will be equipped to use the criteria applied by Management Partners as well as enhanced workload metrics as real-time workload data become available with the development of new information management systems. 70 Financial and Operational Sustainability Model Financial Sustainability Management Partners Financial Sustainability The District must grow significantly to fully achieve the goals outlined in the Vision Plan. A key driver for pursing the FOSM study was to assess the organization’s ability to financially meet the workload demands of implementing its ambitious Vision Plan. The District’s Controller maintains a 30-year financial model that is continuously updated to address the changing environment of the District and reflect the most currently information available. The fiscal model applies a series of assumptions that drive the forecast. There are several risk-factors that require monitoring over time; however, the organization will have ample time to respond and take corrective action if one or more of the risk- factors materialize. Midpeninsula’s Fiscal Model The District Controller’s 30-year financial model is driven by assumptions in four main categories: tax revenues, operating expenditures, non- Measure AA capital expenditures, and Measure AA-related expenditures. The Controller assumes an annual tax revenue growth rate of 5.0% in the first ten years and a lower rate of 4.5% in the years that follow. These tax rates are lower than the 20-year historic average annual growth rate of 6.4%. The expenditure side of the model includes aggressive assumptions for operating and capital costs. The Controller assumes an ambitious addition of 40 employees by FY 2017-18 and non-Measure AA capital expenditure assumptions include a $20 million investment by FY 2018-19 for anticipated facility costs. Finally, the Measure AA-related expenditure assumptions include labor costs and a generous assumption for contingency costs. The details of these assumptions are outlined in Table 7. 71 Financial and Operational Sustainability Model Financial Sustainability Management Partners Summary of Key Assumptions of the Fiscal Model Category Key Assumptions Notes Tax Revenues FY 2015-16 base: $36.3 million FY 2015-29 annual growth rate: 5.0% FY 2030-45 annual growth rate: 4.25% The average annual growth rate of assessed valuation in the District for the last 20 years is 6.4%. Operating Expenditure FY 2015-18 accounts for 40 additional employees FY 2017-18 base: $24.8 million FY 2015-29 annual growth rate: 7.0% FY 2030-45 annual growth rate: 5.25% The average annual growth rate of operating expenditure over the past 5 years is 6.0%. Non-Measure AA Capital Expenditure FY 2016-19 accounts for $20 million in new facilities. FY 2015-16 base: $3.9 million FY 2015-29 annual growth rate: 5.0% FY 2030-45 annual growth rate: 4.25% The average annual growth rate of capital expenditure has a fluctuating historic trend. Measure AA Expenditure Bond proceeds every 3 years. Measure AA labor expenditures are 12.5% of total Measure AA expenditures. Grant income will fund 8.0% of the Measure AA project expenditures. Bond debt service is calculated based on economic assumptions by the Controller. Measure AA capital expenditure is informed by work plans, which includes generous contingencies. Measure AA grant income projections amount to $24 million over 30 years. The fiscal model forecasts a stable future under the Controller’s conservative assumptions. Even with an increase of 40 positions in the next three years and ongoing expenditure increases, the operational expenditures remain below 90% of projected tax revenue over the full 30 year period as shown in Figure 21. In other words, the tax revenues will be sufficient to support the growth of the organization’s operational expenses in the defined time frame. 72 Financial and Operational Sustainability Model Financial Sustainability Management Partners Figure 21. Operational Expenses as Percentage of Tax Revenue Model Stress Testing The Controller’s fiscal model was tested with a “Great Recession” scenario to assess the District’s capacity to respond to drastic economic scenarios. The test applied a worst-case scenario by inserting the tax rate realized by the District during the worst years of the Great Recession for a four years period and making no reductions to expenditures. While this scenario is unlikely since the District would likely constrain or reduce expenditure as revenue decline, the test reveals the strength of the District’s financial position. As shown in Figure 22, the District reaches 100% of tax revenue approximately ten years following the major recession. This affords the District ample time to adjust for the economic correction. 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% 1 4 - 1 5 1 5 - 1 6 1 6 - 1 7 1 7 - 1 8 1 8 - 1 9 1 9 - 2 0 2 0 - 2 1 2 1 - 2 2 2 2 - 2 3 2 3 - 2 4 2 4 - 2 5 2 5 - 2 6 2 6 - 2 7 2 7 - 2 8 2 8 - 2 9 2 9 - 3 0 3 0 - 3 1 3 1 - 3 2 3 2 - 3 3 3 3 - 3 4 3 4 - 3 5 3 5 - 3 6 3 6 - 3 7 3 7 - 3 8 3 8 - 3 9 3 9 - 4 0 4 0 - 4 1 4 1 - 4 2 4 2 - 4 3 4 3 - 4 4 4 4 - 4 5 Operating Exp/Taxes 73 Financial and Operational Sustainability Model Financial Sustainability Management Partners Figure 22. Operational Expenses as Percentage of Tax Revenue With One Great Recession Note: Great Recession-level 2.27% AV growth occurs from FY 2025-29 Risk Factors There are several risk factors to monitor regardless of the strong financial position forecast by the Controller’s fiscal model. First, if the assessed value does not grow as predicted, the organization may experience resource constraints, as 75% of current revenue is from property taxes. Second, if the organization takes on more non-General Obligation (GO) debt than it is able to service, the resulting debt service expenditure could threaten the fiscal health of the organization. Third, if operational expenditures grow faster than projected, the ongoing tax revenue will not be sufficient to support the operations of the organization. The last risk factor is the organization’s inability to spend down bond proceeds. While important to monitor the potential for these risks, the dynamic nature of the Controller’s fiscal model allows the District to predict, plan, and adapt to the economic conditions and respond before a risk becomes detrimental to the financial health of the organization. FY 2043-44 0% 20% 40% 60% 80% 100% 120% 1 4 - 1 5 1 5 - 1 6 1 6 - 1 7 1 7 - 1 8 1 8 - 1 9 1 9 - 2 0 2 0 - 2 1 2 1 - 2 2 2 2 - 2 3 2 3 - 2 4 2 4 - 2 5 2 5 - 2 6 2 6 - 2 7 2 7 - 2 8 2 8 - 2 9 2 9 - 3 0 3 0 - 3 1 3 1 - 3 2 3 2 - 3 3 3 3 - 3 4 3 4 - 3 5 3 5 - 3 6 3 6 - 3 7 3 7 - 3 8 3 8 - 3 9 3 9 - 4 0 4 0 - 4 1 4 1 - 4 2 4 2 - 4 3 4 3 - 4 4 4 4 - 4 5 74 Financial and Operational Sustainability Model Road Map to Implementation Management Partners Road Map to Implementation The District has a number of goals and objectives across several critical plans for action (annual Action Plans, Measure AA top 25 projects, administrative and business improvements). Strategies for implementing them require close coordination and clear priorities to enable staff to be accountable and for projects to be successfully implemented. Two tools will facilitate successful implementation: 1) a change management approach and 2) phasing actions. District staff is committed, engaged, and enthusiastic about the work and mission of the organization. This provides a good platform from which to launch organization change and institute business and system improvements that position the organization to achieve its ambitious vision. Staff are committed to the vision and mission. However, many feel challenged by the current and proposed work program and implementation of Measure AA. Change Management Strategy Managing change is not enough. Organizational change needed to develop an effective Measure AA implementation plan and new administrative systems will require dedicated executive level leadership, a continuing sense of urgency, and adequate resource allocations. There are five components to successful change management: • Planning • Defined governance • Committed leadership • Informed stakeholders, and • Aligned workforce 1 1 Change Management Best Practices: Five Key Factors Common in Managing Organizational Change, Queensland Government, 2009 available at www.psc.qld.gov.au/publications/subject-specific-publications/assets/change- management-best-practice-guide.pdf 75 Financial and Operational Sustainability Model Road Map to Implementation Management Partners Planning Proper project planning requires high quality systems, full team engagement, clearly defined outcomes, thorough risk assessments, autonomy and delegation of decision making, timely problem solving, and proper monitoring. As the District proceeds with the recommendations to institute management and information systems and develop a systematic project delivery approach, the organization will be successfully positioned to deliver results. Defined Governance The Board and senior and executive management seek extensive analysis and detailed information before decisions are made, which can be both ineffective and inefficient. Delegating work that belongs to division heads and managers frees up time for senior and executive management to focus on “big picture” Vision implementation and support the needs of elected officials and policy decision-making. Performance plans that cascade from the Board to the General Manager to Assistant General Managers to department heads play a critical role in aligning high-level goals down into the organization. Clarification regarding roles and responsibilities of the District governance system further positions the agency for successful results. The Board, leadership team, and staff each own different parts of the governance continuum. The Board provides policy level review and decision-making. This should include revising existing policies and procedures regarding Board relationships with staff. Staff is charged with focusing on implementing the vision and administering the District work plan through Board-established clear work plan priorities and direction. Recommendation 58. Support effective Board and staff working relationships by defining clear roles and responsibilities and reviewing and updating policies and procedures that effect these interactions. When adequate role definition, policies, and systems are in place, trust and accountability within and outside the organization will increase. This will enable policy makers to focus on policy and strategic direction instead of operations and administration. 76 Financial and Operational Sustainability Model Road Map to Implementation Management Partners Committed Leadership By forming a coalition of change leaders throughout the organization, District leadership should ensure staff has the tools, training, and resources to complete the work and achieve the defined outcomes. To achieve alignment through all levels of the organization, it is crucial to provide staff policies and procedures (personnel, purchasing, project management, property acquisition) that frame and clarify the performance expectations, employment boundaries, and the work climate. Establishing clear meeting management practices will help ensure purpose driven, productive and meaningful results. As work becomes more complex, effective and efficient meeting management will be critical to administrative success. Likewise, delegating problem solving and decision making to employees that are aligned at all levels of the organization improves work flow processing and keeps. Recommendation 59. Establish meeting management and delegation practices that ensure productive and meaningful results and utilize the expertise and skills of staff. Informed Stakeholders Measure AA implementation and change management will require a coalition of committed, accountable leaders, with a common vision of what success looks like and clear outcomes that are thoroughly communicated. Creating and communicating a vision for organization change accompanied by a sense of urgency enables staff members to connect incremental tasks to the broader purpose of their work. Frequent and regular communication (i.e., employee newsletter, shared calendars, joint administration and field staff events) will help staff understand what is being asked of them and set a context for future directives, planning and associated action plans. Recommendation 60. Establish an internal and external communication strategy for FOSM Implementation. Clear and frequent communication from management about how organizational changes will affect the workforce is seen as underdeveloped by many employees. Having many District operations based in different buildings and different areas can make communication challenging without an intentional, organized effort. 77 Financial and Operational Sustainability Model Road Map to Implementation Management Partners Aligned Workforce As reviewed in detail within the organization structure section of this report, alignment is a critical component of an agency’s success. We previously recommended a structure that will include the reorganization of some activities and the addition of functional capacities consistent with the three business lines: Planning and Project Delivery, Operations and Visitor Services and Administration and internal Support. Phasing: How do we get started with these changes? Phase I As has been discussed, the foundational management and information systems must be developed first. Since it is necessary to supporting operations, project delivery, and the District’s institutional infrastructure, conducting an information systems and technology (IST) study and designing an implementation plan regarding the study findings will help to immediately address three vital systems: maintenance management, project management, and client management. Also, developing position descriptions and beginning the recruitment process for the Chief Financial Officer/Administrative Services Director and the Information Technology Manager positions, will allow the District to align the administrative functions and move quickly to implement the IST plan. This action builds the administrative leadership team quickly. To support the District project planning and delivery structure, recruitment of an Engineering and Construction Manager will provide an owner of this critical new function in the District. This position will be responsible for moving projects from the planning phase to building and construction. This will offer staff the structure and direction for work and will provide critical resources to support problem solving. An additional phasing plan is necessary to define the transition steps to align the operations team structure that will lead to the new Visitor Services and Land and Field Services departments. The phasing plan will address both the timing and relocation of positions from Public Affairs and Real Property groups. Refinements to positions and titles in Natural Resources and Human Resources will ensure the District has the expertise and confirm each function is properly resourced to perform the new volume of work. 78 Financial and Operational Sustainability Model Road Map to Implementation Management Partners Phase II and III Following completion of Phase I, the organization will be positioned to formalize the new organization structure, consistent with the District’s business lines, and establish the new Engineering and Construction Department, communicate the phasing plan and detailed changes plus timeline regarding the Operations function along with the timing of IST implementation work. The change envisioned through the FOSM will take time and ongoing commitment. An implementation plan that prioritizes the recommendations contained in this report will be developed in conjunction with management and will be used to guide, inform and track progress. 79 Financial and Operational Sustainability Model Conclusion Management Partners Conclusion The Financial and Operational Sustainability Model report is the final component of a deliberate and thoughtful four piece strategy to transform the District to meet new constituent interests and build a long term strategy for sustainable operations. Positioning the organization to use its current and Measure AA resources responsibly in the long run is unprecedented work for typical organizations and reflects a best practice. The study identified a number of opportunities to position the District to accomplish the 2014 Vision Plan. The District workload is proposed to more than double over the next 30 years through Measure AA funding. Focusing resources, attention, and recommended changes on three key areas will position the District to achieve its work plan: 1) Developing core management and information systems will increase staff efficiency and provide data necessary to monitor, adapt, and inform stakeholders regarding Vision Plan progress. 2) Aligning organization functions within the Districts by its three business lines (Project Planning and Delivery; Operations and Visitor Services; and Administration and Internal Support) will improve the efficiency and effectiveness of operations. 3) Delineating and documenting a structure for the workflow of District projects will allow the organization to deliver results and meet public expectations. Capitalizing on these opportunities requires a renewed commitment to roles and responsibilities. Foremost, a commitment to clear priorities and direction as well as patience and persistence is required by leaders in the organization. Change is hard. However, the ambiguity that is inherent in the midst of change can be diminished through disciplined practices that include planning (timing, training, tools, problem solving), defined governance, committed leadership, aligning the workforce, and regular communication with stakeholders. District employees reported that the mission of the agency keeps them inspired and engaged in preservation, restoration, and expanding public access opportunities. Most agencies spend decades investing in resources 80 Financial and Operational Sustainability Model Conclusion Management Partners to establish and build employee commitment to its mission. Valuable, unique, and refreshing, the District can check this leadership challenge off its list. Although significant, FOSM recommendations can harness the commitment to the mission to fuel the tasks ahead. This is an exciting time in the District’s history and an opportunity for each individual to contribute to the legacy of the agency’s transformation. 81 Financial and Operational Sustainability Model Attachment A – List of Recommendations Management Partners Attachment A – List of Recommendations Recommendation 1. Develop mechanisms that periodically clarify and reinforce organizational priorities for staff, so that work can be planned and managed in alignment with those priorities. Recommendation 2. Develop a communication strategy to regularly provide information updates to the Board and public regarding project progress and results, and promote transparency to build public trust. Recommendation 3. Convene internal stakeholders to develop a refined, comprehensive project delivery approach that ensures proper oversight, clarity of roles, prioritization, predictability, and follow-through. Recommendation 4. Integrate specialized functions, such as CEQA review, that play a critical role in project delivery and integrate them into the District’s project delivery approach and identify procedural changes and methods of centralization that lead to greater consistency and efficiencies Recommendation 5. Complete a comprehensive requirements analysis and establish a plan to procure and implement a uniform Project Management System. Recommendation 6. Develop a consistent format for project budgets using a procured project management system that informs work planning and accounts for the total cost of project delivery, including staff time and indirect costs associated with administrative support functions and organizational overhead. Recommendation 7. Expand the list of pre-approved, on-call consultants and contractors that can be available to support the District in its planning, engineering, construction, and project delivery functions. Recommendation 8. Review current contracting/bidding policies/practices to identify opportunities to streamline these policies/practices. Recommendation 9. Create an Engineering and Construction Department and hire an Engineering and Construction Manager to oversee the following project delivery functions: design, permitting and engineering; construction management; and Measure AA project delivery oversight. Recommendation 10. Meet with local jurisdictions to discuss opportunities to improve the permit processing time associated with certain types of permits. Recommendation 11. Create a Property Acquisitions Plan that clearly communicates District acquisition policies and goals that provides a road map for strategic land acquisition. Recommendation 12. Restructure the Real Property function to focus on land and property acquisition, and move the property management function to a Facilities division in the new Land and Field Services Department. Recommendation 13. Establish a “visitor services” function of the organization to provide public facing services and activities. Restructure the organization to align docents, volunteers, and rangers to meet the array of visitor services. 82 Financial and Operational Sustainability Model Attachment A – List of Recommendations Management Partners Recommendation 14. Separate the patrol and maintenance functions into two distinct organizational units, Visitor Services (for patrol staff) and Land and Facilities Services (for maintenance staff). Recommendation 15. Create Manager-level positions to lead the Visitor Services and Land and Facilities Services groups. Recommendation 16. Develop guiding policy similar to the East Bay Regional Park District Pipeline Program that requires District staff to develop estimates for start-up costs as well as ongoing maintenance, safety, and staffing costs for each development project or future land acquisition before the Board commits to the project or purchase. Recommendation 17. Purchase and implement a computerized maintenance management system (CMMS) and provide training on its use. Recommendation 18. Explore new reliable communication technology (i.e., email, voice and visual systems, tough books) to ensure field staff have the information and tools to effectively perform their job responsibilities. Recommendation 19. Establish a special projects/construction team that is dedicated to the delivery of special projects like trails construction. Recommendation 20. Explore opportunities to partner with the private sector to provide existing staff with the capacity to address maintenance backlogs and deferred maintenance. Recommendation 21. Develop a field staff onboarding/ training program that outlines the variety of details and standards used for trails construction and maintenance work throughout the District. Recommendation 22. Maintain effective working relationships with local police and fire departments and as the District expands periodically evaluate automatic aid protocols and response. Recommendation 23. Develop a seasonal employment program for patrol work. Recommendation 24. Complete a Natural Resources Position Classification Study to ensure appropriate staffing types and levels are in place and recruited for in the future. (Underway) Recommendation 25. Expand grazing property management as a function of the new Land and Facilities Management department Recommendation 26. Create crews that focus on specific work functions and incorporate a rotational program that allows for continued professional growth and development of staff. Recommendation 27. Complete a facilities needs study to determine mid and long term field facility needs and investigate alternate maintenance facilities to accommodate future growth. Recommendation 28. Consolidate facility maintenance/property management into the Land and Facilities group. Recommendation 29. Create a facilities maintenance and improvement plan to guide work plans and inform financial decision making. 83 Financial and Operational Sustainability Model Attachment A – List of Recommendations Management Partners Recommendation 30. Document the business and technology requirements for an integrated budget and cost accounting system that enables the District to perform 1) general ledger and fund accounting; 2) project accounting; 3) grant billing and reconciliation; and 4) grant documentation and organization. Recommendation 31. Create a Chief Financial Officer (CFO)/Director of Administrative Services executive level position responsible for the realigned administrative services functions to provide financial and other administrative services expertise and leadership in these areas within the organization. Recommendation 32. Develop a transition plan to shift financial responsibility and management for the District, including managing the Controller’s fiscal model, from the part-time Controller to the new CFO/Director of Administrative Services. Recommendation 33. Maintain the New World Systems financial software at or near the current release and continue to leverage the system to its full potential. Recommendation 34. Review, update, or develop financial management policies and procedures to enable appropriate, accountable, and fiscally sound decisions at the lowest possible level within the organization. Recommendation 35. Centralize the purchasing function within the Finance and Administrative Services Department. Recommendation 36. Develop and implement a Technology Strategic Plan to provide a roadmap for the District’s short and long term implementation and management of technology. Recommendation 37. Implement an IT governance structure that promotes effective planning, priority setting, and accountability of District technology resources (staff, funding, hardware and software) with business priorities. Recommendation 38. Augment the existing IT staff with an IT Division Manager and an additional IT Specialist. Recommendation 39. Integrate the GIS Services group into a new Information Systems and Technology department to better reflect its District-wide service role and augment existing GIS staff with one GIS specialist position. Recommendation 40. Develop and implement a formal technology disaster recovery plan sufficient to address protection from an area (not site specific) disaster. Recommendation 41. Implement a desktop management (help desk) solution to manage requests for technology to track, monitor, and report on help desk activities. Recommendation 42. Create a Special Projects Manager position to provide project management support for internal support systems (i.e., IST implementation plan, records management system, purchasing process and procedures). Recommendation 43. Establish a Human Resource management level position responsible for planning and meeting critical recruitment issues and sustaining a committed workforce. 84 Financial and Operational Sustainability Model Attachment A – List of Recommendations Management Partners Recommendation 44. Hire interim, temporary, or contract Human Resources staff to meet the need for recruitment of positions on the organization’s critical FOSM implementation path. Recommendation 45. Develop reclassification policies and procedures to streamline classifications and effectively respond to organization staffing needs. Recommendation 46. Reassign facility management responsibilities to Operations and develop a resource allocation plan which includes existing staff and contract services to maintain District facilities. Recommendation 47. Complete a facility master plan to address the District office and operational needs for the next decade. Recommendation 48. Complete a comprehensive requirements analysis and establish a formal project plan to procure and implement a document management system. Recommendation 49. Assign the tactical implementation of special projects to skilled managers elsewhere in the organization. Recommendation 50. Establish a senior management analyst position that reports directly to the General Manager to monitor District project delivery, provide annual CIP project oversight Recommendation 51. Increase the General Manager’s spending authority. Recommendation 52. Locate the Public Affairs team within the General Manager’s Office and establish expectations for the team to focus on both external and internal communication. Recommendation 53. Maintain existing staffing levels within the General Counsel’s Office; as workload expands with Measure AA implementation and the growth of complex land acquisitions, evaluate opportunities for supplemental contracted and/or in-house legal and risk management support over time. Recommendation 54. Assess the need for a centralized risk management function under the direction of a risk manager as the size and scale of District operations increases over time. Recommendation 55. Align the District’s administrative services functions of finance, human resources, and information technology under a new Chief Financial Officer (CFO)/Director of Administrative Services. Recommendation 56. Ensure collaboration, effective communication, and project completion by having the managers of Real Property, Planning, and Capital Projects/Engineering report to the same Assistant General Manager. Recommendation 57. Align the field-focused functions under the same Assistant General Manager to maintain open communication, shared resources, and a customer-driven approach. Recommendation 58. Support effective Board and staff working relationships by defining clear roles and responsibilities and reviewing and updating policies and procedures that effect these interactions. 85 Financial and Operational Sustainability Model Attachment A – List of Recommendations Management Partners Recommendation 59. Establish meeting management and delegation practices that ensure productive and meaningful results and utilize the expertise and skills of staff. Recommendation 60. Establish an internal and external communication strategy for FOSM Implementation. 86 Board of Directors November 30, 2018 Dennis DeBroeck Chair Andrew Bosworth Vice Chair John Chamberlain Sean Dempsey Rod Ferguson Jan F. Garrod Wende Hutton Jennifer Lynch Rajesh Mashruwala Matt Miller Brad O'Brien Suzanne Sullivan Sandra Thompson Karie Thomson Sanjay Vaswani Emerick Woods Kimberly Young President Walter T. Moore Peninsula Open Space 222 High Street Palo Alto, CA 94301 opensoacetrust.org (650) 854-7696 Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022 Re: Action Plan — Fiscal Year 2019-20 Board of Directors: On Thursday, December 6, 2018 the District's Board of Directors will consider new projects to include in the District's action plan for the upcoming fiscal year. As the Board considers priority projects, I want to express POST's appreciation to staff and board on the District's continued strong partnership in protecting open spaces for public enjoyment and use. With the identification of a new set of Measure AA ("MAA") priorities by the Board last year, we have seen joint progress on even more shared priorities including breaking ground on the first phase of public access at Bear Creek Redwoods, protection and restoration in the Barrett Creek watershed, planning and design of trail and wildlife crossings at Highway 17, and initiating exploration of the District's acquisition of Cloverdale Ranch. A complete list of collaborations is attached. In the coming year, the long-standing, strategic partnership between our organizations will be as important as ever as we work to tackle existing and emerging challenges in our region. Areas of focus and shared priority include expanding opportunities for public access, securing critical wildlife linkages that allow a broad range of species to adapt and thrive under a changing climate, and protection of agriculture (farms and ranches) on the San Mateo County coast. In addition to continuing to collaborate on the projects highlighted above and in the attached, we wanted to highlight for the Board a new opportunity that has emerged recently to protect land adjacent to the Toto Ranch area of Tunitas Creek Open Space Preserve. POST is under contract to purchase a ranch in San Gregorio. The 535 -acre ranch portion of the property extends south from Toto Ranch to La Honda Road (Highway 84), and POST would like the District to consider purchase of this property for $7.5M, substantially below fair market value and POST's purchase price. Collaborating with POST to protect this property supports key elements of the mission adopted by the District's Board as part of its expansion to the Coastside under the Coastal Service Plan. It will also protect from development part of the coastal landscape that is in the scenic corridors of both Highways 1 and 84, support local agriculture, and secure potential trail connections including the CA Coastal Trail and Ohlone-Portola Heritage Trail. Under POST's agreement with the seller, POST does not need to close on the property until July 15, 2019; however, we are seeking to secure a strong indication of the District's interest in the property before the close of our due diligence period on January 15, 2019. Trust t 0 Recycled Paper Ca Midpeninsula Regional Open Space District November 30, 2018 Page 2 of 3 Making progress towards the transfer of Cloverdale Ranch remains a top priority for POST in the year ahead, and we are eager to support the District's efforts to plan for acquisition and development of resources, as well as efforts to secure outside funding, that will ultimately create a new open space preserve to serve community members on the San Mateo Coast and throughout the District's service area. We are also excited about the abundant opportunities to connect more communities to our lands through the development of regional trails (Purisima-to-Sea, Miramontes Ridge, Bay Area Ridge Trail); increased access close to communities in Los Gatos (Bear Creek Redwoods), Pescadero (Cloverdale Ranch), and Half Moon Bay (Johnston Ranch and Tunitas Creek Beach), and through the protection of critical habitat and wildlife linkages. Lastly, we are incredibly appreciative of the District's initial engagement with our Bay -to -Sea Trail vision, and look forward to collaborating with a broad range of partners on this project going forward. We appreciate the complexity of the task before staff and the District board in prioritizing allocation of resources among many worthy projects. POST remains excited about partnering with the District on a broad range of priority projects to expand opportunities for public access and protect natural resources, as well as continuing to help the District leverage Measure AA funding on critical projects throughout the region. Thank you for the opportunity to submit comments. I look forward to attending the planning session on the December 6th to answer any questions With best regards, Walter T. Moore President Midpeninsula Regional Open Space District November 30, 2018 Page 3 of 3 Attachment Collaborative Projects • Initiating exploration of acquisition of Cloverdale Ranch (MAA Project # 13); • Coordination on acquisition of Johnston Ranch uplands, which would allow for new public access opportunities near Half Moon Bay and a trailhead for eventual to Miramontes Ridge OSP (MAA Project #1); • Working towards acquisition of Purisima Upland, a key piece of the Purisima-to-Sea trail (MAA Project #3); • Ground -breaking and the impending opening of first phase of public access at Bear Creek Redwoods (MAA Project #21); • Planning and design of Bay Area Ridge Trail and wildlife crossings at Highway 17 near Lexington Reservoir (MAA Project #20); • Advancing a plan for Alpine Road trail improvements (MAA Project #10); • Supporting POST's Bay -to -Sea Trail vision; • Coordination on protection and restoration of the Barrett Creek watershed through the acquisition and clean-up of the Twin Creeks property (MAA Project #23); • Protection of farm and ranch land and riparian habitats in the lower San Gregorio Creek watershed; and • Expanding opportunities for Coastal Access at Tunitas Creek Beach and Cowell- Purisima Trail.